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EXHIBIT 1.1
DEALER MANAGER AGREEMENT
_____________, 1998
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
c/o NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. MEMC Electronic Materials, Inc., a Delaware corporation (the
"Company"), confirms its agreement with and appointment of NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC ("NMS") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. (together with
NMS, the "Dealer Managers") to act as dealer managers in connection with the
issuance by the Company to the holders of record other than VEBA Corporation, a
Delaware corporation ("VEBA"), of the common stock, $0.01 par value, of the
Company (the "Common Stock"), of transferable rights (each a "Right" and,
collectively, the "Rights") entitling the holders of such Rights (the "Holders")
to subscribe for shares of Common Stock (each a "Common Share" and,
collectively, the "Common Shares"; such issuance is herein referred to as the
"Rights Offering"). Pursuant to the terms of the Rights Offering, the Company is
issuing each Holder [ ] Rights for each share of Common Stock held by such
Holder on the record date (the "Record Date") set forth in the Prospectus (as
defined herein). Such Rights entitle Holders to acquire during the subscription
period set forth in the Prospectus (the "Subscription Period"), at the price set
forth in such Prospectus (the "Subscription Price"), one Common Share for each
Right exercised on the terms and conditions set forth in such Prospectus, plus
such additional Common Shares as permitted under the oversubscription privilege
as set forth in the Prospectus.
The Company entered into a Purchase Agreement, dated October 22, 1998 (the
"Purchase Agreement"), pursuant to which VEBA (or its permitted transferees) is
obligated to purchase from the Company in a private placement, subject to
certain conditions, a specified number of shares of Common Stock (the "Private
Placement Shares") at the Subscription Price. The Company has also entered into
a Standby Agreement, dated October 22, 1998 (the "Standby Agreement"), pursuant
to which VEBA (or its permitted transferees) is obligated, subject to certain
conditions, to purchase from the Company any of the Shares not purchased by
Holders of the Company in the Rights Offering (the "Standby Shares") at the
Subscription Price.
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The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-65973) which contains a form of prospectus to be used in connection with the
public offering and sale of the Common Shares. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, in
the form filed with the Commission under the Securities Act of 1933 and the
rules and regulations promulgated thereunder (collectively, the "Securities
Act"), including all documents incorporated or deemed to be incorporated by
reference therein and any information deemed to be a part thereof filed pursuant
to the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act") or included pursuant to Rule 430A
and Rule 424(b) under the Securities Act, is called the "Registration
Statement." The term "Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments thereto became or
becomes effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus included in the Registration
Statement prior to the Effective Date. "Prospectus" shall mean the prospectus
relating to the Common Shares and the Rights that is first filed pursuant to
Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the Shares and the
Rights included in the Registration Statement at the Effective Date. "Rule 424"
refers to such rule under the Securities Act. "Expiration Date" shall mean the
expiration date of the Rights Offering as set forth in the Prospectus. The
letters to beneficial owners of the Common Shares of the Company, forms used to
exercise Rights, any letters from the Company to securities dealers, commercial
banks and other nominees and any newspaper announcements, press releases and
other offering materials and information that the Company may use, approve,
prepare or authorize for use in connection with the Rights Offering, are
collectively referred to hereinafter as the "Supplemental Offering Materials."
The Supplemental Offering Materials have been, or will be, prepared by the
Company, and the preparation of them is the sole responsibility of the Company.
All references in this Agreement to the Registration Statement, a Preliminary
Prospectus, the Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof 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" (and all other
references of like import) in the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
The Company hereby confirms its agreements with the Dealer Managers as
follows:
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SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to the Dealer Managers as of the later
of the date hereof and the date of the commencement of the Rights Offering (such
later date being hereinafter referred to as the "Representation Date"), as
follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the Securities Act. The Company will use
its best efforts to cause the Registration Statement to be declared effective by
the Commission under the Securities Act. As filed, the Registration Statement
and Prospectus shall contain all required information, with respect to the
Common Shares, the Rights and the offering of the Common Shares and, except to
the extent the Dealer Managers shall agree to a modification, shall be in all
substantive respects in the form furnished to the Dealer Managers prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised the
Dealer Managers, prior to the Execution Time, will be included or made therein.
The Company has complied and will comply to the Commission's satisfaction with
all requests of the Commission for additional or supplemental information.
On the Effective Date, the Registration Statement will, and when the
Prospectus is first filed in accordance with Rule 424(b) (if required) and on
the Representation Date, the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the
Securities Act and the Exchange Act; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Effective Date,
the Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing pursuant to Rule 424(b) and on the Representation Date, the
Prospectus (together with any supplement thereto) will not, include any untrue
statement of a material fact or 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; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished to the Company by or
on behalf of any Dealer Manager specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto), as set forth in Section
8(b). There are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which have
not been or will not be described or filed as required. The information
contained in the Supplemental Offering Materials is materially accurate and
complete for its intended purposes.
(b) OFFERING MATERIALS FURNISHED TO DEALER MANAGERS. The Company has
delivered to each Dealer Manager, and will deliver to each Dealer Manager on the
Effective Date, one complete copy of the manually signed Registration Statement
and of each consent and certificate of experts filed as a part thereof, and
conformed copies of the Registration Statement
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(without exhibits) and Preliminary Prospectuses and the Prospectus, as amended
or supplemented, and copies of the Supplemental Offering Materials, in each case
in such quantities and at such places as the Dealer Managers have reasonably
requested.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company has not
distributed and will not distribute, prior to the later of the Expiration Date
and the completion of the distribution of the Common Shares, any offering
material in connection with the offering and sale of the Common Shares other
than a Preliminary Prospectus, the Prospectus, the Registration Statement and/or
the Supplemental Offering Materials.
