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MEMC ELECTRONIC MATERIALS, INC.
(a Delaware corporation)
18,250,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: August 16, 2005
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Table of Contents
Page
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UNDERWRITING AGREEMENT............................................................................................1
SECTION 1. Representations and Warranties..................................................................3
(a) Representations and Warranties by the Company...................................................3
(i) Compliance with Registration Requirements..............................................3
(ii) Incorporated Documents.................................................................4
(iii) Independent Accountants................................................................4
(iv) Financial Statements...................................................................4
(v) No Material Adverse Change in Business.................................................4
(vi) Good Standing of the Company...........................................................5
(vii) Good Standing of Subsidiaries..........................................................5
(viii) Capitalization.........................................................................6
(ix) Authorization of Agreement.............................................................6
(x) Description of Securities..............................................................6
(xi) Absence of Defaults and Conflicts......................................................6
(xii) Absence of Labor Dispute...............................................................7
(xiii) Absence of Proceedings.................................................................7
(xiv) Accuracy of Exhibits...................................................................7
(xv) Possession of Intellectual Property....................................................7
(xvi) Absence of Further Requirements........................................................7
(xvii) Possession of Licenses and Permits.....................................................8
(xviii) Title to Property......................................................................8
(xix) Investment Company Act.................................................................8
(xx) Environmental Laws.....................................................................8
(xxi) Statistical Data.......................................................................9
(xxii) No Brokers' Fees.......................................................................9
(xxiii) Registration Rights....................................................................9
(xxiv) Related Party Transactions.............................................................9
(xxv) ERISA.................................................................................10
(xxvi) Tax Returns...........................................................................10
(xxvii) Disclosure Controls and Procedures....................................................10
(xxviii) Evaluation of Disclosure Controls and Procedures......................................10
(xxix) Absence of Changes in Internal Controls...............................................11
(xxx) Listing...............................................................................11
(xxxi) Shares Issued upon Exercise of the Warrants...........................................11
(xxxii) The Warrants..........................................................................11
(b) Representations and Warranties by the Selling Stockholders.....................................11
(i) Material Information..................................................................11
(ii) Authorization of Agreements...........................................................11
(iii) Good and Valid Title..................................................................12
(iv) Absence of Manipulation...............................................................12
(v) Absence of Further Requirements.......................................................12
(vi) Exercise of Warrants..................................................................12
(c) Officer's Certificates.........................................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................13
(a) Securities.....................................................................................13
(b) [Intentionally omitted]........................................................................13
(c) Payment........................................................................................13
(d) Denominations; Registration....................................................................13
SECTION 3. Covenants of the Company.......................................................................13
(a) Compliance with Securities Regulations and Commission Requests.................................13
(b) Filing of Amendments...........................................................................14
(c) Delivery of Registration Statements............................................................14
(d) Delivery of Prospectuses.......................................................................14
(e) Continued Compliance with Securities Laws......................................................15
(f) Blue Sky Qualifications........................................................................15
(g) Rule 158.......................................................................................15
(h) Listing........................................................................................15
(i) [Intentionally Omitted]........................................................................15
(j) Reporting Requirements.........................................................................16
SECTION 4. Payment of Expenses............................................................................16
(a) Expenses.......................................................................................16
(b) Termination of Agreement.......................................................................16
SECTION 5. Conditions of Underwriters' Obligations........................................................16
(a) Effectiveness of Registration Statement........................................................17
(b) No Material Misstatement or Omission...........................................................17
(c) Corporate Proceedings..........................................................................17
(d) Opinion of Counsel for Company.................................................................17
(e) Opinion of Senniger, Powers, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇..................................................17
(f) Opinion of Abe, Ikubo & Katayama...............................................................17
(g) Opinion of Hwang Mok Park P.C..................................................................17
(h) Opinion of Studio Legale Tosato................................................................17
(i) Opinions of Counsel for the Selling Stockholders...............................................18
(j) Opinion of Counsel for Underwriters............................................................18
(k) Officers' Certificate..........................................................................18
(l) Certificate of Selling Stockholders............................................................18
(m) Accountant's Comfort Letter....................................................................19
(n) Bring-down Comfort Letter......................................................................19
(o) No Objection...................................................................................19
(p) Lock-up Agreements.............................................................................19
(q) [Intentionally omitted]........................................................................19
(r) No Material Adverse Change.....................................................................19
(s) Additional Documents...........................................................................19
(t) Termination of Agreement.......................................................................20
SECTION 6. Indemnification................................................................................20
(a) Indemnification of Underwriters................................................................20
(b) Indemnification of Underwriters by the Selling Stockholders....................................21
(c) Indemnification of Company, Directors and Officers and Selling Stockholders....................22
(d) Actions against Parties; Notification..........................................................22
(e) Information Furnished by Underwriters..........................................................23
(f) Settlement without Consent if Failure to Reimburse.............................................23
(g) Other Agreements with Respect to Indemnification...............................................23
SECTION 7. Contribution...................................................................................23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................25
SECTION 9. Termination of Agreement.......................................................................25
(a) Termination; General...........................................................................25
(b) Liabilities....................................................................................25
SECTION 10. Default by One or More of the Underwriters.....................................................25
SECTION 11. Default by a Selling Stockholder...............................................................26
SECTION 12. Notices........................................................................................27
SECTION 13. Counterparts...................................................................................27
SECTION 14. Parties........................................................................................27
SECTION 15. No Advisory or Fiduciary Relationship..........................................................27
SECTION 16. Governing Law and Time.........................................................................28
SECTION 17. Effect of Headings.............................................................................28
SCHEDULES
Schedule 1 - The Underwriters.....................................................................Sch 1-1
Schedule 2 - Securities to be Sold ...............................................................Sch 2-1
Schedule 3 - Pricing Information..................................................................Sch 3-1
Schedule 4 - List of Subsidiaries.................................................................Sch 4-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................................................A-1
Exhibit B - Form of Opinion of Senniger, Powers, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇......................................B-1
Exhibit C - Form Opinion of Abe, Ikubo & Katayama......................................................C-1
Exhibit D - Form of Opinion of Hwang Mok Park P.C......................................................D-1
Exhibit E - Form of Opinion of Studio Legale Tosato....................................................E-1
Exhibit F - Form of Opinion of Counsel for the Selling Stockholders....................................F-1
Exhibit G - Form of Lock-up Letter for Selling Stockholders............................................G-1
MEMC ELECTRONIC MATERIALS, INC.
