EXHIBIT 10-35
[CONFORMED COPY]
$100,000,000
Safeguard Scientifics, Inc.
6% Convertible Subordinated Notes Due 2006
Placement Agreement
January 31, 1996
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Safeguard Scientifics, Inc., a corporation organized under the laws of
the Commonwealth of Pennsylvania (the "Company"), proposes to issue and sell to
J.P. Morgan Securities Inc. (the "Initial Purchaser") $100,000,000 principal
amount of its 6% Convertible Subordinated Notes Due 2006 (the "Purchased
Notes"), and up to an additional $15,000,000 principal amount of its 6%
Convertible Subordinated Notes Due 2006 (the "Option Notes"), if and to the
extent that the Initial Purchaser shall have determined to exercise the right to
purchase such Option Notes granted to the Initial Purchaser in Section 1 hereof.
The Purchased Notes and the Option Notes are herein referred to as the
"Securities".
The Securities will be issued pursuant to the provisions of an indenture to
be dated as of February 1, 1996 (the "Indenture") between the Company and First
Trust of New York, National Association, as trustee (the "Trustee"). The
Securities are convertible into shares of the Company's common stock, $.10 par
value per share (the "Common Stock").
The sale of the Securities to the Initial Purchaser will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the
"Securities Act"), in reliance upon the exemptions therefrom. In connection
with the sale of the Securities, the Company has prepared a Preliminary Offering
Memorandum, dated January 17, 1996 (including any documents incorporated by
reference therein and any exhibits thereto, the "Preliminary Offering
Memorandum") and an Offering Memorandum, dated January 31, 1996 (including any
documents incorporated by reference therein and any exhibits thereto and as
amended from time to time in accordance with the terms hereof, the "Offering
Memorandum"), for the information of the Initial Purchaser and for delivery to
prospective purchasers of the Securities.
As used herein "Principal Partnership Companies" means Coherent
Communications Systems Corporation, Cambridge Technology Partners
(Massachusetts) Inc. ("CTP") and USDATA Corporation.
The Company hereby agrees with the Initial Purchaser as follows:
1. The Company agrees to issue and sell the Purchased Notes to the
Initial Purchaser as hereinafter provided, and the Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Company the Purchased
Notes at a purchase price (the "Purchase Price") equal to 97.75% of their
principal amount.
In addition, the Company agrees to issue and sell the Option Notes to
the Initial Purchaser as hereinafter provided, and the Initial Purchaser, on the
basis of the representations and warranties herein contained, but subject to the
conditions hereafter stated, shall have the option to purchase from the Company
up to $15,000,000 aggregate principal amount of the Option Notes at the Purchase
Price for the sole purpose of covering over-allotments (if any) in the sale of
Purchased Notes by the Initial Purchaser plus accrued interest, if any, from the
Closing Date to the date of payment and delivery.
The Initial Purchaser may exercise the option to purchase the Option
Notes at any time (but not more than once) on or before the thirtieth day
following the date of this Agreement, by written notice from the Initial
Purchaser to the Company. Such notice shall set forth the aggregate principal
amount of Option Notes as to which the option is being exercised and the date
and time when the Option Notes are to be delivered and paid for, which may be
the same date and time as the Closing Date (as hereinafter defined) but shall
not be earlier than the Closing Date nor later than the tenth full Business Day
(as hereinafter defined) after the date of such notice. Any such notice shall
be given at least two Business Days prior to the date and time of delivery
specified therein.
2. The Company understands that the Initial Purchaser intends (i) to
offer privately the Securities as soon after this Agreement has become effective
as in the
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judgment of the Initial Purchaser is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Preliminary Offering Memorandum and
the Offering Memorandum.
