EXHIBIT 1.1
1,600,000 Shares
ZYGO CORPORATION
Common Stock
($.10 Par Value)
UNDERWRITING AGREEMENT
December __, 1995
ALEX. XXXXX & SONS INCORPORATED
XXXXXXX & COMPANY, INC.
UNTERBERG HARRIS
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Zygo Corporation, a Delaware corporation (the "Company"), and certain
stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose to sell to the several underwriters (the "Underwriters")
named in Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 1,600,000 shares of the Company's Common
Stock, $.10 par value (the "Firm Shares") of which 845,000 shares will be sold
by the Company and 755,000 shares will be sold by the Selling Stockholders. The
respective amounts of the Firm Shares to be so purchased by the several
Underwriters are set forth opposite their names in Schedule I hereto, and the
respective amounts to be sold by the Selling Stockholders are set forth opposite
their names in Schedule II hereto. The Company and the Selling Stockholders are
sometimes referred to herein collectively as the "Sellers". The Company also
proposes to sell at the Underwriters' option an aggregate of up to 240,000
additional shares of the Company's Common Stock (the "Option Shares") as set
forth below.
As the Representatives, you have advised the Company and the Selling
Stockholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the
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numbers of Firm Shares set forth opposite their respective names in Schedule I,
plus their pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the "Shares".
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-3 (File No. 33-63775) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") promulgated
thereunder and has been filed with the Commission under the Act. The
Company has complied with the conditions for the use of Form S-3. Copies of
such registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of Rule 430A of the
Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore
been delivered by the Company to you. Such registration statement, herein
referred to as the "Registration Statement", which shall be deemed to
include all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, has been declared effective
by the Commission under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement. The
term "Prospectus" means the form of prospectus first filed by the Company
with the Commission pursuant to its Rule 424(b) and Rule 430A or, if the
Company relies on Rule 434 of the Rules and Regulations, the "Term Sheet"
relating to the Shares together with the preliminary prospectus that such
Term Sheet supplements. "Term Sheet" means any term sheet that satisfies
the requirements of Rule 434. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus". Any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be, and, in the
case of any reference herein to any Prospectus, also shall be deemed to
include any documents incorporated by reference therein, and any
supplements or amendments thereto, filed with the Commission after the date
of filing of the Prospectus under Rules 424(b) and 430A, and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Registration Statement; Zygo International
Corporation and Zygo Credit Corporation, each a Delaware
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corporation, (the "Subsidiaries"), have been duly organized and are validly
existing as corporations in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease their
respective properties and conduct their business as presently conducted;
the Company and the Subsidiaries are duly qualified to transact business in
all jurisdictions in which the conduct of their business requires such
qualification, except where the failure to be so qualified does not have a
material adverse effect on the Company and the Subsidiaries taken as a
whole; other than the Subsidiaries, the Company has no material
subsidiaries; the outstanding shares of capital stock of the Subsidiary
have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all liens,
encumbrances and security interests; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests in the Subsidiary are outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Stockholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the
portion of the Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein will be
validly issued, fully-paid and non-assessable; and no preemptive rights of
Stockholders exist under Delaware law or in the Company's Certificate of
Incorporation or Bylaws or in any other agreement to which the Company is a
party or of which the Company is aware with respect to any of the Shares or
the issue and sale thereof. Neither the filing of the Registration
Statement nor the offering or sale of the Shares contemplated by this
Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common
Stock.
(iv) The Shares conform with the statements concerning them in the
Registration Statement. The certificates, if any, representing the Shares
are genuine, and the Company has no knowledge of any fact that would impair
the validity thereof.
(v) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus relating to the proposed offering of
the Shares nor instituted proceedings for that purpose and each Preliminary
Prospectus, at the time of filing thereof, did not contain any untrue
statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading. The Registration
Statement contains and the Prospectus and any amendments or supplements
thereto will contain all statements which are required to be stated therein
by, and in all respects conform or will conform, as the case may be, to the
requirements of, the Act and the Rules and Regulations. The documents
incorporated by reference in the Prospectus, at the time filed with the
Commission or as subsequently amended in a filing with the Commission,
conformed or will conform in all respects to the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the
Act, as applicable, and the Rules and Regulations of the Commission
thereunder. Neither the Registration Statement nor any amendment thereto,
and neither the Prospectus nor any supplement thereto, contains or will
contain, as the case may be, any untrue statement of a
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material fact or omits or will omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of any Underwriter through the Representatives, specifically for use
in the preparation thereof.