(d) THE DEALER MANAGER AGREEMENT. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms (assuming the due execution and
delivery of this Agreement by the Dealer Managers), except as rights to
indemnification or contribution hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(e) AUTHORIZATION OF THE COMMON SHARES AND PRIVATE PLACEMENT SHARES. The
Common Shares to be purchased by the Holders from the Company have been duly
authorized for issuance and sale pursuant to the Prospectus and the Supplemental
Offering Materials and, when issued and delivered by the Company will be validly
issued, fully paid and nonassessable. The Private Placement Shares and Standby
Shares to be purchased by VEBA (or its permitted transferees) have been duly
authorized for issuance and sale pursuant to the Purchase Agreement and Standby
Agreement, respectively, and, when issued and delivered by the Company will be
validly issued, fully paid and nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are no
persons with registration 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 as have been
duly waived.
(g) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or to the
Company's knowledge any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change is called a "Material
Adverse Change"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, not in the ordinary course of business (other than incurring debt
to VEBA AG and/or its affiliates under existing credit facilities described in
the Prospectus), nor entered into any material transaction or agreement not in
the ordinary course of
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business ; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the
Company or other subsidiaries, any of its subsidiaries on any class of capital
stock or repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock.
(h) INDEPENDENT ACCOUNTANTS. KPMG Peat Marwick LLP, who have expressed
their opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) and supporting schedules
filed with the Commission as a part of the Registration Statement and included
in the Prospectus, are independent public or certified public accountants as
required by the Securities Act and Exchange Act.
(i) PREPARATION OF THE FINANCIAL STATEMENTS. The financial statements filed
with the Commission as a part of the Registration Statement and included in the
Prospectus present fairly (i) the consolidated financial position of the Company
and its subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified, (ii) the financial position
of Posco ▇▇▇▇ Co. Ltd. as of and at the dates indicated and the results of its
operations and cash flows for the periods specified, and (iii) the financial
position of Taisil Electronic Materials Corporation as of and at the dates
indicated and the results of its operations and cash flows for the periods
specified. The supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity with (i)
generally accepted accounting principles as applied in the United States with
respect to the Company's consolidated financial statements, (ii) the Financial
Accounting Standards, as approved by the Ministry of Finance and Economy of the
Republic of Korea, with respect to Posco ▇▇▇▇ Co. Ltd.'s financial statements,
and (iii) generally accepted accounting principles as applied in the Republic of
China with respect to Taisil Electronic Materials Corporation's financial
statements, in each case as applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No
other financial statements or supporting schedules are required to be included
in the Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Consolidated Financial Data" and
"Five-Year Selected Financial Data" fairly present the information set forth
therein on a basis consistent with that of the audited financial statements
contained in the Registration Statement.
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS SUBSIDIARIES.
Each of the Company and its subsidiaries that are corporations has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement, the Purchase Agreement and the
Standby Agreement. Each of the Company's subsidiaries that is not a corporation
has been duly organized and is validly existing as a legal entity in good
standing under the laws of the jurisdiction of its organization and has the
requisite power and authority to
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own, lease and operate its properties and to conduct its business as described
in the Prospectus. Each of the Company and each subsidiary is duly qualified as
a foreign corporation or limited liability company 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 for such jurisdictions where the failure to so qualify or to be
in good standing would not, individually or in the aggregate, result in a
Material Adverse Change. All of the issued and outstanding capital stock of each
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and MEMC Sarl, MEMC GmbH and MEMC U.K. Ltd.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Registration
Statement under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Registration Statement or upon exercise of outstanding options or warrants
described in the Registration Statement). The Common Stock (including the Common
Shares) conforms in all material respects to the description thereof contained
in the Registration Statement. All of the issued and outstanding shares of
Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those accurately described in the Registration
Statement. The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder,
set forth in the Registration Statement accurately and fairly presents in all
material respects the information required to be shown with respect to such
plans, arrangements, options and rights.
(l) STOCK EXCHANGE LISTING. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act and is listed, or in the case of the Private
Placement Shares, Common Shares and the Standby Shares, will be listed upon
official notice of issuance, on the New York Stock Exchange (the "NYSE"). The
Rights will be listed on the NYSE upon official notice of issuance. The Company
has taken no action designed to, or to the knowledge of the Company likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock or Rights from the NYSE, nor has the
Company received any notification that the Commission or the NYSE is
contemplating terminating such registration or listing.
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(m) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER AUTHORIZATIONS OR
APPROVALS REQUIRED. Except as disclosed in the Registration Statement, neither
the Company nor any of its subsidiaries is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of time, would
be in default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other 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 of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement, the Purchase Agreement and the Standby Agreement and consummation by
the Company of the transactions contemplated hereby and thereby and by the
Registration Statement (i) will not result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary, (ii) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering 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 of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary, except for such violations as would not
individually or in the aggregate result in a Material Adverse Change. No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for the Company's execution, delivery and performance of this
Agreement, the Purchase Agreement and the Standby Agreement and consummation by
the Company of the transactions contemplated hereby and thereby and by the
Registration Statement, except such as have been obtained or made by the Company
and are in full force and effect under the Securities Act, and except for
applicable state securities or blue sky laws and from the National Association
of Securities Dealers, Inc. (the "NASD"). As used herein, a "Debt Repayment
Triggering Event" means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or
other 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
material portion of such indebtedness by the Company or any of its subsidiaries.
(n) NO MATERIAL ACTIONS OR PROCEEDINGS. Except as disclosed in the
Registration Statement, there are no legal or governmental actions, suits or
proceedings pending or, to the Company's knowledge, threatened (i) against or
affecting the Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the Company
or any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the
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transactions contemplated by this Agreement, the Purchase Agreement or the
Standby Agreement. No material labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the Company's knowledge, is threatened
or imminent.
