EXHIBIT 1.1
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MKS INSTRUMENTS, INC.
(a Massachusetts corporation)
4,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: January 14, 2004
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MKS INSTRUMENTS, INC.
(a Massachusetts corporation)
4,000,000 Shares of Common Stock
(No Par Value Per Share)
PURCHASE AGREEMENT
January 14, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇▇▇▇ & Company, Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
MKS Instruments, Inc., a Massachusetts corporation (the "Company"), and
the persons listed in Schedule B hereto (the "Selling Shareholders"), confirm
their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇ ▇▇▇▇▇▇ Securities, Inc., ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇, Inc. and ▇▇▇▇▇▇▇ & Company, Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to (i) the sale by the Company
and the Selling Shareholders, acting severally and not jointly, and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of shares of Common Stock, no par value per share, of the Company ("Common
Stock") set forth in Schedules A and B hereto and (ii) the grant by the Company
and the Selling Shareholders to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 600,000 additional shares of Common Stock to cover overallotments, if
any. The aforesaid 4,000,000 shares of Common Stock (the "Initial Securities")
to be purchased by the Underwriters and all or any part of the 600,000 shares
of Common Stock subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities".
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") registration statements on Form S-3 (Nos. 333-34450 and
333-109753), including the related preliminary prospectus or prospectuses
covering the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"). Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus and a prospectus
supplement in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations. The information included in such prospectus and prospectus
supplement that was omitted from such registration statements at the time they
became effective but that is deemed to be part of such registration statements
at the time they became effective pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information." Each prospectus used before such
registration statements became effective, and any prospectus (including
prospectus supplements) that omitted the Rule 430A Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." The term "Registration
Statement" as used herein shall mean such registration statements, including the
respective exhibits and any schedules thereto, at the time they became
effective, and including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act and the Rule 430A
Information. Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus and the
final prospectus supplement in the forms first furnished to the Underwriters for
use in connection with the offering of the Securities, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act at the time of the execution of this Agreement, are collectively referred to
herein as the "Prospectus." For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
The Registration Statement and any post-effective amendment thereto has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the
2
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement and
any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement
of a material fact or omitted or will omit 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. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto complied when so filed in all material respects with
the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, when they became effective or at the time they were
or hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations").
(iii) Independent Accountants. The accountants who
certified the financial statements and the supporting schedules, if
any, included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement. The pro
forma financial information included in the Registration Statement and
the Prospectus present fairly in all material respects the information
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shown therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements and
have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. The Company has
previously delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇ the consolidated balance sheet of
the Company and its consolidated subsidiaries as of November 30, 2003
and the related statements of operations of the Company and the
consolidated subsidiaries for each of the one-month periods ended
October 31, 2003 and November 30, 2003, respectively (collectively, the
"Monthly Financial Statements"). The Monthly Financial Statements
represent fairly, in all material respects, as of their respective
dates, the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations of
the Company and its consolidated subsidiaries for the periods
specified. The Monthly Financial Statements have been prepared on a
basis consistent with past practice for comparable periods.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Massachusetts and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Applied Science and
Technology, Inc. and ENI Technology, Inc. (each a "Subsidiary" and,
collectively, the "Subsidiaries") are the only subsidiaries of the
Company, other than MKS Japan, Inc., whose individual revenues at
September 30, 2003 exceeded 10% of the consolidated revenues of the
Company from sales to customers unaffiliated with the Company. Each of
the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive
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or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are the subsidiaries listed on Schedule D
hereto.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company as of September 30, 2003, was
as set forth in the Prospectus in the column entitled "Actual" under
the caption "Capitalization." There have been no issuances subsequent
to September 30, 2003 other than pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus. The shares of issued and
outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the Underwriters from the
Selling Shareholders, was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued, fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches, defaults or Repayment Events or
liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other
5
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, would result in a Material Adverse
Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
would result in a Material Adverse Effect, or which would materially
and adversely affect the properties or assets of the Company and its
subsidiaries considered as one enterprise or the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, would not result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Manipulation. Neither the Company nor, to
the knowledge of the Company, any affiliate of the Company has taken,
nor will the Company or any affiliate take, directly or indirectly, any
action which is designed to or which has constituted or which would be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation by the Company of
the transactions contemplated by this
6
Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations and state
securities or blue sky laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess such Government Licenses would not,
singly or in the aggregate, result in a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not, singly or in the aggregate,
result in a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries; and all of
the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease, which claim, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xx) Investment Company Act. The Company is not required,
and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products, asbestos-containing materials or mold
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B)
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the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries, and (D) there are
no events or circumstances that would reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxii) No Applicable Registration or Other Similar Rights.