The Company confirms that it has authorized the Initial Purchaser,
subject to the restrictions set forth below, to distribute copies of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering of the Securities. The Initial Purchaser hereby makes to the
Company the following representations and agreements:
(i) it is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act;
(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (B) it will solicit offers for the Securities only from, and will offer
the Securities only to persons whom it reasonably believes to be (1) in the case
of offers inside the United States, (x) "qualified institutional buyers" within
the meaning of Rule 144A under the Securities Act or (y) institutional
"accredited investors" as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act, who, in the case of purchasers described
in this clause (B)(1)(y), provide to it a letter in the form of Annex A to the
Preliminary Offering Memorandum and the Offering Memorandum, and purchase not
less than $100,000 principal amount of Securities for each of their own account
and any discretionary account for whom they are purchasing securities and (2) in
the case of offers outside the United States, to persons other than U.S. persons
("foreign purchasers", which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)) that, in each case, in
purchasing the Securities are deemed to have represented and agreed as provided
in the Preliminary Offering Memorandum and the Offering Memorandum;
(iii) except for sales described in (ii)(B)(1) above, it will not
offer, sell or deliver the Securities to, or for the account or benefit of, U.S.
persons (as defined in Regulation S under the Securities Act) (i) as part of its
distribution at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, and it will send to each
dealer to whom it sells such Securities during such period a confirmation or
other notice setting forth the restrictions on offers and sales of the
Securities within the United States or to, or for the account or benefit of,
U.S. persons; and
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(iv) (a) it has not offered or sold and will not offer or sell any
Securities in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (a
principal or agent) for the purpose of their business or otherwise in
circumstances which have not required and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulation 1995 ("Regulations"); (b) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 and the
Regulations with respect to anything done by it in relation to the Securities
offered hereby in, from or otherwise involving the United Kingdom, and (c) it
has only issued or passed on, and will only issue or pass on, to any person in
the United Kingdom any document received by it in connection with the issue of
the Securities if that person is of a kind described in Article 11(d) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom such document may otherwise lawfully be issued or passed
on.
3. Payment for the Securities shall be made to the Company or to its
order in same day funds by wire transfer to Midlantic Bank, Philadelphia, PA,
ABA #021-200-012, for the account of Safeguard Scientifics, Inc. A/C #46-
1-344-4, Attention: Joseph G. Meterchick (215) 564-7479 at 10:00 A.M., New York
City time, in the case of the Purchased Notes, on February 6, 1996, or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Initial Purchaser and the Company may agree upon in writing
or, in the case of the Option Notes on the date and time specified by the
Initial Purchaser in the written notice of the election to purchase such Option
Notes. The time and date of such payment for the Purchased Notes are referred
to herein as the "Closing Date" and the time and date for such payment for the
Option Notes, if other than the Closing Date, are herein referred to as the
"Additional Closing Date". As used herein, the term "Business Day" means any
day other than a day on which banks are permitted or required to be closed in
New York City.
Payment for the Securities to be purchased on the Closing Date or
Additional Closing Date, as the case may be, shall be made against delivery to
the Initial Purchaser of the Securities to be purchased on such date registered
in such names and in such denominations as the Initial Purchaser shall request
in writing not later than two full Business Days prior to the Closing Date or
the Additional Closing Date, as the case may be, with any transfer taxes payable
in connection with the transfer to the Initial Purchaser of the Securities duly
paid by the Company. The certificates for the Securities will be made available
for inspection and packaging by the Initial Purchaser at the office of J.P.
Morgan Securities Inc., 60 Wall Street, New York, New York 10260, not later than
10:00 A.M., New York City time, on the Business Day prior to the Closing Date or
Additional Closing Date, as the case may be.