(o) INTELLECTUAL PROPERTY RIGHTS. Except as disclosed in the Registration
Statement, the Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would not result
in a Material Adverse Change. Except as disclosed in the Registration Statement,
any Preliminary Prospectus and the Prospectus, neither the Company nor any of
its subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict,
if the subject of an unfavorable decision, would result in a Material Adverse
Change.
(p) ALL NECESSARY PERMITS, ETC. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses as presently conducted, except where the
failure to possess such certificates, authorizations or permits, singly or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change. Neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling, finding or
settlement, would reasonably be expected to result in a Material Adverse Change.
(q) TITLE TO PROPERTIES. The Company and each of its subsidiaries has good
and marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(i) above (or elsewhere in the
Registration Statement), in each case free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except such
as would not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary are held under valid
and enforceable leases, with such exceptions as would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Change.
(r) TAX LAW COMPLIANCE. The Company and its consolidated subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against any
of them, except where the failure to make such filings or make such payments,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1(i) above in
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respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its consolidated
subsidiaries has not been finally determined.
(s) COMPANY NOT AN "INVESTMENT COMPANY." The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and after receipt of payment
for the Common Shares will not be, an "investment company" within the meaning of
Investment Company Act and will conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(t) INSURANCE. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change.
(u) NO PRICE STABILIZATION OR MANIPULATION. The Company (A) has not taken,
directly or indirectly, any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the issuance of the Rights or the sale or resale of the Common
Shares, (B) has not since the filing of the Registration Statement sold, bid for
or purchased, or paid anyone (other than the Dealer Managers) any compensation
for soliciting purchases of, Common Shares of the Company or the Rights and (C)
will not, until the later of the expiration of the Rights or the completion of
the distribution (within the meaning of Regulation M under the Exchange Act) of
the Common Shares, sell, bid for or purchase, apply or agree to pay to any
person (other than the Dealer Managers) any compensation for soliciting another
to purchase any other securities of the Company (except for the solicitation of
the exercises of Rights pursuant to this Agreement). The foregoing shall not
apply to the offer, sale, agreement to sell or delivery with respect to (1)
Common Shares offered and sold upon exercise of the Rights, as described in the
Prospectus, or (2) any shares of Common Stock sold pursuant to the Company's
employee benefit plans.
(v) RELATED PARTY TRANSACTIONS. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.
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(w) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the Company nor
any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(x) COMPANY'S ACCOUNTING SYSTEM. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; except where the failure to
maintain such a system could not reasonably be expected to result in a Material
Adverse Change.
(y) EXCHANGE ACT COMPLIANCE. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied when filed and will comply when filed in
all material respects with the requirements of the Exchange Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective and during
the Subscription Period, 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 fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(z) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed in the
Registration Statement and except as would not, individually or in the
aggregate, result in a Material Adverse Change, (i) neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or foreign law
or regulation relating to pollution or protection of human health or 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 emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or
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any of its subsidiaries is in violation of any Environmental Law; (ii) there is
no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company or its
subsidiaries has received written notice, and no written notice to the Company
or its subsidiaries by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys' fees or
penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its subsidiaries, now or in
the past (collectively, "Environmental Claims"), pending or, to the Company's
knowledge, threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the Company or any
of its subsidiaries has retained or assumed either contractually or by operation
of law; and (iii) to the Company's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries or against
any person or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or by
operation of law.
(aa) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. In the ordinary
course of its business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review and the amount of its established reserves, the Company has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Change.
(bb) ERISA COMPLIANCE. The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
with ERISA except as would not, individually or in the aggregate, result in a
Material Adverse Change. "ERISA Affiliate" means, with respect to the Company or
a subsidiary, any member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "Code") of which the
Company or such subsidiary is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. Except as disclosed in the
Registration Statement, as of December 31, 1997 no "employee benefit plan"
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established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.
Any certificate signed by an officer of the Company and delivered to a
Dealer Manager or to counsel for the Dealer Managers on the Representation Date
shall be deemed to be a representation and warranty by the Company to each
Dealer Manager as to the matters set forth therein.
SECTION 2. AGREEMENT TO ACT AS DEALER MANAGERS.
(a) APPOINTMENT OF DEALER MANAGERS. On the basis of the representations and
warranties contained herein, and subject to the terms and conditions of the
Rights Offering as set forth in the Prospectus;
(i) The Company hereby appoints the Dealer Managers to solicit, in
accordance with the Securities Act and the Exchange Act, and their
customary practice, the exercise of the Rights, subject to the terms and
conditions of this Agreement and the procedures described in the
Registration Statement; and
(ii) The Company agrees to furnish, or cause to be furnished, to the
Dealer Managers, lists, or copies of those lists, showing the names and
addresses of, and number of shares of Common Stock held by, stockholders as
of the Record Date, and the Dealer Managers agree to use such information
only in connection with the Rights Offering, and not to furnish the
information to any other person except for securities brokers and dealers
that have been requested by the Dealer Managers to solicit exercises of
Rights.
(b) SERVICES OF DEALER MANAGERS. The Dealer Managers agree to provide to
the Company, in addition to the services described in that certain Engagement
Letter among the Company and the Dealer Managers, dated October 20, 1998 (the
"Engagement Letter"), and in paragraph (a) of this Section 2, in accordance with
the Dealer Managers' customary practices those other services in connection with
the Rights Offering customarily performed by investment banks in rights
offerings of a like nature.
(c) STATUS OF DEALER MANAGERS. The Company and the Dealer Managers agree
that the Dealer Managers are independent contractors with respect to the
solicitation of the
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exercise of Rights and the performance of the other services to the Company
contemplated by this Agreement.