(a Delaware corporation)
18,250,000 Shares of Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
----------------------
August 16, 2005
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
MEMC Electronic Materials, Inc., a Delaware corporation (the
"Company"), and the persons listed on Schedule 2 hereto (the "Selling
Stockholders"), confirm their respective agreements with ▇▇▇▇▇▇ Brothers Inc.
("▇▇▇▇▇▇ Brothers"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") (collectively, the "Underwriters," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof) with respect to the sale by the Selling Stockholders, acting
severally and not jointly, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock") set forth in Schedules
1 and 2 hereto. The aforesaid 18,250,000 shares of Common Stock to be purchased
by the Underwriters are hereinafter called, collectively, the "Securities".
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Underwriters deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-109120) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"). The registration statement includes a base prospectus prepared in
accordance with Rule 415 under the 1933 Act relating to the Securities and the
offering thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations").
Such registration statement has been declared effective by the Commission. As
provided in Section 3(a), a prospectus supplement reflecting the terms of the
offered Securities, the terms of the offering thereof and the other matters set
forth herein will be prepared and filed pursuant to Rule 424 of the 1933 Act
Regulations. Such prospectus supplement, in the form first filed after the date
hereof pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement." Such registration statement (as so amended, if applicable),
including the exhibits thereto, and schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time such registration statement became effective, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The base prospectus
included in the Registration Statement relating to all offerings of Securities
under the Registration Statement, as supplemented by the Prospectus Supplement
relating to the offering of the Securities in the form first furnished to the
Underwriters by the Company for use in connection with the offering of the
Securities, is herein called the "Prospectus", except that, if such base
prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement is first filed pursuant to Rule 424, the term "Prospectus"
shall refer to the base prospectus, as so amended or supplemented and as
supplemented by the Prospectus Supplement, in either case including all
documents incorporated by reference therein. Promptly after execution and
delivery of this Agreement, the Company will prepare a Prospectus Supplement
that complies with the 1933 Act and that sets forth the number of offered
Securities, the name of the Underwriters, the price at which the offered
Securities are to be purchased by the Underwriters from the Selling
Stockholders, the public offering price, any selling concession and reallowance,
and such other information as the Underwriters, the Company and the Selling
Stockholders deem appropriate in connection with the offering of the offered
Securities. The Company will promptly transmit copies of the Prospectus to the
Commission for filing pursuant Rule 424 under the 1933 Act. For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or the
Prospectus Supplement or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" (or other
references of like import) in the Registration Statement or the Prospectus shall
be deemed to mean and include all such financial statements and schedules and
other information which is incorporated by reference in the Registration
Statement 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 Securities Exchange Act of 1934, as amended (the "1934 Act") which is
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, and as of the
Closing Time referred to in Section 2(c) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time, the Registration
Statement, any Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not as of such times contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include as of such times an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through ▇▇▇▇▇▇ Brothers or
▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement or
Prospectus.
The prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in
all material respects with the 1933 Act Regulations and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply as
of such times in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations or the 1934 Act and the rules
and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the
Closing Time, did not and will not as of such times contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated Subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows
of the Company and its consolidated Subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles as applied in the United
States ("GAAP") with respect to the Company's consolidated financial
statements and condensed financial information and generally accepted
accounting principles applied in the Republic of China with respect to
Taisil Electronic Materials Corporation's ("Taisil") financial
statements, in each case applied on a consistent basis throughout the
periods involved except as otherwise disclosed in such financial
statements. The supporting schedules, if any, included in the
Registration Statement and Prospectus present fairly in accordance
with GAAP the information required to be stated therein. The summary
consolidated financial data in the Prospectus Supplement present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement (other than the employment data therein
which is unaudited for all periods).