4. The Company represents and warrants to the Initial Purchaser
that:
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(a) (i) the Offering Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was, on
the date of its issuance, and is, at the date hereof, accurate in all
material respects and did not and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances existing at
such dates, not misleading, and the Offering Memorandum (as amended or
supplemented as necessary) will be, as of the Closing Date, accurate in all
material respects and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the
Closing Date, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by such Initial Purchaser
expressly for use therein;
(ii) the Preliminary Offering Memorandum was, on the date of its
issuance, accurate in all material respects and did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at such date, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information relating to the Initial Purchaser furnished to the Company
in writing by such Initial Purchaser expressly for use therein;
(b) the financial statements and the related notes thereto
included in the Preliminary Offering Memorandum and the Offering
Memorandum present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; and said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis except to the
extent otherwise disclosed in the Preliminary Offering Memorandum and
the Offering Memorandum;
(c) since the date as of which information is given in the
Offering Memorandum, there has not been any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, business, prospects, management,
financial position, shareholders' equity or results of operations of
(i) the Company and its subsidiaries, taken as a whole, or (ii) to the
Company's knowledge,
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any Principal Partnership Company and its consolidated subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the Offering
Memorandum; and since the respective dates as of which information is given
in the Preliminary Offering Memorandum and the Offering Memorandum, except
as set forth or contemplated therein, neither the Company nor any of its
subsidiaries, nor to the best of the Company's knowledge, any Principal
Partnership Company, has entered into any transaction or agreement (whether
or not in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(d) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Pennsylvania, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Offering
Memorandum, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
in jurisdictions in which the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(e) to the Company's knowledge, each Principal Partnership Company
and each subsidiary of the Company or a Principal Partnership Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is incorporated,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Memorandum; and all of
the shares of capital stock of the Principal Partnership Companies which
are owned by the Company or any of its subsidiaries, and all of the shares
of capital stock of the subsidiaries of the Company which are owned by the
Company or any of its subsidiaries have been duly authorized and validly
issued, are fully-paid and non-assessable, and are owned by the Company,
directly or indirectly, free and clear of all liens, encumbrances, security
interests and claims except to the extent that they are pledged pursuant to
the Second Amended and Restated Credit Agreement dated as of February 1,
1995 by and among Midlantic Bank, N.A., the Company and Safeguard
Scientifics (Delaware), Inc., as amended;
(f) this Agreement has been duly authorized, executed and delivered
by the Company;
(g) the Securities have been duly authorized, and when executed,
delivered and authenticated in accordance with the Indenture against
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payment therefor as provided in this Agreement, will have been duly
executed, issued and delivered and will constitute valid and binding
obligations of the Company entitled to the benefits provided by the
Indenture and enforceable in accordance with their terms, subject to the
effect of applicable bankruptcy, insolvency or similar laws affecting
creditors rights generally and equitable principles of general
applicability; the Indenture has been duly authorized and, when executed
and delivered by the Company and the Trustee, the Indenture will constitute
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors rights generally
and equitable principles of general applicability; and the Securities and
the Indenture conform in all material respects to the descriptions thereof
in the Offering Memorandum;
(h) the authorized capital stock of the Company conforms to the
description thereof set forth in the Offering Memorandum, and all of the
outstanding shares of Common Stock of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable; and, except as
described in or expressly contemplated by the Offering Memorandum, there
are no (i) outstanding rights (including any preemptive or similar rights
to subscribe for shares of capital stock), warrants or options to acquire,
or instruments convertible into or exchangeable for, any shares of capital
stock of, or other equity interest in, the Company or any of its
subsidiaries or, to the Company's knowledge, Principal Partnership
Companies, and (ii) contracts, commitments, understandings or arrangements
relating to the issuance of any capital stock of the Company or any
subsidiary or, to the Company's knowledge, any Principal Partnership
Company, or to any of the convertible or exchangeable securities or rights,
warrants or options described in (i) above;
(i) the shares of Common Stock issuable on conversion of the
Securities have been duly authorized and reserved for issuance upon
conversion of the Securities and, when issued upon such conversion in
accordance with the terms of the Indenture, will have been validly issued
and will be fully paid and non-assessable, and the issuance of such shares
of Common Stock is not subject to any preemptive or similar rights;
(j) any rights to purchase capital stock of the Company
("Rights") to be attached to the shares of Common Stock issuable on
conversion of the Securities have been duly authorized and, when the shares
of Common Stock issuable on conversion of the Securities have been issued
in accordance with the
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terms of the Securities and the Indenture, the Rights will have been duly
and validly issued;
(k) neither the Company nor any of its subsidiaries nor, to the best
of the Company's knowledge, any Principal Partnership Company or any