(d) LIABILITY OF DEALER MANAGERS. In rendering the services contemplated by
this Agreement, the Dealer Managers will not be subject to any liability to the
Company or any of its affiliates, for any act or omission on the part of any
securities broker or dealer (except with respect to the Dealer Managers acting
in such capacity) or any other person, and the Dealer Managers will not be
liable for acts or omissions in performing their obligations under this
Agreement, except for any losses, claims, damages, liabilities and expenses that
are finally judicially determined to have resulted primarily from the bad faith,
willful misconduct or gross negligence of the Dealer Managers of by reason of
the reckless disregard of the obligations and duties of the Dealer Managers
under this Agreement.
(e) DEALER MANAGER FEES. The fees payable to the Dealer Managers for the
services rendered and to be rendered pursuant to Section 2(a) and this Section
2(b) by the Dealer Managers are (i) $1,200,000 ($600,000 to each Dealer Manager)
payable at the closing of the Rights Offering (which amount is also set forth in
the Engagement Letter and shall not be in addition to the fees payable to the
Dealer Managers pursuant to the terms of the Engagement Letter) and (ii) the
reimbursement of the Dealer Manager's out-pocket expenses as described in
Section 4 and Section 6 of this Agreement.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Dealer Manager as
follows:
(a) DEALER MANAGER'S REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS. The
Company will use its best efforts to cause the Registration Statement and any
amendment thereof, to become effective. During such period beginning on the date
hereof and ending on the later of the Expiration Date or such date, as in the
opinion of counsel for the Dealer Managers, the Prospectus is no longer required
by law to be delivered in connection with sales pursuant to the exercise of the
Rights (the "Prospectus Delivery Period"), prior to amending or supplementing
the Registration Statement or the Prospectus (including any amendment or
supplement through incorporation by reference of any report filed under the
Exchange Act), the Company shall furnish to the Dealer Managers for review a
copy of each such proposed amendment or supplement, and the Company shall not
file any such proposed amendment or supplement to which the Dealer Managers
reasonably object in a timely fashion.
(b) SECURITIES ACT COMPLIANCE. After the date of this Agreement, the
Company shall promptly advise the Dealer Managers in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any amendment or
post-effective amendment to the Registration Statement or the Prospectus
pursuant to Rule 424(b) or any amendment or supplement to any Preliminary
Prospectus or the Prospectus, (iii) of the time and date that the
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Registration Statement or any post-effective amendment to the Registration
Statement becomes effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b) and 430A, as applicable, under
the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a timely
manner by the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES ACT
MATTERS. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the reasonable opinion of the Dealer Managers or counsel for the Dealer
Managers it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish at its own expense to the Dealer
Managers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS. The Company
agrees to furnish the Dealer Managers, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto (including any documents incorporated or deemed incorporated
by reference therein), and as many copies of the Supplementary Offering
Materials, as the Dealer Managers may reasonably request.
(e) BLUE SKY COMPLIANCE. The Company shall qualify or register the Common
Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial Securities laws of those
jurisdictions designated by the Dealer Managers, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Dealer Managers promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and
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15
in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) USE OF PROCEEDS. The Company shall apply the net proceeds from the sale
of the Common Shares sold by it in the manner described under the caption "Use
of Proceeds" in the Prospectus.
(g) TRANSFER AGENT. The Company shall maintain, at its expense, a registrar
and transfer agent for the Common Stock.
(h) EARNINGS STATEMENT. As soon as practicable, the Company will make
generally available to its security holders and to the Dealer Managers an
earnings statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the New York
Stock Exchange all reports and documents required to be filed under the Exchange
Act.
(j) EXCHANGE ACT COMPLIANCE. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
(k) LISTING OF RIGHTS AND COMMON SHARES. The Company will use its best
efforts to cause the Rights to be admitted to trading on a short term basis, and
the Shares to be duly authorized for listing, by the New York Stock Exchange on
or prior to the Record Date.
(l) SOLICITATION INFORMATION. The Company will, or will cause the
Subscription Agent, as defined in the Prospectus, to, advise the Dealer Managers
of the names and addresses of the Holders of Rights, and the number of Rights
held by them, on the Record Date, from time to time during the period of the
Rights Offering, as to all of the names and addresses of transferees of Rights
and the number of Rights transferred, and all exercises by Holders of Rights,
the total number of Rights exercised by each Holder, indicating the total number
of Rights verified to be in proper form for exercise, rejected for exercise and
being processed, and as to such other information as the Dealer Managers may
reasonably request; and will notify the Dealer Managers, not later than 5:00
P.M., New York City time, on the first business day following the Expiration
Date, of the total number of Rights exercised and Shares related thereto, the
total number of Rights verified to be in proper form for exercise, rejected for
exercise and being processed, and as to such other information as the Dealer
Managers may reasonably request.
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(m) NO STABILIZATION. The Company will not take, directly or indirectly,
any action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the issuance of the
Rights or the sale or resale of the Shares.