There are no persons with registration rights or other similar rights
to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights relating to Securities to be sold
hereunder or such rights as have been duly waived.
(xxiii) Compliance with the Sarbanes Oxley Act. The Company
is in compliance in all material respects with all presently applicable
provisions of the Sarbanes Oxley Act of 2002.
(b) Representations and Warranties by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each Underwriter
as of the date hereof, as of the Closing Time, and, if the Selling Shareholder
is selling Option Securities on a Date of Delivery, as of each such Date of
Delivery, and agrees with each Underwriter, as set forth below; provided that
(X) ▇▇▇▇▇▇▇ Electric Co. ("▇▇▇▇▇▇▇") makes no representations or warranties with
respect to the matters set forth in subsections (ii) and (vii) below; and (Y)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ make no representations or warranties
with respect to the matters set forth in subsections (iv) and (vi) below):
(i) Authorization of this Agreement. This Agreement has
been duly authorized, executed and delivered by or on behalf of such
Selling Shareholder.
(ii) Authorization of Power of Attorney and Custody
Agreement. Each of the Power of Attorney and the Custody Agreement, in
the form heretofore furnished to the Representatives (together, the
"Power of Attorney and Custody Agreement"), has been duly authorized,
executed and delivered by such Selling Shareholder and, assuming the
due authorization, execution and delivery by the other parties thereto,
is the valid and binding agreement of such Selling Shareholder.
(iii) Noncontravention. The execution and delivery of this
Agreement and the Power of Attorney and Custody Agreement and the sale
and delivery of the Securities to be sold by such Selling Shareholder
and the consummation of the transactions contemplated herein and
compliance by such Selling Shareholder with its obligations hereunder
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder
8
is subject (except for such conflicts, breaches or defaults that would
not adversely affect such Selling Shareholder's ability to fulfill his,
her or its obligations hereunder or, if applicable, under the Power of
Attorney and Custody Agreement), nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of such Selling Shareholder, if applicable,
or any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties (except for violations of any
treaty, law, statute, rule, regulation, judgment, order, writ or decree
that would not adversely affect such Selling Shareholder's ability to
fulfill his, her or its obligations hereunder or, if applicable, under
the Power of Attorney and Custody Agreement).
(iv) Certificates Suitable for Transfer. The Securities to
be sold by such Selling Shareholder pursuant to this Agreement are
certificated securities in registered form and are not held in any
securities account or by or through any securities intermediary within
the meaning of the Uniform Commercial Code as in effect in the State of
New York (the "UCC"). Certificates for all of the Securities to be sold
by such Selling Shareholder pursuant to this Agreement, in suitable
form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank with signatures
guaranteed, will have been provided to the Company's transfer agent
promptly after the date hereof, with instructions to deliver such
Securities to the Underwriters at Closing Time.
(v) Valid Title. Such Selling Shareholder has, and at the
Closing Time (and, if any Option Securities are sold, at the Date of
Delivery) will have, valid title to the Securities to be sold by such
Selling Shareholder free and clear of all security interests, claims,
liens, equities or other encumbrances and the legal right and power,
and all authorization and approval required by law, to enter into this
Agreement and, if applicable, the Power of Attorney and Custody
Agreement and to sell, transfer and deliver the Securities to be sold
by such Selling Shareholder or, if such Securities are not
certificated, a valid security entitlement in respect of such
Securities.
(vi) Delivery of Certificated Securities. Upon the
Underwriters' acquiring possession of the Securities to be sold by such
Selling Shareholder and paying the purchase price therefor pursuant to
this Agreement, the Underwriters (assuming that no such Underwriter has
notice of any "adverse claim", within the meaning of Section 8-105 of
the New York Uniform Commercial Code, to such Securities) will acquire
their respective interests in such Securities (including, without
limitation, all rights that such Selling Shareholder had or has the
power to transfer in such Securities) free and clear of any adverse
claim within the meaning of Section 8-102 of the New York Uniform
Commercial Code.