subsidiary of a Principal Partnership Company is, or with the giving of
notice or lapse of time or both would be, in violation of or in default
under, its Articles or Certificate of Incorporation, as the case may be, or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company, any of its subsidiaries or,
to the best of the Company's knowledge, any Principal Partnership Company
or any subsidiary of a Principal Partnership Company is a party or by which
it or any of them or any of their respective properties is bound, except
for violations and defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole or to the
ability of the Company to perform its obligations under the Securities; the
issue and sale of the Securities and the performance by the Company of all
of its obligations under the Securities, the Indenture and this Agreement
and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which
the Company or any of its subsidiaries or, to the best of its knowledge,
any Principal Partnership Company or any subsidiary of a Principal
Partnership Company is a party or by which the Company or any of its
subsidiaries or, to the best of its knowledge, any Principal Partnership
Company or any subsidiary of a Principal Partnership Company is bound or to
which any of the property or assets of the Company or any of its
subsidiaries or, to the best of the Company's knowledge, any Principal
Partnership Company or any subsidiary of a Principal Partnership Company is
subject, except such conflicts, breaches or defaults as may have been
waived, nor will any such action result in any violation of the provisions
of the Articles or Certificate of Incorporation, as the case may be, or the
By-Laws of the Company or, to the best of the Company's knowledge, any
Principal Partnership Company or any applicable law or statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, its subsidiaries or, to the best of
the Company's knowledge, any Principal Partnership Company or any
subsidiary of any Principal Partnership Company or any of their respective
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except such consents, approvals, authorizations, registrations
or qualifications as
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may be required under state securities or Blue Sky laws in connection with
the purchase and sale of the Securities by the Initial Purchaser;
(l) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
subsidiaries or, to the best of the Company's knowledge, any Principal
Partnership Company or any subsidiary of a Principal Partnership Company is
or may be a party or to which any property of the Company or any of its
subsidiaries or, to the best of the Company's knowledge, any Principal
Partnership Company or any subsidiary of a Principal Partnership Company is
or may be the subject which, if determined adversely to the Company or a
Principal Partnership Company, as the case may be, could individually or in
the aggregate reasonably be expected to have a material adverse effect on
the general affairs, business, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(m) none of the Company, its affiliates (as defined in Rule 144(a)(1)
under the Securities Act) or any person acting on behalf of any of them
(except that no representation is made as to the actions of the Initial
Purchaser) has engaged or will engage in any directed selling efforts (as
such term is defined in Regulation S under the Securities Act) with respect
to the Securities; and the Company, its Affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on its or their
behalf (except as aforesaid) have complied with the offering restrictions
requirements of Regulation S;
(n) none of the Company, its affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act) or any person acting on behalf of
any of them (except that no representative is made as to the actions of the
Initial Purchaser) has (i) sold, solicited any offers to buy or offered to
sell or otherwise negotiated in respect of any security (as defined in the
Securities Act) which is or will be integrated with the sale of the
Securities in a manner that would require the registration under the
Securities Act of the Securities, or (ii) engaged in any form of general
solicitation or advertising in connection with any offering or sale of the
Securities;
(o) assuming the accuracy of the representations of the Initial
Purchaser contained in Section 2 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities in the
manner contemplated by this Agreement to register the Securities under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended;
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(p) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(q) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
issuance and sale of the Securities or the conversion of the Securities in
the manner contemplated in the Indenture or the consummation of the
transactions contemplated herein;
(r) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Offering Memorandum, will not be an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended;
(s) to the best of the Company's knowledge, the Company and its
subsidiaries and the Principal Partnership Companies and their subsidiaries
(i) are in compliance with any and all applicable laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or other approval, except where such
noncompliance with Environmental Laws as defined in clause (i) above,
failure to receive required permits, licenses or other approvals as
referred to in clause (ii) above or failure to comply with the terms and
conditions of such permits, licenses or other approvals as referred to in
clause (iii) above would not, individually or in the aggregate, have a
material adverse effect on the general affairs, business, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(t) the Company does not know of any costs and liabilities associated
with environmental matters, (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, individually or in the aggregate, have a
material adverse effect on the general affairs, business, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and
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(u) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
5. The Company covenants and agrees with the Initial Purchaser as
follows:
(a) to deliver to the Initial Purchaser as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (including all
amendments and supplements thereto) as the Initial Purchaser may reasonably
request;
(b) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchaser a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchaser reasonably objects;
(c) if, at any time prior to the earlier of 120 days from the date