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Company or any of its Subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its Subsidiaries considered as one enterprise, and (C)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock. Neither the
Company nor any of its Subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree which may reasonably be expected
to result in a Material Adverse Effect, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company
or any of its Subsidiaries otherwise than as set forth or contemplated
in the Prospectus and except for changes to the Company's capital
stock as a result of the exercise of stock options under employee
benefit plans subsequent to June 30, 2005.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Significant Subsidiary" and, collectively, the "Significant
Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate or organizational power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation 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 where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement (including the documents incorporated by
reference therein), all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, other than the capital
stock of Taisil, MEMC Korea Company and MEMC Kulim Electronic
Materials, Sdn. Bhd., is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except for the security
interests in such capital stock granted to certain lenders, noteholders
and guarantors as described in the Prospectus; none of the outstanding
shares of capital stock of any Significant Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Significant Subsidiary. The only subsidiaries of the Company are
the subsidiaries listed on Schedule 4 hereto (each a "Subsidiary" and,
collectively, the "Subsidiaries").
(viii) Capitalization. The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Description of Securities. The Common Stock conforms to all
statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments
defining the same.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any Subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the issuance by the Company
of the Securities to be issued upon the exercise of the warrants issued
by the Company to the Selling Stockholders under that certain
Restructuring Agreement dated November 13, 2001 between the Company and
TPG Wafer Holdings LLC (the "Warrants"), and the consummation of the
transactions contemplated herein and in the Registration Statement and
the Prospectus and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action
of the Company and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or, except as set forth or
contemplated in the Prospectus, Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any Subsidiary
for which the holder has not agreed to waive or forego such right.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement or the Prospectus (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, covenants not to ▇▇▇,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would reasonably be expected to render any
Intellectual Property invalid or inadequate to protect the interest of
the Company or any of its Subsidiaries therein, and which infringement
or conflict or invalidity or inadequacy, singly or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any third party or any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection
with the offering or sale of the Securities hereunder, the issuance by
the Company of the Securities to be issued upon the exercise of the
Warrants, or the consummation of the transactions contemplated by this
Agreement, except such as have been obtained by the Company, and except
for applicable state securities or blue sky laws and requirements of
the National Association of Securities Dealers, Inc. (the "NASD").
(xvii) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess such Governmental Licenses, could not
reasonably be expected to have a Material Adverse Effect; the Company
and its Subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company nor
any of its Subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its Subsidiaries have
good and marketable title to all real property owned by the Company and
its Subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Registration Statement and the Prospectus,
(b) secure debt instruments and/or credit facilities reflected in the
financial statements included in the Registration Statement or
Prospectus or (c) do not, singly or in the aggregate, have a Material
Adverse Effect and do not interfere with the use made and proposed to
be made of such property by the Company or any of its Subsidiaries;
except as otherwise disclosed in the Registration Statement, all of the
leases and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company
or any of its Subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xix) Investment Company Act. The Company is not, and upon the
sale of the Securities as herein contemplated will not be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result
in a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its Subsidiaries and (D) to the
knowledge of the Company, there are no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or any
of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxi) Statistical Data. The statistical and market-related data
included in the Prospectus and the Registration Statement are based on
or derived from sources which the Company believes to be reliable and
accurate.
(xxii) No Brokers' Fees. Except as described in the Prospectus,
there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder's fee
or other like payment in connection with this offering.
(xxiii) Registration Rights. Except as described in the
Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the 1933 Act
with respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities in the
securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the 1933 Act. Except as disclosed
in the Prospectus and except with respect to the registration rights
exercised by the Selling Stockholders hereunder, all persons (A) to
whom the Company has granted such demand or piggyback registration
rights and (B) whose rights may be exercised in connection with the
registration and offering of the Securities have waived such
registration rights.
(xxiv) Related Party Transactions. No relationship, direct or
indirect, exists between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company on the other hand, which is required to be described in the
Prospectus which is not so described.
(xxv) ERISA. Except as would not reasonably be expected to have a
Material Adverse Effect, the Company and its Subsidiaries are in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any Subsidiary of the Company would have any
liability; neither the Company nor any of its Subsidiaries has incurred
nor does the Company or any of its Subsidiaries expect to incur
liability under (A) Title IV of ERISA with respect to the termination
of, or withdrawal from, any "pension plan" or (B) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company or any Subsidiary of the
Company would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xxvi) Tax Returns. The Company has filed all federal, state and
local income and franchise tax returns required to be filed through the
date hereof and has paid all taxes due thereon, and no tax deficiency
has been determined adversely to the Company or any of its Subsidiaries
which has had (nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
Subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
(xxvii) Disclosure Controls and Procedures. The Company has
established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the Exchange Act), which (A) are
designed to ensure that material information relating to the Company,
including its consolidated Subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which
the periodic reports required under the 1934 Act are being prepared;
(B) have been evaluated for effectiveness as of June 30, 2005; and (C)
are effective in all material respects to perform the functions for
which they were established.