SECTION 4. PAYMENT OF EXPENSES. In addition to the compensation to the
Dealer Managers as described Section 2(e)(i), or otherwise in connection with
the Rights Offering, the Company agrees to pay directly, or reimburse the Dealer
Managers for, all reasonable costs, fees and expenses incurred in connection
with the performance of the Company's and the Dealer Managers' respective
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Common Shares (including all printing and engraving costs),
(ii) all fees and expenses of the registrar and transfer agent of the Common
Stock and the Subscription Agent, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Common Shares to the
Holders, (iv) all fees and expenses of the Company's counsel, independent public
or certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each Preliminary
Prospectus and the Prospectus, and all amendments and supplements thereto, the
Supplemental Offering Materials, (vi) all filing fees, attorneys' fees and
expenses incurred by the Company in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Common Shares for offer and sale under the state securities or blue
sky laws or the provincial securities laws of Canada, and, if requested by the
Dealer Managers, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto advising the Dealer Managers of such qualifications,
registrations and exemptions, (vii) the filing fees incident to the NASD's
review and approval of the Dealer Managers' participation in the offering and
distribution of the Common Shares, (viii) all fees and expenses of counsel for
the Dealer Managers, (ix) the fees and expenses associated with listing the
Common Shares and Rights on the New York Stock Exchange, (x) all travel
expenses, postage, facsimile and telephone charges incurred by the Company or
the Dealer Managers; and (xi) all other fees, costs and expenses referred to in
Item 14 of Part II of the Registration Statement. The Company shall be liable
for the foregoing payments whether or not the Rights Offering or the
transactions contemplated thereby are commenced, withdrawn, terminated or
cancelled; provided, however, that the Company shall not be obligated to
reimburse the Dealer Managers for costs and expenses incurred by the Dealer
Managers which, when aggregated with the costs and expenses reimbursed to the
Dealer Managers pursuant to the terms of the Engagement Letter, exceed $400,000.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE DEALER MANAGERS. The
obligations of the Dealer Managers hereunder shall be subject to the accuracy of
the representations and warranties on the part of the Company set forth in
Section 1 hereof as of the Execution Time, as of the Representation Date and at
all times during the Rights Offering, to the timely performance
16.
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by the Company of its covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the Representation Date, the Dealer
Managers shall have received from KPMG Peat Marwick LLP, independent public or
certified public accountants for the Company, a letter dated the Representation
Date addressed to the Dealer Managers, in form and substance previously agreed
to by the Dealer Managers, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to underwriters, delivered
according to Statement of Auditing Standards No. 72 (or any successor bulletin),
with respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO OBJECTION
FROM NASD. For the period from and after the Effective Date and prior to the
Expiration Date:
(i) the Registration Statement shall have become effective; the
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner
and within the time period required by Rule 424(b) under the Securities
Act; or the Company shall have filed a post-effective amendment to the
Registration Statement containing the information required by such Rule
430A, and such post-effective amendment shall have become effective;
(ii) no stop order suspending the effectiveness of the Registration
Statement, or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the Dealer Manager terms and arrangements.
(c) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. For the period
from and after the date of this Agreement, in the judgment of the Dealer
Managers, there shall not have occurred any Material Adverse Change.
(d) OPINION OF COUNSEL FOR THE COMPANY. On the Representation Date the
Dealer Managers shall have received the favorable opinion of ▇▇▇▇▇ ▇▇▇▇ LLP,
special counsel for the Company, and such other counsel reasonably acceptable to
the Dealer Managers, dated as of the Representation Date, the form of which is
attached as Exhibit A.
(e) OPINION OF COUNSEL FOR THE DEALER MANAGERS. On the Representation Date
the Dealer Managers shall have received the favorable opinion of ▇▇▇▇▇▇ Godward
LLP,
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counsel for the Dealer Managers, dated as of the Representation Date, with
respect to the matters set forth in paragraphs (i), (vii) (with respect to
subparagraph (i) only), (ix), (x) (xi) and (xiii) (with respect to the captions
"Description of Capital Stock" and "Plan of Distribution" under subparagraph (i)
only), (xii), and the next-to-last paragraph of Exhibit A.
(f) OFFICERS' CERTIFICATE. On the Representation Date the Dealer Managers
shall have received a written certificate executed by the Chief Executive
Officer or President of the Company and the Chief Financial Officer of the
Company, dated as of the Representation Date and in the name of and on behalf of
the Company, to the effect set forth in subsections (b)(ii) of this Section 5,
and further to the effect that:
(i) for the period from and after the date of this Agreement and prior
to the Representation Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Company set
forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of the Representation
Date; and
(iii) the Company has complied in all material respects with all the
agreements and satisfied in all material respects all the conditions on its
part to be performed or satisfied at or prior to the Representation Date.
(g) ADDITIONAL DOCUMENTS. On the Representation Date, the Dealer Managers
and counsel for the Dealer Managers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Common Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Dealer
Managers by notice to the Company at any time, which termination shall be
without liability on the part of any party to any other party, except that
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 6. REIMBURSEMENT OF DEALER MANAGERS' EXPENSES. If this Agreement is
terminated by the Dealer Managers pursuant to Section 5, Section 7 or Section
10(vii), or if the sale of the Common Shares to the Holders is not consummated
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof or to
consummate the transactions contemplated hereby, the Company agrees to reimburse
the Dealer Managers, severally, upon demand for all out-of-pocket expenses that
shall have been reasonably incurred by the Dealer Managers in connection with
the proposed Rights Offering and sale of the Common Shares, including but not
limited to those expenses set forth in
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Section 4 hereof; provided, however, that the Company shall not be obligated to
reimburse the Dealer Managers for costs and expenses incurred by the Dealer
Managers which, when aggregated with the costs and expenses reimbursed to the
Dealer Managers pursuant to the terms of the Engagement Letter, exceed $400,000.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Dealer Managers of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Dealer Manager, except
that the Company shall be obligated to reimburse the expenses of the Dealer
Managers pursuant to Sections 4 and 6 hereof, (b) any Dealer Manager to the
Company, or (c) any party hereto to any other party except that the provisions
of Section 8 and Section 9 shall at all times be effective and shall survive
such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE DEALER MANAGERS. The Company agrees to indemnify
and hold harmless each Dealer Manager, its officers and employees, and each
person, if any, who controls any Dealer Manager within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Dealer Manager
or such controlling person may become subject, arising out of or in connection
with the services rendered by the Dealer Managers to the Company in their
capacities as dealer managers, under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430A under the Securities Act, 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 (ii) upon any untrue statement
or alleged untrue statement of a material fact contained 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; or (iii) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; and to reimburse each
Dealer Manager and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by NMS) as such expenses
are reasonably incurred by such
19.