(vii) Delivery of Uncertificated Securities. Upon payment
of the purchase price for the Securities to be sold by such Selling
Shareholder pursuant to this Agreement, delivery of such Securities, as
directed by the Underwriters, to Cede & Co. ("Cede") or such other
nominee as may be designated by The Depository Trust Company ("DTC")
(unless delivery of such Securities is unnecessary because such
Securities are already in possession of Cede or such nominee),
registration of such Securities in the name of Cede or such other
nominee (unless registration of such Securities is unnecessary because
such Securities are already registered in the name of Cede or such
nominee), and the crediting of such Securities on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any "adverse claim", within the
meaning of Section 8-105 of the New York Uniform Commercial Code (the
"UCC"), to such Securities), (A) DTC shall be a "protected purchaser",
within the meaning of Section 8-303 of the UCC, of such Securities and
will acquire its interest in the Securities (including, without
limitation, all rights that such Selling Shareholder had or has
9
the power to transfer in such Securities) free and clear of any adverse
claim within the meaning of Section 8-102 of the UCC, (B) under Section
8-501 of the UCC, the Underwriters will acquire a valid security
entitlement in respect of such Securities, and (C) no action (whether
framed in conversion, replevin, constructive trust, equitable lien, or
other theory) based on any "adverse claim", within the meaning of
Section 8-102 of the UCC, to such Securities may be asserted against
the Underwriters with respect to such security entitlement; for
purposes of this representation, such Selling Shareholder may assume
that when such payment, delivery (if necessary) and crediting occur,
(x) such Securities will have been registered in the name of Cede or
another nominee designated by DTC, in each case on the Company's share
registry in accordance with its certificate of incorporation, bylaws
and applicable law, (y) DTC will be registered as a "clearing
corporation", within the meaning of Section 8-102 of the UCC, and (z)
appropriate entries to the accounts of the several Underwriters on the
records of DTC will have been made pursuant to the UCC.
(viii) Absence of Manipulation. Such Selling Shareholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or which would be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(ix) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations hereunder or, if applicable, under the
Power of Attorney and Custody Agreement, or in connection with the sale
and delivery of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as may have
previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(x) Restriction on Sale of Securities. Such Selling
Shareholder will comply with the terms of the lock-up agreement
executed by such Selling Shareholder in connection with the offering
contemplated by this Agreement.
(xi) No Association with NASD. Neither such Selling
Shareholder nor any of such Selling Shareholder's affiliates directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, or is a person
associated with (within the meaning of Article I (dd) of the By-laws of
the National Association of Securities Dealers, Inc. (the "NASD")), any
member firm of the NASD.
(xii) Waiver of Registration Rights. Such Selling
Shareholder hereby waives any rights such Selling Shareholder may have,
pursuant to any registration rights agreement or otherwise, to include
for resale in the offering contemplated by this Agreement any
securities of the Company held by such Selling Shareholder. The
foregoing sentence shall not apply to the Securities to be sold
hereunder.
(c) Representations and Warranties by the Management Selling
Shareholder. In addition to the representations and warranties set forth in
Section 1(b) hereof, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Management Selling Shareholder")
further represents and warrants to each Underwriter as of the date hereof, as of
the Closing Time, and, if such Management Selling Shareholder is selling Option
Securities on a Date of Delivery, as of each such Date of Delivery, and agrees
with each Underwriter as follows:
10
(i) Accurate Disclosure. To the knowledge of such Selling
Shareholder, the representations and warranties of the Company
contained in Section 1(a) hereof are true and correct; such Selling
Shareholder has reviewed and is familiar with the Registration
Statement and the Prospectus and, to the knowledge of such Selling
Shareholder, neither the Prospectus nor any amendments or supplements
thereto includes any untrue statement of a material fact 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.
(d) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of a Selling Shareholder as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company and
each Selling Shareholder, at the price per share set forth in Schedule C, that
proportion of the number of Initial Securities set forth in Schedule B opposite
the name of the Company or such Selling Shareholder, as the case may be, which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling Shareholders, acting
severally and not jointly, hereby grant an option to the Underwriters, severally
and not jointly, to purchase up to an additional 600,000 shares of Common Stock,
as set forth in Schedule B, at the price per share set forth in Schedule C, less
an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the
Company and the Selling Shareholders setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by
▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its
discretion shall make to eliminate any sales or purchases of fractional shares.