hereof and the receipt by the Company of written notice from the Initial
Purchaser of the completion of the initial placement of the Securities
pursuant to this Agreement, any event shall occur as a result of which it
is necessary to amend or supplement the Offering Memorandum in order to
make the statements therein, in the light of the circumstances when the
Offering Memorandum is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Offering Memorandum to comply with
law, forthwith to prepare and furnish, at the expense of the Company, to
the Initial Purchaser such amendments or supplements to the Offering
Memorandum as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented will not, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser, be
misleading or so that the Offering Memorandum, as so amended or
supplemented, will comply with law;
(d) none of the Company, any of its affiliates (as defined in Rule
501(b) under the Securities Act) or any person acting on behalf of the
Company or such affiliate will solicit any offer to buy or offer or sell
the Securities by means of any form of general solicitation or general
advertising, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising;
(e) none of the Company, any of its affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on behalf of
any of the
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foregoing will engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S under the Securities Act;
(f) none of the Company, any of its affiliates (as defined in
Regulation 501(b) of Regulation D under the Securities Act) or any person
acting on behalf of the Company or such affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which will be integrated with the sale
of the Securities in a manner which would require the registration under
the Securities Act of the Securities and the Company will take all action
that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act with
the offerings contemplated hereby;
(g) during the period beginning on the date hereof and continuing to
and including the day which is 90 days after the Closing Date, the Company
will not, and will cause its subsidiaries not, to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for shares of Common Stock
other than (i) the Securities, (ii) the Common Stock issuable on conversion
of the Securities in the manner contemplated by the Indenture, (iii) shares
of Common Stock issued upon the exercise of options granted under existing
employee and non-employee director stock option plans, (iv) options for
shares of Common Stock issued under existing stock option plans and (v)
shares of Common Stock held pursuant to the Company's Stock Savings Plan
necessary to enable employee roll-overs or employee borrowing against the
plan, without the prior written consent of the Initial Purchaser;
(h) while the Securities remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
during any period in which it is not subject to Section 13 or 15(d) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") to
make available to the Initial Purchaser and any holder of Securities in
connection with any sale thereof and any prospective purchaser of
Securities, in each case upon request, the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Securities Act (or
any successor thereto);
(i) to endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser shall reasonably request and to continue such qualification in
effect so long as reasonably required for initial placement of the
Securities (but in no event more than 120 days) and to pay all reasonable
fees and expenses (including reasonable fees and disbursements of counsel
to the Initial Purchaser) reasonably incurred in
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connection with such qualification and in connection with the determination
of the eligibility of the Securities for investment under the laws of such
jurisdictions as the Initial Purchaser may designate; PROVIDED that the
Company shall not be required to file a general consent to service of
process in any jurisdiction, qualify to do business in any jurisdiction or
take any action which would subject the Company to service of process in
suits (other than those arising out of the offering or sale of the
Securities) in any jurisdiction where it is not now so subject;
(j) so long as the Securities are outstanding, to furnish to the
Initial Purchaser copies of all reports or other communications (financial
or other) furnished to holders of the Securities, and copies of any reports
and financial statements of the Company furnished to or filed with the
Securities and Exchange Commission (the "Commission") or any national
securities exchange;
(k) to pay all reasonable costs and expenses incident to the
performance of its obligations hereunder, including without limiting the
generality of the foregoing, all reasonable fees, costs and expenses (i)
incident to the preparation, issuance, execution, authentication and
delivery of the Securities, including any expenses of the Trustee, (ii)
incident to the preparation, printing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including in each case all
exhibits, amendments and supplements thereto and mailing and shipping
costs), (iii) incurred in connection with the registration or qualification
and determination of the eligibility for investment of the Securities under
the laws of such jurisdictions as the Initial Purchaser may designate
(including reasonable fees of counsel for the Initial Purchaser and their
disbursements), (iv) incurred in connection with the listing of the
Securities on any securities trading system (such as PORTAL), (v) incurred
in connection with the preparation (including reasonable word processing,
printing and duplicating costs) and delivery of this Agreement, the
Indenture, the Preliminary and Supplemental Blue Sky Memoranda and any
Legal Investment Survey and the furnishing to the Initial Purchaser of
copies thereof, (vi) payable to rating agencies in connection with the
rating of the Securities, (vii) incurred in connection with any "road show"
meetings, including travel expenses, and (viii) incurred by the Initial
Purchaser in connection with the transactions contemplated by this
Agreement to the extent that they constitute out-of-pocket expenses,
PROVIDED that such costs and expenses will not include the fees and
expenses of counsel for the Initial Purchaser other than as described in
(iii); and
(l) in the event that the Company or any of its affiliates (as
defined in Rule 144(a)(1) under the Securities Act) acquire any of the
Securities, the Company or such affiliate will not sell or otherwise
transfer such Securities or Common Stock other than to the Company or its
affiliates.