(xxviii) Evaluation of Disclosure Controls and Procedures. Based
on the evaluation of its disclosure controls and procedures through the
date hereof, the Company is not aware of (A) any significant deficiency
in the design or operation of internal control over financial reporting
which could adversely affect the Company's ability to record, process,
summarize and report financial data or any material weaknesses in
internal control over financial reporting; or (B) any fraud, whether or
not material, that involves management or other employees who have a
significant role in the Company's internal control over financial
reporting and that has not been reported to the Company's registered
public accounting firm and the Audit Committee of the Company's Board
of Directors.
(xxix) Absence of Changes in Internal Controls. Since the date of
the most recent evaluation of such disclosure controls and procedures,
there have been no changes in internal control over financial
reporting, including any corrective actions with regard to significant
deficiencies and material weaknesses, that has materially affected, or
is reasonably likely to materially affect, the Company's internal
control over financial reporting.
(xxx) Listing. The Securities are listed on the New York Stock
Exchange.
(xxxi) Shares Issued upon Exercise of the Warrants. The unissued
Securities issuable upon the exercise of the Warrants have been duly
authorized by the Company and validly reserved for issuance, and, at
the time of delivery of such Securities to the Underwriters, such
Securities will be issued and delivered in accordance with the
provisions of the Warrants and will be validly issued, fully paid and
non-assessable and will conform to the description thereof in the
Registration Statement and the Prospectus.
(xxxii) The Warrants. The Warrants were duly authorized and
validly issued and constitute valid and binding obligations of the
Company, and the Selling Stockholders are entitled to the benefits
provided by the Warrants; and the Warrants conform in all material
respects to the descriptions thereof in the Registration Statement and
the Prospectus.
(b) Representations and Warranties by the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter as of the date hereof, and as of the Closing Time, and agrees with
each Underwriter, as follows:
(i) Material Information. The sale of the Securities by such
Selling Stockholder is not prompted by any material information
concerning the Company which is not set forth in the Prospectus.
(ii) Authorization of Agreements. Each Selling Stockholder has the
full right, corporate, limited partnership or limited liability company
power, as the case may be, and authority to enter into this Agreement
and to sell, transfer and deliver the Securities to be sold by such
Selling Stockholder hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Securities to be sold by
each Selling Stockholder and the consummation of the transactions
contemplated herein and compliance by each Selling Stockholder with its
obligations hereunder have been duly authorized by each Selling
Stockholder and do not and will not, conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which any of the
property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
organizational documents of such Selling Stockholder, or any applicable
treaty, law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over such Selling Stockholder or any of
its properties.
(iii) Good and Valid Title. Each Selling Stockholder has and will
at the Closing Time have good and valid title to the Securities to be
sold by the Selling Stockholder hereunder (other than any Securities to
be issued upon exercise of the Warrants) free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance
of any kind, other than pursuant to this Agreement, and, with respect
to any Securities to be issued upon exercise of the Warrants, such
Selling Stockholder will have, immediately prior to the Closing Time,
good and valid title to such Securities to be sold by the Selling
Stockholder hereunder free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any
adverse claim (within the meaning of Section 8-105 of the Uniform
Commercial Code as in effect in the State of New York), each such
Underwriter will receive good and valid title to the Securities
purchased by it from the Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind. (iv) Absence of Manipulation. The Selling
Stockholder has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(v) Absence of Further Requirements. Except for the registration
of the Securities under the 1933 Act and such consents, approvals,
authorizations, registrations, filings or qualifications as may be
required under the 1934 Act and applicable state securities laws in
connection with the purchase and distribution of the Securities by the
Underwriters, no filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or
required for the performance by the Selling Stockholder of its
obligations hereunder or in connection with the sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, including the exercise of the Warrants
contemplated hereby.
(vi) Exercise of Warrants. Each Selling Stockholder hereby
covenants and agrees with the Underwriters to take all actions
necessary to exercise its Warrants as soon as practicable after the
date hereof with respect to the Securities to be sold by such Selling
Stockholder to the Underwriters hereunder, including the delivery of an
"election to exercise" form together with the applicable exercise price
in accordance with the terms of the Warrants and as described in the
Prospectus.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Stockholder as such and
delivered to the Underwriters or to counsel for the Underwriters pursuant to the
terms of this Agreement shall be deemed a representation and warranty by the
Selling Stockholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, each
Selling Stockholder, severally and not jointly, agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from each Selling Stockholder, at the price per
share set forth in Schedule 3, that proportion of the number of Securities set
forth in Schedule 2 opposite the name of the Selling Stockholder which the
number of Securities set forth in Schedule 1 opposite the name of such
Underwriter, plus any additional number of Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof,
bears to the total number of Securities, subject, in each case, to such
adjustments among the Underwriters as the Underwriters in their sole discretion
shall make to eliminate any sales or purchases of fractional securities.
(b) [Intentionally omitted]
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the Underwriters and the Company and the Selling Stockholders, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Underwriters and the Company and the Selling Stockholders (such time and date of
payment and delivery being herein called "Closing Time").
Payment shall be made to the Selling Stockholders by wire transfer of
immediately available funds to bank accounts designated by the Selling
Stockholders against delivery through the facilities of The Depository Trust
Company to the Underwriters for the respective accounts of the several
Underwriters of certificates for the Securities to be purchased by them.