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Dealer Manager or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information furnished to the Company by the
Dealer Managers expressly for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto) as set
forth in Section 8(b). The indemnity agreement set forth in this Section 8(a)
shall be in addition to any liabilities that the Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS. Each Dealer
Manager agrees, severally and not jointly, to indemnify and hold harmless the
Company, each of 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 Securities Act or Section 20 of the Exchange Act, against
any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Dealer Manager), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with information
furnished to the Company by the Dealer Managers expressly for use therein; and
to reimburse the Company, or any such director, officer or controlling person
for any legal and other expenses as such expenses are reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Company hereby acknowledges that the
only information that the Dealer Managers have furnished to the Company
expressly for use in the Registration Statement, any Preliminary Prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth under the caption "Plan of Distribution" in the Prospectus in the first
three sentences of the paragraph relating to possible stabilizing transactions
and the last sentence of the last paragraph; and the Dealer Managers confirm
that such statements are correct. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each Dealer Manager
may otherwise have.
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(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (NMS in the case of Section 8(b) and Section 9) which
approval shall not unreasonably be withheld, representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, which written consent shall not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for reasonable fees and expenses of counsel as contemplated by Section 8(c)
hereof, the indemnifying party agrees that it shall be
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liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request (and reasonably satisfactory
documentation thereof) and notice of such proposed settlement and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held to
be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Dealer Managers, on
the other hand, from the offering of the Common Shares pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Dealer Managers, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Dealer Managers, on the other hand, in connection with the offering of
the Common Shares contemplated by this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Common Shares contemplated by this Agreement (before deducting expenses)
received by the Company, and the total Dealer Manager fees and reimbursed
expenses received by the Dealer Managers, in each case as set forth on the front
cover page of the Prospectus, bear to the aggregate public offering price of the
Common Shares as set forth on such cover. The relative fault of the Company, on
the one hand, and the Dealer Managers, 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 or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on the one hand, or the Dealer
Managers, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
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The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company and the Dealer Managers agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Dealer Managers 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 in this Section 9.
Notwithstanding the provisions of this Section 9, no Dealer Manager shall
be required to contribute any amount in excess of the fees actually received by
such Dealer Manager in connection with the transactions contemplated by this
Agreement. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Dealer
Managers' obligations to contribute pursuant to this Section 9 are several, and
not joint, in proportion to their respective fees received as such fees are
described under the caption "Plan of Distribution" in the Prospectus. For
purposes of this Section 9, each officer and employee of a Dealer Manager and
each person, if any, who controls a Dealer Manager within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as such Dealer Manager, 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 with the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company.
SECTION 10. TERMINATION OF THIS AGREEMENT. This Agreement may be terminated
by the Dealer Managers by notice given to the Company if at any time prior to
the Expiration Date (i) trading or quotation in any of the Company's securities
shall have been suspended or limited by the Commission or by the New York Stock
Exchange, or trading in securities generally on either the Nasdaq Stock Market
or the New York Stock Exchange shall have been suspended or limited, or minimum
or maximum prices shall have been generally established on any of such stock
exchanges by the Commission or the NASD; (ii) a general banking moratorium shall
have been declared by any of federal or New York authorities; (iii) there shall
have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any substantial change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States' or
international political, financial or economic conditions, as in the judgment of
the Dealer Managers is material and adverse and makes it impracticable to market
the Common Shares in the manner and on the terms described in the Prospectus or
to enforce contracts for the sale of
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securities; (iv) in the judgment of the Dealer Managers there shall have
occurred any Material Adverse Change; (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Dealer Managers may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured; (vi) if one or more of the
conditions set forth in Section 5 provided for therein are not met and the
Dealer Managers have given the Company notice thereof; or (vii) the Company
amends the terms of the Rights Offering in a manner unacceptable to the Dealer
Managers. Any termination pursuant to this Section 10 shall be without liability
on the part of (a) the Company to any Dealer Manager, except that the Company
shall be obligated to reimburse the expenses of the Dealer Managers pursuant to
Sections 4 and 6 hereof, (b) any Dealer Manager to the Company, or (c) of any
party hereto to any other party except that the provisions of Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the Dealer Managers will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Dealer Manager or the Company or any of its or their partners,
officers or directors or any controlling person, as the case may be, and will
survive any termination of this Agreement.
SECTION 12. REFERENCE TO DEALER MANAGERS. The Company agrees that any
reference to the Dealer Managers in the Prospectus or the Supplemental Offering
Materials, or any other release, publication or communication to any party
outside the Company is subject to the Dealer Managers' prior approval, which
shall not be unreasonably withheld. If the Dealer Managers resign or are
terminated prior to the dissemination of the Prospectus or the Supplemental
Offering Materials, or any other release, publication or communication, no
reference shall be made therein to the Dealer Managers without their prior
written consent, except as may be required by law.
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Dealer Managers:
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
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NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Company:
MEMC Electronic Materials, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (City of ▇'▇▇▇▇▇▇)
▇.▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 8 and Section 9,
and in each case their respective successors, and no other person will have any
right or obligation hereunder.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS; CONSENT TO JURISDICTION.
(a) GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(b) CONSENT TO JURISDICTION. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in the federal courts of the United States of America located in
or the courts of the State of New York in each case located in the City of New
York (collectively, the "Specified Courts"), and each party irrevocably submits
to the non-exclusive jurisdiction of such courts in any such suit, action
25.
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or proceeding. Service of any process, summons, notice or document by mail to
such party's address set forth above shall be effective service of process for
any suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement with respect to the services to the
Company of the Dealer Managers in their capacities as dealer managers and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The Table of Contents and the Section headings
herein are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any Preliminary Prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
MEMC ELECTRONIC MATERIALS, INC.