13
6. The obligation of the Initial Purchaser hereunder to purchase the
Securities is subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) the representations and warranties of the Company herein shall
be true and correct on and as of the Closing Date as if made on and as of
the Closing Date; the Company shall have complied with all agreements and
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any intended
or potential downgrading or (ii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(b) since the respective dates as of which information is given in
the Offering Memorandum there shall not have been any material adverse
change or any development involving a prospective material adverse change,
in or affecting the general affairs, business, management, financial
position, shareholders' equity or results of operations of (i) the Company
and its subsidiaries, taken as a whole, or (ii) to the Company's knowledge,
any Principal Partnership Company and its consolidated subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the Offering
Memorandum, the effect of which in the judgment of the Initial Purchaser
makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Offering Memorandum;
(c) the Initial Purchaser shall have received on and as of the
Closing Date a certificate of an executive officer of the Company
satisfactory to the Initial Purchaser to the effect set forth in paragraph
(a) of this Section and to whether there has occurred any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, business, prospects, management,
financial position, shareholders' equity or results of operations of (i)
the Company and its subsidiaries, taken as a whole, or (ii) to the
Company's knowledge, any Principal Partnership Company and its consolidated
subsidiaries, taken as a whole, from that set forth or contemplated in the
Offering Memorandum;
14
(d) Morgan, Lewis & Bockius LLP, Counsel for the Company, shall have
furnished to the Initial Purchaser their written opinion, dated the Closing
Date, in form and substance satisfactory to the Initial Purchaser, to the
effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with power and authority to own its
properties and conduct its business as described in the Preliminary
Offering Memorandum and the Offering Memorandum, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so as to
require such qualification, other than in jurisdictions in which the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole;
(ii) each Principal Partnership Company and each subsidiary of
the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in
which it is incorporated;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Securities have been duly authorized, and when
executed, delivered and authenticated in accordance with the Indenture
against payment therefor as provided in this Agreement, will have been
duly executed, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided
by the Indenture and enforceable in accordance with their terms,
subject to the effect of applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and equitable principles of
general applicability; the Indenture has been duly authorized and,
when executed and delivered by the Company and the Trustee, the
Indenture will constitute a valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and equitable principles of
general applicability;
(v) the authorized capital stock of the Company conforms to the
description thereof set forth in the Offering Memorandum, and all of
the outstanding shares of Common Stock of the Company have been duly
15
authorized and validly issued, are fully-paid and non-assessable and
are not subject to any preemptive or similar rights under applicable
law or the Company's Articles of Incorporation, and to the best of
such counsel's knowledge, any contract, commitment, understanding or
arrangement with respect thereto;
(vi) the shares of Common Stock issuable on conversion of the
Securities have been duly authorized and reserved for issuance upon
conversion of the Securities and, when issued upon such conversion in
accordance with the terms of the Securities and the Indenture, will
have been validly issued and will be fully paid and non-assessable,
and the issuance of such shares of Common Stock is not subject to any
preemptive or similar rights;
(vii) any Rights to be attached to the shares of Common Stock
issuable on conversion of the Securities have been duly authorized
and, when the shares of Common Stock issuable on conversion of the
Securities have been issued in accordance with the terms of the
Securities and the Indenture, the Rights will have been duly and
validly issued;
(viii) the issue and sale of the Securities and the performance
by the Company of its obligations under the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the Company,
any Principal Partnership Company (other than CTP) or any subsidiary
of the Company is a party or by which the Company, any Principal
Partnership Company (other than CTP) or any subsidiary of the Company
is bound or to which any of the property or assets of the Company, any