11
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇
and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as shall
be agreed upon by the Representatives and the Company and the Selling
Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company and the Selling Shareholders, on each Date of Delivery as
specified in the notice from the Representatives to the Company and the Selling
Shareholders.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to bank account(s) designated by
the Company, ▇▇▇▇▇▇▇ and American Stock Transfer & Trust Company pursuant to
applicable Selling Shareholders' Power of Attorney and Custody Agreements, as
the case may be, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased
by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or any document incorporated by reference therein or
for additional information, and (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the
12
filings necessary pursuant to Rule 424(b) and will take such steps as
it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Representatives with copies of
any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which the Representatives or counsel for the Underwriters
shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter during the
period when the Prospectus is required to be delivered under the 1933
Act such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The costs of
furnishing such copies of the Prospectus (and any amendments or
supplements thereto) shall be borne by the Company with respect to any
such documents furnished during the nine-month period following the
date of this Agreement and shall be borne by the Underwriters
thereafter. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus. If at any time when a prospectus
is required by the 1933 Act to be delivered in connection with sales of
the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of counsel
for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary,
in the reasonable opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or
13
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement; provided, however, that
the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to
effect and maintain the quotation of the Securities on the Nasdaq
National Market.
(j) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus, the Company will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus; (D) any shares of Common Stock of the
Company issued in order to acquire assets or equity of one or more
businesses, provided that such shares are subject in writing to the
restrictions on sale set forth herein; or (E) any shares of Common
Stock issued pursuant to collaborative, licensing or marketing
arrangements, provided that such shares are subject in writing to the
restrictions on sale set forth herein.
(k) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act, will file all documents required to be filed with the
14
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of their obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto; provided that such
fees and disbursements shall not exceed $2,000, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, (ix) the costs and expenses
of the Company relating to investor presentations on any "road show" undertaken
in connection with the marketing of the Securities, including without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and one-half of the cost of
aircraft and other transportation chartered in connection with the road show and
(x) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, and (xi) the fees and expenses incurred in
connection with the inclusion of the Securities in the Nasdaq National Market.
(b) Expenses of the Selling Shareholders. The Selling Shareholders
will pay all expenses incident to the performance of their respective
obligations under, and the consummation of the transactions contemplated by this
Agreement, including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement between such
Underwriters, and (ii) the fees and disbursements of their respective counsel
and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the Underwriters for
all of their reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall
not affect any agreement that the Company and the Selling Shareholders may make
for the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to
15
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for the Company and Certain of the Selling
Shareholders. At Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of ▇▇▇▇ and ▇▇▇▇ LLP, counsel for
the Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto.
(c) Opinion of Counsel for ▇▇▇▇▇▇▇. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ ▇▇▇▇▇, in-house counsel for ▇▇▇▇▇▇▇ and Astec, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel for
the Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters with respect to the matters set forth in clauses
(i), (ii), (v), (vi) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (viii) through
(x), inclusive, (xii), (xiv) (solely as to the information in the Prospectus
under "Description of Capital Stock") and the penultimate paragraph of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the Company signed by the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to their
knowledge, contemplated by the Commission.
16
(f) Certificates of Selling Shareholders. At Closing Time, the
Representatives shall have received certificates of each of ▇▇▇▇▇▇▇ and an
Attorney-in-Fact on behalf of the other Selling Shareholders, dated as of
Closing Time, to the effect that (i) the representations and warranties of such
Selling Shareholder contained in Section 1(b) and, with respect to the
Management Selling Shareholder, Section 1(c) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as of
Closing Time and (ii) such Selling Shareholder has complied in all material
respects with all agreements and all conditions on its part to be performed
under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced copies
of such letter for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP a letter,
dated as of Closing Time, to the effect that it reaffirms the statements made in
the letter furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall
have been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(j) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule E hereto; it being
understood that the Management Selling Shareholder and ▇▇▇▇▇▇▇ shall have signed
lock-up agreements in the forms previously provided to counsel for the
Underwriters.
(l) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company and the Selling Shareholders contained herein and the
statements in any certificates furnished by the Company, any subsidiary of the
Company and the Selling Shareholders hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the Company signed by the President or a Vice President
of the Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(e) hereof remains true and correct as of
such Date of Delivery.