(d) Denominations; Registration. Certificates for the Securities shall
be in such denominations and registered in such names as the Underwriters may
request in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Underwriters in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter
as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b) hereof, will comply with the requirements of
Rules 415 and 424 of the 1933 Act Regulations and will notify the Underwriters
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or any document incorporated by reference
therein or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any prospectus, or
of the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. During the period in which a Prospectus is
required by the 1933 Act to be delivered in connection with the sale of the
Securities (the "Prospectus Delivery Period"), the Company will give the
Underwriters notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Underwriters with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. The Company will furnish to
each Underwriter, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to each of the
Underwriters, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to each
Underwriter, without charge, during the Prospectus Delivery Period, such number
of copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time during
the Prospectus Delivery Period, any event shall occur or condition shall exist
as a result of which it is necessary, in the reasonable opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use commercially
reasonable efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the Underwriters may
designate and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Listing. The Company will use its best efforts to maintain the
quotation of the Securities on the New York Stock Exchange.
(i) [Intentionally Omitted]
(j) Reporting Requirements. The Company, during the Prospectus Delivery
Period, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Selling Stockholders will pay (pro-rata based on the
number of Securities sold hereunder by each Selling Stockholder) all expenses
incident to the performance by the Company of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated by reference therein, all as provided in this Agreement, (iii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, or delivery of the Securities,
(iv) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, (v) the fees and disbursements of the Company's
counsel, the Selling Stockholder's counsel, accountants and other advisors, (vi)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vii) the printing and delivery to the Underwriters of copies of the
Prospectus and any amendments or supplements thereto, (viii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (ix) the fees and expenses of any transfer agent or
registrar for the Securities, (x) any stamp duties, capital duties and stock
transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters and (xi) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities, if applicable.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5(t) or Section
9(a)(i) hereof, the Selling Stockholders shall reimburse (pro-rata based on the
number of Securities sold hereunder by each Selling Stockholder) the
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters, incurred in
connection with the transactions contemplated by this Agreement.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or on behalf of the Selling Stockholders
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder and the performance by each of
the Selling Stockholders of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective, and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A Prospectus
Supplement containing information relating to the description of the Securities,
the specific method of distribution and similar matters shall have been filed
with the Commission in accordance with Rule 424(b).
(b) No Material Misstatement or Omission. No Underwriter shall have
discovered and disclosed to the Company on or prior to the Closing Time, that
the Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact, which in the opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel for the
Underwriters, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) Corporate Proceedings. All corporate proceedings and other legal
matters incident to the authorization, form and validity of this Agreement, the
Securities, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholders shall have furnished
to such counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇
▇▇▇▇ LLP, counsel for the Company, to the effect set forth in Exhibit A hereto.
(e) Opinion of Senniger, Powers, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Senniger, Powers, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, to the effect
set forth in Exhibit B hereto.
(f) Opinion of Abe, Ikubo & Katayama. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Abe,
Ikubo & Katayama, special counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit
C hereto.
(g) Opinion of Hwang Mok Park P.C. At Closing Time, the Underwriters shall have
received the favorable opinion, dated as of Closing Time, of Hwang Mok Park
P.C., special counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect set forth in Exhibit D hereto.
(h) Opinion of Studio Legale Tosato. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Studio
Legale Tosato, special counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit
E hereto.
(i) Opinions of Counsel for the Selling Stockholders. At Closing Time,
the Underwriters shall have received the favorable opinions, dated as of Closing
Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for certain of the
Selling Stockholders, of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for certain of the
Selling Stockholders, and of O'Melveny ▇▇▇▇▇ LLP, counsel for certain of the
Selling Stockholders, each to the effect set forth in Exhibit F hereto.
(j) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel for
the Underwriters, with respect to the Registration Statement, the Prospectus and
other related matters as the Underwriters may reasonably require. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Underwriters. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
its Subsidiaries and certificates of public officials.
(k) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(l) Certificate of Selling Stockholders. At Closing Time, the
Underwriters shall have received a certificate of an Attorney-in-Fact on behalf
of each Selling Stockholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of the Selling Stockholders contained in
Section 1(b) hereof are true and correct in all material respects with the same
force and effect as though expressly made at and as of Closing Time and (ii) the
Selling Stockholder has complied in all material respects with all agreements to
be performed under this Agreement, including its obligations to fulfill its
conditions set forth in Section 5 hereof, at or prior to Closing Time.
(m) Accountant's Comfort Letter. The Underwriters shall have received
from KPMG LLP a letter dated as of the date hereof, in form and substance
previously agreed to by the Underwriters, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(n) Bring-down Comfort Letter. At Closing Time, the Underwriters shall have
received from KPMG LLP a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(m) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.
(o) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements or such confirmation shall not be required under
applicable NASD rules.
(p) Lock-up Agreements. At the date of this Agreement, the Underwriters
shall have received an agreement substantially in the form of Exhibit G hereto
signed by each of the Selling Stockholders.