Principal Partnership Company (other than CTP) or any subsidiary of
the Company is subject, except to the extent that such conflict,
breach or default has been waived, nor will any such action result in
any violation of the provisions of the Articles or Certificate of
Incorporation, as the case may be, or the By-Laws of the Company, any
Principal Partnership Company (other than CTP) or any subsidiary of
the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or, to the best of
such counsel's knowledge any Principal Partnership Company (other than
CTP) or any of their respective properties; and no consent, approval,
authorization, order, registration or qualification of or with any
court or
16
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase and sale of the Securities by the Initial Purchaser;
(ix) other than as set forth or contemplated in the Offering
Memorandum, such counsel does not know of any legal or governmental
proceedings, pending or threatened, to which the Company, any
subsidiary of the Company or any Principal Partnership Company (other
than CTP) is or may be a party or to which any property of the
Company, any subsidiary of the Company or any Principal Partnership
Company (other than CTP) is or may be the subject which, if determined
adversely to the Company could individually or in the aggregate
reasonably be expected to have a material adverse effect on the
general affairs, business, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(x) the statements in the Offering Memorandum under "Description
of the Notes", "Description of Capital Stock" and "Plan of
Distribution", insofar as such statements constitute a summary of the
legal matters or documents referred to therein, fairly summarize such
legal matters or documents;
(xi) assuming the accuracy of the representations of the Initial
Purchaser contained in Section 2 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities in the
manner contemplated by this Agreement to register the Securities under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended;
(xii) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(xiii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Memorandum, will not be
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended; and
17
(xiv) such counsel (A) is of the opinion that each document
filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in the Offering
Memorandum (except for the financial statements and other financial
information included therein, as to which such counsel need not
express any opinion) complied when so filed as to form in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder; and (B) has no reason to
believe that (except for the financial statements and other financial
information included or incorporated by reference therein as to which
such counsel need not express any belief) the Offering Memorandum, as
of its date of issuance, and, as amended or supplemented, if
applicable, as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may rely (A) as to matters involving
the application of laws other than the laws of the United States and the
Commonwealth of Pennsylvania and the State of Delaware, to the extent such
counsel deems proper and to the extent specified in such opinion, upon an
opinion or opinions (reasonably satisfactory to the Initial Purchaser) of other
counsel familiar with the applicable laws; and (B) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of the
Company.
(e) on the date of the issuance of the Offering Memorandum and also
on the Closing Date, KPMG Peat Marwick LLP, independent auditors, shall
have furnished to the Initial Purchaser letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type customarily
included in accountants "comfort letters" to underwriters with respect to
the financial statements and other financial information contained in the
Offering Memorandum;
(f) the Initial Purchaser shall have received on and as of the
Closing Date an opinion of Davis Polk & Wardwell, counsel to the Initial
Purchaser, with respect to the validity of the Indenture and the
Securities, and such other matters as the Initial Purchaser may reasonably
request, and such counsel shall have received such documents, certificates
and other information as they may reasonably request to enable them to pass
upon such matters;
18
(g) the Initial Purchaser shall have received on or before the
Closing Date a copy of a letter from each of Standard & Poor's Ratings
Group and Moody's Investors Services assigning to the Securities a rating
of B- and B3, respectively; each such rating shall have been confirmed on
the Closing Date by the applicable rating agency; and neither of such
rating agencies shall have announced that it has its rating of the
Securities under surveillance or review with possible negative
implications;
(h) the Securities shall be eligible for inclusion in the PORTAL
trading system; and
(i) on or prior to the Closing Date the Company shall have furnished
to the Initial Purchaser such further certificates and documents as the
Initial Purchaser shall reasonably request.