(ii) Certificates of Selling Shareholders. Certificates,
each dated such Date of Delivery, of ▇▇▇▇▇▇▇ and an Attorney-in-Fact on
behalf of the other Selling Shareholders confirming that the applicable
certificates delivered at Closing Time pursuant to Section 5(f) remain
true and correct as of such Date of Delivery.
17
(iii) Opinion of Counsel for the Company and Certain of the
Selling Shareholders. The favorable opinion of ▇▇▇▇ and ▇▇▇▇ LLP,
counsel for the Company and certain of the Selling Shareholders, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for ▇▇▇▇▇▇▇. The favorable opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇, in-house counsel for ▇▇▇▇▇▇▇ and Astec, in form and
substance satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation,
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(d)
hereof.
(vi) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(g) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Representatives and counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company and the Selling
Shareholders at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1,
6, 7 and 8 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and the Management Selling Shareholder. The Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and the Management Selling Shareholder, jointly and severally, agree to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
18
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Company and such Selling Shareholders;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto); (B) the aggregate liability of the Management Selling
Shareholder under the indemnity and contribution agreements contained in the
provisions of this Section 6 and Section 7 hereof and for any breach of the
representations and warranties of such Management Selling Shareholder set forth
in Sections 1(b) and 1(c) hereof shall be limited to an amount equal to the net
proceeds received by such Management Selling Shareholder from the offering of
the Securities pursuant to this Agreement (before deducting expenses) and
notwithstanding any other provision of this Section 6(a), any payment obligation
of the Management Selling Shareholder under this Section 6(a) shall be limited
to the amount of losses, claims, damages and liabilities (including interim
reimbursement payments with respect thereto) that are not paid by the Company
pursuant to this Section 6(a), and such payment shall not be required from the
Management Selling Shareholder until after demand for payment has been made by
the Underwriters first upon the Company and such payment is not made by the
Company within thirty days after such demand; and (C) the aggregate liability of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ under the indemnity and contribution agreements contained in
the provisions of this Section 6 and Section 7 hereof and for any breach of the
representations and warranties of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ set forth in Section 1(b)
hereof shall be limited to an amount equal to the net proceeds received by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ from the offering of the Securities pursuant to this
Agreement (before deducting expenses) and notwithstanding any other provision of
this Section 6(a), any payment obligation of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ under this
Section 6(a) shall be limited to the amount of losses, claims, damages and
liabilities (including interim reimbursement payments with respect thereto) that
are not paid by the Company or the Management Selling Shareholder pursuant to
this Section 6(a), and such payment shall not be required from ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ until after demand for payment has been made by the Underwriters first
upon the Company and such payment is not made within thirty days after such
demand, and then upon the
19
Management Selling Shareholder pursuant to (B) above and such payment is not
made within thirty days after the demand to the Management Shareholder;
provided, further, however, that the foregoing indemnification agreement with
respect to the Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased Securities, or any officers, employees, representatives,
agents or controlling persons of such Underwriter, if (i) a copy of the
Prospectus (as then amended or supplemented) was required by law to be delivered
to such person at or prior to the written confirmation of the sale of Securities
to such person, (ii) a copy of the Prospectus (as then amended or supplemented)
excluding documents incorporated by reference therein was not sent or given to
such person by or on behalf of such Underwriter and such failure was not due to
non-compliance by the Company with Section 3(d) hereof, and (iii) the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
(b) Indemnification of Underwriters by ▇▇▇▇▇▇▇ Electric Co.
▇▇▇▇▇▇▇, severally and not jointly, agrees to indemnify and hold harmless each
Underwriter, its Affiliates and selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(a)(i), (ii) and (iii) above; provided, however, that this provision shall apply
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company or the Underwriters
by ▇▇▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, further, that the aggregate liability of ▇▇▇▇▇▇▇
under the indemnity and contribution agreements contained in the provisions of
this Section 6 and Section 7 hereof and for any breach of the representations
and warranties of ▇▇▇▇▇▇▇ set forth in Section 1(b) hereof shall be limited to
an amount equal to the net proceeds received by ▇▇▇▇▇▇▇ from the offering of the
Securities pursuant to this Agreement (before deducting expenses).