(q) [Intentionally omitted]
(r) No Material Adverse Change. Neither the Company nor any of its
Subsidiaries shall have sustained since the date of the latest financial
statements included or incorporated by reference in the Prospectus (i) any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any of its
Subsidiaries or any change, or any development that could reasonably be expected
to result in a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its Subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is or would be, in the judgment of the Underwriters, so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being delivered at the relevant
Closing Time on the terms and in the manner contemplated in the Prospectus.
(s) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and the
Selling Stockholders in connection with the sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(t) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to the Company and the
Selling Stockholders at any time at or prior to Closing Time and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its directors, officers and employees and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage, expense or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Securities), as incurred,
arising out of (A) any untrue statement or alleged untrue statement of
a material fact contained (x) in the Registration Statement, Prospectus
Supplement, or the Prospectus (or any amendment or supplement thereto),
or (y) in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of
the offering of the Securities, including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically) ("Marketing Materials"), (B) the omission or alleged
omission in the Registration Statement, Prospectus Supplement, or the
Prospectus (or any amendment or supplement thereto), or in any
Marketing Materials of a material fact required to be stated therein or
necessary to make the statements therein not misleading, in the light
of the circumstances under which they were made, not misleading, or (C)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (A) or
(B) above (provided that the Company shall not be liable under this
clause (C) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its
gross negligence or willful misconduct);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company and the Selling Stockholders;
and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇ Brothers or ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), Prospectus Supplement or the
Prospectus (or any amendment or supplement thereto), which information consists
solely of the information specified in Section 6(e) hereof. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or any officer, employee or controlling person
of that Underwriter.
(b) Indemnification of Underwriters by the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, agrees to indemnify and hold
harmless each Underwriter, its directors, officers and employees and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage, expense or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Securities), as incurred, arising out
of (1) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, Prospectus Supplement, or the
Prospectus (or any amendment or supplement thereto), or (2) the omission or
alleged omission in the Registration Statement, Prospectus Supplement, or the
Prospectus (or any amendment or supplement thereto), of a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in the light of the circumstances under which they were made, in the case of
subparagraphs (1) and (2) of this Section 6(b) to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon or in conformity with written
information furnished to the Company or such Underwriter by such Selling
Stockholder directly or through the Selling Stockholder's representatives,
specifically for use in the preparation thereof; and shall reimburse each
Underwriter, its directors, officers and employees or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that such Selling Stockholder shall not be liable in any such
case to the extent that any such loss, liability, claim, damage or expense
arises out of, or is based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through ▇▇▇▇▇▇
Brothers or ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement,
Prospectus Supplement, or the Prospectus (or in any amendment or supplement
thereto), which information consists solely of the information specified in
Section 6(e) hereof. However, in no event shall a Selling Stockholder be liable
under the provisions of this Section 6 for any amount in excess of the total
proceeds received by such Selling Stockholder from the sale of the Securities by
the Selling Stockholder (after deducting commissions, but before taxes and any
other expenses) pursuant to this Agreement. The foregoing indemnity agreement is
in addition to any liability which the Selling Stockholder may otherwise have to
any Underwriter or any officer, employee or controlling person of that
Underwriter.
(c) Indemnification of Company, Directors and Officers and Selling
Stockholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Stockholder and each person, if any, who controls the Selling Stockholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsections (a) and (b) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), Prospectus Supplement, or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through ▇▇▇▇▇▇ Brothers or ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment
thereto), Prospectus Supplement, the Prospectus (or any amendment or supplement
thereto), which information consists solely of the information specified in
Section 6(e) hereof. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or the Selling
Stockholders or any officer, employee or controlling person of the Company or
the Selling Stockholders.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Sections 6(a) and (b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇ Brothers
and ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the Company
or the Selling Stockholders, as the case may be. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties (which consent will
not be unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(e) Information Furnished by Underwriters. The Underwriters confirm and
the Company and the Selling Stockholders acknowledge that the statements with
respect to the public offering of the Securities by the Underwriters set forth
on the cover page of, the name of the Underwriters and its participation in the
sale of Securities under the caption "Underwriting" in, the paragraphs
addressing the underwriting discount, concessions and reallowances,
stabilization, short positions and penalty bids appearing under the caption
"Underwriting" in, and the paragraphs under the heading "Relationships"
appearing under the caption "Underwriting" in the Prospectus constitute the only
information concerning the Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
(f) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(g) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement between the Company and the Selling
Stockholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Selling
Stockholders on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Selling Stockholders on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Selling Stockholders and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Selling Stockholders shall not be required to contribute any amount
in excess of the total proceeds received by the Selling Stockholders from the
offering of the Securities by the Selling Stockholders (after deducting
commissions, but before taxes and other expenses).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or a
Selling Stockholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Stockholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Securities set forth opposite their respective names in
Schedule 1 hereto and not joint.