--------------------------------------
[Title]
The foregoing Dealer Manager Agreement is hereby confirmed and accepted by
the Dealer Managers in San Francisco, California as of the date first above
written.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
BY NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
By:
-------------------------------------------
[Title]
27.
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EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to Section 5(d)
of the Dealer Manager Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Representation Date.
(i) The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware.
(ii) The Company 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 the Dealer
Manager Agreement, the Purchase Agreement and the Standby Agreement.
(iii) To such counsel's knowledge, the Company is duly qualified as a
foreign corporation to transact business and is in good standing in the State of
Missouri.
(iv) Each of MEMC Southwest Inc. and MEMC Pasadena, Inc. is a corporation
validly existing and in good standing under the laws of the State of Delaware,
and each of such corporations (collectively, the "U.S. Subsidiaries") has
corporate power and authority to own, lease and operate its properties and to
conduct its business.
(v) All of the issued and outstanding capital stock of each such U.S.
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned of record by the Company, directly or through
subsidiaries, and, to the knowledge of such counsel, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or any pending or
threatened claim.
(vi) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus under the caption "Capitalization" (except for
subsequent issuances pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus, or pursuant to exercise of options referred
to in the Prospectus).
(vii) No stockholder of the Company or any other person has any preemptive
right, right of first refusal or other similar right to subscribe for or
purchase shares of Common Stock of the Company arising (i) by operation of the
charter or by-laws of the Company or the General Corporation Law of the State of
Delaware or (ii) to the knowledge of such counsel, pursuant to any agreement to
which the Company is a party.
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(viii) The Dealer Manager Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
in accordance with its terms, except as Sections 8 and 9 of the Agreement as to
which such counsel need not express an opinion and except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(ix) The Common Shares to be issued by the Company pursuant to the Rights
Offering, the Purchase Agreement and the Standby Agreement have been duly
authorized for issuance and sale and, when issued and delivered by the Company
as set forth in the Prospectus, the Purchase Agreement or the Standby Agreement,
as applicable, against payment of the consideration set forth therein, will be
validly issued, fully paid and nonassessable.
(x) Such counsel has been advised by the staff of the Commission that the
Registration Statement has been declared effective by the Commission under the
Securities Act. To the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act and no proceedings for such purpose have been instituted or are pending or
are threatened by the Commission. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the Securities Act has been
made in the manner and within the time period required by such Rule 424(b).
(xi) The Registration Statement, the Prospectus (including any document
incorporated by reference therein), and each amendment or supplement to the
Registration Statement and the Prospectus (including any document incorporated
by reference therein), as of their respective effective or issue dates (other
than the financial statements and schedules and other financial and statistical
data included (or incorporated by reference) therein or omitted therefrom, as to
which no opinion need be rendered) comply as to form in all material respects
with the applicable requirements of the Securities Act.
(xii) The Common Shares and Rights have been approved for listing on the
New York Stock Exchange.
(xiii) The statements (i) in the Prospectus (directly or by incorporation
by reference therein) under the captions "Risk Factors--Restrictive Covenants
Tied to Change of Control" and "--Risks of Taisil Joint Venture," "Recent
Developments," "The Rights Offering--Stock Sale to VEBA Corporation" and
"--Standby Agreement," "Business--Joint Ventures," "Certain Relationships and
Related Transactions," "Certain Federal Income Tax Considerations," "Description
of Capital Stock," "Item 5 - Other Events" (Current Report on Form 8-K filed
October 22, 1998), "Item 2 - Properties" (Annual Report on Form 10-K/A filed
October 22, 1998), and "Employment Agreements" (pages 16 through 18 of the Proxy
Statement for the 1998 Annual Meeting of the Company), and (ii) in Item 15 of
Part II of the Registration Statement, insofar as such statements constitute
matters of law or summaries of legal matters, the Company's charter or by-law
provisions, documents, agreements or legal proceedings, has been
29.
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reviewed by such counsel and fairly present and summarize, in all material
respects, the matters, provisions, documents, agreements or proceedings referred
to therein.
(xiv) To the knowledge of such counsel, there are no legal or governmental
actions, suits or proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed therein.
(xv) To the knowledge of such counsel, there are no Existing Instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.
(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any federal or Missouri court, regulatory body or
other governmental authority or agency, is required for the execution, delivery
and performance of the Dealer Manager Agreement, the Purchase Agreement and
Standby Agreement by the Company and consummation of the transactions
contemplated thereby and by the Prospectus, except as required under the
Securities Act, applicable state securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of the Dealer Manager Agreement, the
Purchase Agreement and the Standby Agreement by the Company and the performance
by the Company of its obligations thereunder (other than performance by the
Company of its obligations under the indemnification and contribution sections
of such agreements, as to which no opinion need be rendered) (i) have been duly
authorized by all necessary corporate action on the part of the Company; (ii)
will not result in any violation of the provisions of the charter or by-laws of
the Company; (iii) will not constitute a breach of, or Default or a Debt
Repayment Triggering Event under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries, to the knowledge of such counsel, pursuant to any agreement
filed as an exhibit to the Registration Statement or any document incorporated
by reference therein; or (iv) to the knowledge of such counsel, will not result
in any violation of any federal or Missouri law, administrative regulation or
administrative or court decree recognized by such counsel as applicable to the
Company.
(xviii) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.
(xix) Except as disclosed in the Prospectus under the caption "Risk
Factors--Shares Eligible for Future Sale," to the knowledge of such counsel,
there are no persons with registration 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 the Dealer Manager Agreement except
for such rights as have been duly waived.