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. The indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnified party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, an
20
indemnified party shall have the right to retain its own counsel at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnified party shall not (except with the consent of the indemnifying
party) also be counsel to the indemnifying party. In no event shall the
indemnifying party be liable for fees and expenses of more than one separate
counsel (in addition to any local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
In the case of parties indemnified pursuant to Section 6(a) and Section 6(b)
above, such counsel shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of
parties indemnified pursuant to Section 6(c) above, such counsel shall be
selected by the Company. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(e) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among the Company and
the Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders, severally, on the one hand and the Underwriters on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) 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 and the Selling Shareholders on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus bear to the aggregate initial public offering price
of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
21
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of any Underwriter or its Affiliates or selling agents, any person controlling
any Underwriter, its officers or directors or any person controlling the Company
or any person controlling any Selling Shareholder and (ii) delivery of and
payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective
22
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the reasonable
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq National Market, or if trading generally
on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company and any
Selling Shareholder shall have the right to postpone Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the
Company.
23
(a) If a Selling Shareholder shall fail at Closing Time or at a
Date of Delivery to sell and deliver the number of Securities which such Selling
Shareholder is obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule B hereto,
then the Underwriters may, at the option of the Representatives, by notice from
the Representatives to the Company and the non-defaulting Selling Shareholders,
either (i) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (ii) elect to purchase the Securities
which the non-defaulting Selling Shareholders and the Company have agreed to
sell hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any nondefaulting party; provided, however, that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Company from liability, if any, in respect of
such default.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 13. Notices. 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
Underwriters shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ Bozog; notices to the Company shall be
directed to MKS Instruments, Inc., ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention
of President; notices to Emerson shall be directed to ▇▇▇▇▇▇▇ Electric Co., ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇
▇▇▇▇▇; and notices to the other Selling Shareholders shall be directed to ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, c/o the Company at the Company's address set
forth above.
SECTION 14. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No
24
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 16. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 17. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 18. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, Emerson and the
Attorney-in-Fact for the other Selling Shareholders a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Company and the Selling Shareholders in
accordance with its terms.
Very truly yours,
MKS INSTRUMENTS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman, CEO & President
▇▇▇▇▇▇▇ ELECTRIC CO.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
As Attorney-in-Fact acting on behalf of ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇▇▇▇▇▇▇ & COMPANY, INC.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
By /s/ ▇▇▇▇ BOZOG
----------------------------------
Authorized Signatory
Name: ▇▇▇▇ Bozog
Title: Managing Director
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated..................................... 2,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ................................. 1,200,000
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. ................................ 400,000
▇▇▇▇▇▇▇ & Company, Inc. ..................................... 400,000
---------
Total 4,000,000
=========
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- -------------------------
MKS INSTRUMENTS, INC. 1,142,857 171,429
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 571,428 85,714
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 571,429 85,714
▇▇▇▇▇▇▇ Electric Co. 1,714,286 257,143
--------------------- -------------------------
Total................ 4,000,000 600,000
Sch B-1
SCHEDULE C
MKS INSTRUMENTS, INC.
4,000,000 Shares of Common Stock
(No Par Value Per Share)
1. The public offering price per share for the Securities,
determined as provided in said Section 2, shall be $26.25.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $25.0687, being an amount equal to the public
offering price set forth above less $1.1813 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch C-1
SCHEDULE D
List of subsidiaries
List of subsidiaries as of October 27, 2003
MKS International, Inc.
MKS Instruments France S.A.
MKS Instruments Canada Ltd.
MKS Instruments, U.K. Limited
MKS East, Inc.
MKS Japan, Inc.
MKS Korea Co., Ltd.
MKS FSC, Inc.
Telvac Engineering Limited
Spectra Sensortech, Ltd.
Applied Science and Technology, Inc.
MKS MSC, Inc.
ASTeX Realty Corporation
MKS (Bermuda) Ltd.
MKS Luxembourg S.A.R.L.
MKS Germany Holding GmbH
MKS Instruments Deutschland GmbH
ASTeX GmbH
ENI Technology, Inc.
MKS (Asia) Ltd.
MKS Hong Kong
MKS China
MKS Taiwan Ltd.
M.K.S. Tenta Products Ltd.
Tega Systems Ltd.
IPC Products GmbH
▇▇▇▇▇▇ Instruments APS
ETO Export Corporation FSC
MKS Shanghai Ltd.
ASTeX Sorbios GmbH
Sch D-1
SCHEDULE E
List of persons and entities
subject to lock-up
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Electric Co.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Sch E-1