The provisions of this Section shall not affect any agreement between
the Company and the Selling Stockholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its Subsidiaries or the
Selling Stockholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholders, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company and the Selling Stockholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus (exclusive of any amendment or supplement thereto), any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or in the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, including, without
limitation, as a result of terrorist activities, in each case the effect of
which is such as to make it, in the judgment of the Underwriters, impracticable
or inadvisable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or
they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Underwriters shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriters or the Selling Stockholders shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by a Selling Stockholder. If a Selling Stockholder shall
fail at Closing Time to sell and deliver the number of Securities which such
Selling Stockholder is obligated to sell hereunder, and the remaining Selling
Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Stockholders as set forth in Schedule 2 hereto,
then the Underwriters may, at the option of the Underwriters, by notice from the
Underwriters to the Company and the Selling Stockholders, either (i) terminate
this Agreement without any liability on the fault of any non-defaulting party
except that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full
force and effect or (ii) elect to purchase the Securities which the
non-defaulting Selling Stockholders have agreed to sell hereunder. No action
taken pursuant to this Section 11 shall relieve the Selling Stockholder so
defaulting from liability, if any, in respect of such default.
In the event of a default by a Selling Stockholder as referred to in
this Section 11, each of the Underwriters and the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention of Syndicate Registration Department (Fax: (▇▇▇) ▇▇▇-▇▇▇▇), with a
copy, in the case of any notice pursuant to Section 6(c), to the Director of
Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇), and at ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇▇; notices to the Company shall be directed
to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (City of ▇'▇▇▇▇▇▇), ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇ ▇▇▇▇▇▇ - (Fax: (▇▇▇) ▇▇▇-▇▇▇▇); and notices to the Selling
Stockholders shall be directed to TPG Wafer Holdings LLC, c/o Texas Pacific
Group, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax: (817)
▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
SECTION 13. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 14. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters, the Company and the Selling Stockholders and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Stockholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 15. No Advisory or Fiduciary Relationship. The Company and each Selling
Stockholder acknowledges and agrees that (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the public
offering price of the Securities and any related discounts and commissions, is
an arms-length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the several Underwriters, on the other hand,
(ii) in connection with the offering contemplated hereby and the process leading
to such transaction each Underwriter is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, any Selling
Stockholder or their respective stockholders, creditors, employees or any other
party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company or any Selling Stockholder with respect
to the offering contemplated hereby or the process leading thereto (irrespective
of whether such Underwriter has advised or is currently advising the Company or
any such Selling Stockholder on other matters) and no Underwriter has any
obligation to the Company or any Selling Stockholder with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company or any Selling Stockholder, and (v) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company and each Selling Stockholder has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
SECTION 16. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 17. Effect of Headings
. The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement by
and among the Underwriters, the Selling Stockholders and the Company in
accordance with its terms.
Very truly yours,
MEMC ELECTRONIC MATERIALS, INC.
By /s/▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
TPG WAFER HOLDINGS LLC
By: TPG WAFER PARTNERS LLC,
its managing member
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TPG WAFER MANAGEMENT LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TPG WAFER PARTNERS LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
GREEN EQUITY INVESTORS III, L.P.
By: GEI Capital III, LLC
its general partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Manager
GREEN EQUITY INVESTORS SIDE III, L.P.
By: GEI Capital III, LLC
its general partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Manager
TCW/CRESCENT MEZZANINE PARTNERS III, L.P.
TCW/CRESCENT MEZZANINE TRUST III
TCW/CRESCENT MEZZANINE
PARTNERS III NETHERLANDS, L.P.
By: TCW/Crescent Mezzanine III, LLC,
its investment manager
By: TCW Asset Management Company,
its Sub-Adviser
By: /s/ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Title: President
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: ▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
SCHEDULE 1
Number of
Name of Underwriters Securities
-------------------- ----------
▇▇▇▇▇▇ Brothers Incorporated 9,125,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated 9,125,000
-------------------
Total 18,250,000
-------------------
SCHEDULE 2
Number of
Securities to be Sold
---------------------
TPG Wafer Holdings LLC.................................. 8,250,000
TPG Wafer Partners LLC.................................. 5,910,000
TPG Wafer Management LLC................................ 150,000
Green Equity Investors III, L.P......................... 1,955,323
Green Equity Investors Side III, L.P.................... 14,677
TCW/Crescent Mezzanine Partners......................... 1,646,265
TCW/Crescent Mezzanine Trust III........................ 256,474
TCW/Crescent Mezzanine Partners III Netherlands, L.P.... 67,261
-------------
18,250,000
=============
SCHEDULE 3
MEMC ELECTRONIC MATERIALS, INC.
18,250,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $17.09.
SCHEDULE 4
List of Subsidiaries
MEMC Electronic Materials (UK) Ltd.
MEMC Electronic Materials France Sarl
MEMC Electronic Materials Sales, Sdn. Bhd.
MEMC Electronic Materials, GmbH
MEMC Electronic Materials, S.p.A.
MEMC Electronic Materials, Sdn. Bhd.
MEMC Holding B.V.
MEMC Holdings Corporation
MEMC International, Inc.
MEMC Japan Ltd.
MEMC Korea Company
MEMC Kulim Electronic Materials, Sdn. Bhd.
MEMC Pasadena, Inc.
MEMC Southwest Inc.