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(xx) Each document filed pursuant to the Exchange Act (other than the
financial statements and schedules and other financial and statistical data
included therein or omitted therefrom, as to which no opinion need be rendered)
and incorporated or deemed to be incorporated by reference in the Prospectus, as
amended, complied when so amended and filed as to form in all material respects
with the Exchange Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Dealer Managers at which the
contents of the Registration Statement and the Prospectus, and any supplements
or amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the Representation Date, as the case may be,
contained an untrue statement of a material fact or omitted 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 (it being understood
that such counsel need express no belief as to the financial statements or
schedules or other financial, statistical or other data or schedules derived
therefrom, included or incorporated by reference in or omitted from the
Registration Statement or the Prospectus or any amendments or supplements
thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the laws of the
State of Missouri, the Delaware General Corporation Law, or the federal law of
the United States, to the extent they deem proper and specified in such opinion,
upon the opinion (which shall be dated the Representation Date), shall be
reasonably satisfactory in form and substance to the Dealer Managers, shall
expressly state that the Dealer Managers may rely on such opinion as if it were
addressed to them and shall be furnished to the Dealer Managers) of other
counsel of good standing whom they believe to be reliable and who are reasonably
satisfactory to counsel for the Dealer Managers; and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Company and public officials; provided, however, that any opinion that relates
to the Delaware General Corporation Law may be delivered by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Finger, P.A. In addition, the foregoing opinion may contain customary
assumptions and qualifications.
31.
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_______________ Shares
MEMC ELECTRONIC MATERIALS, INC.
Common Stock
Dealer Manager Agreement
dated [___], 1998
33
TABLE OF CONTENTS
Section 1. Representations and Warranties of the Company...................... 3
(a) Compliance with Registration Requirements.......................... 3
(b) Offering Materials Furnished to Dealer Managers.................... 3
(c) Distribution of Offering Material By the Company................... 4
(d) The Dealer Manager Agreement....................................... 4
(e) Authorization of the Common Shares and Private Placement Shares.... 4
(f) No Applicable Registration or Other Similar Rights................. 4
(g) No Material Adverse Change......................................... 4
(h) Independent Accountants............................................ 5
(i) Preparation of the Financial Statements............................ 5
(j) Incorporation and Good Standing of the Company and its Subsidiaries. 5
(k) Capitalization and Other Capital Stock Matters..................... 6
(l) Stock Exchange Listing............................................. 6
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required............................... 7
(n) No Material Actions or Proceedings................................. 7
(o) Intellectual Property Rights....................................... 8
(p) All Necessary Permits, etc......................................... 8
(q) Title to Properties................................................ 8
(r) Tax Law Compliance................................................. 8
(s) Company Not an "Investment Company."............................... 9
(t) Insurance.......................................................... 9
(u) No Price Stabilization or Manipulation............................. 9
(v) Related Party Transactions......................................... 9
(w) No Unlawful Contributions or Other Payments........................ 10
(x) Company's Accounting System........................................ 10
(y) Exchange Act Compliance............................................ 10
(z) Compliance with Environmental Laws................................. 10
(aa) Periodic Review of Costs of Environmental Compliance............... 11
i.
34
(bb) ERISA Compliance.................................................... 11
Section 2. Agreement to Act as Dealer Managers................................. 12
(a) Appointment of Dealer Managers...................................... 12
(b) Services of Dealer Managers......................................... 12
(c) Status of Dealer Managers........................................... 12
(d) Liability of Dealer Managers........................................ 13
(e) Dealer Manager Fees................................................. 13
Section 3. Additional Covenants of the Company................................. 13
(a) Dealer Manager's Review of Proposed Amendments and Supplements...... 13
(b) Securities Act Compliance........................................... 13
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters.............................................. 14
(d) Copies of any Amendments and Supplements to the Prospectus.......... 14
(e) Blue Sky Compliance................................................. 14
(f) Use of Proceeds..................................................... 15
(g) Transfer Agent...................................................... 15
(h) Earnings Statement.................................................. 15
(i) Periodic Reporting Obligations...................................... 15
(j) Exchange Act Compliance............................................. 15
(k) Listing of Rights and Common Shares................................. 15
(l) Solicitation Information............................................ 15
(m) No Stabilization.................................................... 16
Section 4. Payment of Expenses................................................. 16
Section 5. Conditions of the Obligations of the Dealer Managers................ 16
(a) Accountants' Comfort Letter......................................... 17
(b) Compliance with Registration Requirements; No Stop
Order; No Objection from NASD....................................... 17
(c) No Material Adverse Change or Ratings Agency Change................. 17
(d) Opinion of Counsel for the Company.................................. 17
(e) Opinion of Counsel for the Dealer Managers.......................... 17
(f) Officers' Certificate............................................... 18
ii.
35
(g) Additional Documents.................................................. 18
Section 6. Reimbursement of Dealer Managers' Expenses............................ 18
Section 7. Effectiveness of this Agreement....................................... 19
Section 8. Indemnification....................................................... 19
(a) Indemnification of the Dealer Managers................................ 19
(b) Indemnification of the Company, its Directors and Officers............ 20
(c) Notifications and Other Indemnification Procedures.................... 21
(d) Settlements........................................................... 21
Section 9. Contribution.......................................................... 22
Section 10. Termination of this Agreement......................................... 23
Section 11. Representations and Indemnities to Survive Delivery................... 24
Section 12. Reference to Dealer Managers.......................................... 24
Section 13. Notices............................................................... 24
Section 14. Successors............................................................ 25
Section 15. Partial Unenforceability.............................................. 25
Section 16. Governing Law Provisions; Consent to Jurisdiction..................... 25
(a) Governing Law Provisions.............................................. 25
(b) Consent to Jurisdiction............................................... 25
Section 17. General Provisions.................................................... 26
iii.