The obligation of the Initial Purchaser to purchase Option Notes
hereunder are subject to satisfaction of each of the conditions set forth above
on and as of the Additional Closing Date, except that the certificate called for
by paragraph (c) above, the opinions called for by paragraphs (d) and (f) above
and the second letter called for by paragraph (e) above shall be dated the
Additional Closing Date.
7. The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses reasonably
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any breach or alleged breach of any of the representations
and warranties contained in Section 4, caused by any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum (and any amendment or supplement thereto),
or caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to the Initial Purchaser furnished to the
Company in writing by the Initial Purchaser expressly for use therein, provided
that the foregoing indemnity with respect to the Preliminary Offering Memorandum
shall not inure to the benefit of the Initial Purchaser (or to the benefit of
any person controlling the Initial Purchaser) from whom the person asserting
such losses, claims, damages or liabilities purchased Securities if such untrue
statement or omission or alleged untrue statement or omission made in the
Preliminary Offering Memorandum is eliminated or remedied in the Offering
Memorandum and a
19
copy of the Offering Memorandum shall not have been furnished to such person at
or prior to the written confirmation of the sale of such Securities to such
person.
The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers and each person who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to the Initial Purchaser, but only with reference to information relating to the
Initial Purchaser furnished to the Company in writing by the Initial Purchaser
expressly for use in the Preliminary Offering Memorandum or in the Offering
Memorandum or any amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons. It is further understood that all such
fees and expenses shall be reimbursed as they are incurred. Any such separate
firm for the Initial Purchaser and such control persons of Initial Purchaser
shall be designated in writing by Initial Purchaser and any such separate firm
for the Company, its directors, its officers and such control persons of the
Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses of counsel as
20
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchaser on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Initial Purchaser on the other shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total discounts and commissions received by the Initial Purchaser bear
to the aggregate public offering price of the Securities. The relative fault of
the Company on the one hand and the Initial Purchaser on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Initial
Purchaser and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by PRO
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to
21
the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall the Initial Purchaser be required to contribute any
amount in excess of the amount by which the total price at which the Securities
purchased by it were offered exceeds the amount of any damages that the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7
are in addition to any liability which the Indemnifying Person may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchaser or any person controlling the Initial Purchaser or by
or on behalf of the Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the Initial Purchaser with respect to the Option Notes) may be
terminated in the absolute discretion of the Initial Purchaser, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Notes, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or in Pennsylvania shall have been declared by either Federal
or Pennsylvania State authorities or (iv) there shall have occurred any outbreak
or escalation of hostilities or any change in financial markets or any calamity
or crisis that, in the judgment of the Initial Purchaser, is material and
adverse and which, in the judgment of the Initial Purchaser, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.
22
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. If this Agreement shall be terminated by the Initial Purchaser
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Initial Purchaser's obligations cannot be
fulfilled, the Company agrees to reimburse the Initial Purchaser, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by the Initial Purchaser in connection with this Agreement
or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Initial Purchaser, any controlling persons referred to herein
and their respective successors and assigns. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. No purchaser of Securities
from the Initial Purchaser shall be deemed to be a successor by reason merely of
such purchase.
12. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchaser shall
be given to the Initial Purchaser at J.P. Morgan Securities Inc., 60 Wall
Street, New York, New York 10260 (facsimile: 212-648-5705); Attention: Syndicate
Department. Notices to the Company shall be given to it at Safeguard
Scientifics, Inc., 800 The Safeguard Building, 435 Devon Park Drive, Wayne,
Pennsylvania 19087; facsimile: (610) 293-0601; Attention: Senior Vice President
- - - Finance.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
23
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
Safeguard Scientifics, Inc.
By: /s/ Gerald M. Wilk
-------------------------------
Title: Senior Vice President -
Finance
Accepted: January 31, 1996
J.P. Morgan Securities Inc.
By: /s/ Oliver Abel IV
--------------------------
Title: Vice President