PlasmaSil, LLC
SiBond, LLC
Taisil Electronic Materials Corporation
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
[▇▇▇▇▇ ▇▇▇▇ Opinion to be attached]
Exhibit B
FORM OF OPINION OF SENNIGER, POWERS, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 5(e)
[Senniger Powers Opinion to be attached]
Exhibit C
FORM OF OPINION OF ABE, IKUBO & KATAYAMA
TO BE DELIVERED PURSUANT TO SECTION 5(f)
MEMC Japan (a) has been duly incorporated and is validly existing as a limited
liability company (Kabushiki Kaisha) under the Commercial Code of Japan, (b) has
corporate or organizational power and authority to own, lease and operate its
properties and to conduct its business as presently conducted under the laws of
Japan and (c) 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 where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
All of the issued and outstanding capital stock of MEMC Japan has been duly
authorized and validly issued and is fully paid and non-assessable. To our
knowledge, all of the issued and outstanding capital stock of MEMC Japan is
owned by the Company.
For purposes of this opinion, a "Material Adverse Effect" means a material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospectus of MEMC Japan.
Exhibit D
FORM OF OPINION OF HWANG MOK PARK P.C.
TO BE DELIVERED PURSUANT TO SECTION 5(g)
1. The Company is a joint stock corporation (chusik hoesa) duly
incorporated and validly existing in good standing under the laws of Korea;
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as presently conducted;
3. To the best of our knowledge after due inquiry, the Company is
duly qualified as a joint stock corporation (chusik hoesa) to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect. For the purpose of this
opinion, a "Material Adverse Effect" means a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company; and
4. All of the issued and outstanding capital stock of the Company has
been duly authorized and validly issued and is fully paid and non-assessable. To
our knowledge, forty percent (40%) of the issued and outstanding capital stock
of the Company is owned by MEMC International, Inc. and another forty percent
(40%) of the issued and outstanding capital stock of the Company is owned by
MEMC Holding B.V.
Exhibit E
FORM OF OPINION OF STUDIO LEGALE TOSATO
TO BE DELIVERED PURSUANT TO SECTION 5(h)
MEMC Electronic Materials, S.p.A. (a) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Italy, (b) has
corporate or organizational power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and (c) is duly
qualified to transact business and is in good standing in each jurisdiction
where it owns or leases property or otherwise conducts business, except where
the failure to so qualify or be in good standing would not result in a Material
Adverse Effect. All of the issued and outstanding capital stock of MEMC
Electronic Materials, S.p.A. has been duly authorized and validly issued and is
fully paid and non-assessable. To our knowledge, all of the issued and
outstanding capital stock of MEMC Electronic Materials, S.p.A. is owned by MEMC
Electronic Materials, Inc. To our knowledge, 100% of the issued and outstanding
capital stock of MEMC Holding B.V. is owned by MEMC Electronic Materials, S.p.A.
The issued and outstanding capital stock of MEMC Holding B.V. that is owned by
MEMC Electronic Materials, S.p.A. is, to our knowledge, owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance or other claim.
For purposes of this opinion, a "Material Adverse Effect" means a material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of MEMC Electronic Materials, S.p.A.
Exhibit F
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(j)
[to be attached]
Exhibit G
Lock-Up Agreement
LOCK-UP LETTER AGREEMENT
August ___, 2005
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
World Financial Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") providing for the purchase
by you (the "Underwriters") of shares (the "Shares") of Common Stock, par value
$.01 per share (the "Common Stock"), of MEMC Electronic Materials, Inc., a
Delaware corporation (the "Company"), held by the undersigned and a certain
other stockholders of the Company (the "Selling Stockholders"), and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, the
undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge,
or otherwise dispose of (or enter into any transaction or device that is
designed to, or could reasonably be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock (including,
without limitation, shares of Common Stock that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock (other than the Shares) owned by the undersigned
on the date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, for a period of ninety
(90) days after the date of the final Prospectus Supplement relating to the
Offering.
The foregoing sentence shall not apply to bona fide gifts, sales or
other dispositions of shares of any class of the Company's capital stock, in
each case that are made exclusively between and among the undersigned or members
of the undersigned's family, or affiliates of the undersigned, including its
partners (if a partnership) or members (if a limited liability company);
provided that it shall be a condition to any such transfer that (i) the
transferee/donee agrees to be bound by the terms of the lock-up letter agreement
(including, without limitation, the restrictions set forth in the preceding
sentence) to the same extent as if the transferee/donee were a party hereto,
(ii) no filing by any party (donor, donee, transferor or transferee) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be
required or shall be voluntarily made in connection with such transfer or
distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or
13D-A or 13G-A) made after the expiration of the ninety (90)-day period referred
to above), (iii) each party (donor, donee, transferor or transferee) shall not
be required by law (including without limitation the disclosure requirements of
the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall
agree to not voluntarily make, any public announcement of the transfer or
disposition, and (iv) the undersigned notifies ▇▇▇▇▇▇ Brothers' Equity Capital
Markets and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Equity Capital Markets at least two business days
prior to the proposed transfer or disposition.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective before August 31, 2005, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Shares, the undersigned will
be released from its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company, the other Selling
Stockholders and the Underwriters will proceed with the Offering in reliance on
this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company, the Selling Stockholders and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents reasonably
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
----------------------------------
(name of stockholder)
By:
-----------------------------
Name:
Title:
Dated: August ___, 2005