(vi) The consolidated financial statements of the Company and one of
the Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations of the Company and such
Subsidiary consolidated, at the indicated dates and for the indicated
periods. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, and all adjustments necessary for a fair presentation
of results for such periods have been made. The selected and summary
financial and statistical data included or incorporated by reference in the
Registration Statement presents fairly the information shown therein and
have been compiled on a basis consistent with the financial statements
presented therein.
(vii) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or the
Subsidiaries before any court or administrative agency or otherwise which
might result in any material adverse change in the business, properties,
assets, rights, operations or condition (financial or otherwise) or
prospects of the Company and of the Subsidiaries taken as a whole or to
prevent the consummation of the transactions contemplated hereby, except as
set forth in the Registration Statement.
(viii) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements
hereinabove described (or as described in the Registration Statement),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount. The Company
and the Subsidiaries occupy their leased properties under valid and binding
leases conforming, to the extent described in the Registration Statement,
in all material respects to such description.
(ix) The Company and the Subsidiaries have filed all Federal, State
and foreign income tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received
by them or any of them to the extent that such taxes have become due and
are not being contested in good faith. All federal and state tax
liabilities are adequately provided for on the books of the Company and
properly reflected in the Company's financial statements.
(x) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or
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affecting the condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole or the earnings, business affairs,
management, properties, assets, rights, operations, condition (financial or
otherwise), or business prospects of the Company and its Subsidiaries taken
as a whole, whether or not occurring in the ordinary course of business,
and there has not been any material transaction entered into by the Company
or the Subsidiaries, other than transactions in the ordinary course of
business and changes and transactions contemplated by the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations which are not
disclosed in the Registration Statement, as it may be amended or
supplemented.
(xi) Neither the Company nor any Subsidiary is, or with the giving of
notice, lapse of time or both, will be, in violation of or in default under
its Certificate of Incorporation or Bylaws or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it or any of its properties is bound and which default is
of material significance in respect of the business or financial condition
of the Company and the Subsidiaries taken as a whole. The consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, (i) any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or any
Subsidiary is a party and which conflict, breach or default is of material
significance in respect of the business or financial condition of the
Company and the Subsidiaries taken as a whole, or (ii) the Certificate of
Incorporation or Bylaws of the Company or any order, rule or regulation
applicable to the Company or the Subsidiary of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction.
(xii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under State securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(xiii) The Company and the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary
to the conduct of their businesses, except where the failure to hold such
item would not have a material adverse effect on the Company; and neither
the Company nor any of the Subsidiaries has infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement is
material to the businesses of the Company and the Subsidiaries taken as a
whole.
(xiv) KPMG Peat Marwick LLP, who have certified certain of the
financial statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
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(xv) The Common Stock of the Company is designated on the NASD
Automated Quotations National Market ("NASDAQ NMS").
(xvi) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors, or 5% or greater security holders, except as set forth
in the Registration Statement or as otherwise disclosed in writing to the
Representatives.
(xvii) Neither the Company, nor to the Company's knowledge, any of its
affiliates, has taken, directly or indirectly, any action designed to cause
or result in, or which has constituted or which might reasonably be
designed to constitute, the stabilization or manipulation of the price of
the shares of Common Stock to facilitate the sale or resale of the Shares.
(xviii) With respect to each patent issued to or each patent
application owned by the Company or any of its subsidiaries, as the case
may be:
1. to the best knowledge of the Company or such subsidiary, as
the case may be, all material prior art and other material information
were accurately disclosed in each patent application;
2. no knowing misrepresentation of material fact was made, and no
knowing concealment of any material fact occurred in the prosecution
of any such patent application;
3. neither the Company nor any such subsidiary, as the case may
be, is aware of any information which would compel a court to hold
that any of the Company's or such subsidiary's issued patents or
allowed claims are invalid or unenforceable.
(xix) There are no inter partes proceedings now pending, or, to the
Company's knowledge, threatened, to which the Company or any of its
subsidiaries could be a party, before the United States Patent and
Trademark Office or before comparable governmental bodies in foreign
countries, which, if determined adversely to the Company's interest, would
have a material adverse effect on the consolidated financial position,
shareholders' equity, or results of operations of the Company, or on the
properties and business prospects of the Company and its subsidiaries taken
as a whole.
(b) Each of the Selling Stockholders, severally and not jointly, represents
and warrants as follows:
(i) Such Selling Stockholder now has and at the Closing Date (as
hereinafter described) will have good and marketable title to the Firm
Shares to be sold by such Selling Stockholder, free of any liens,
encumbrances, equities and claims, and full right, power and authority to
effect the sale and delivery of such Firm Shares; and upon the delivery of
and payment for such Firm Shares pursuant
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to this Agreement, the Underwriters will acquire good and marketable
title thereto, free of any liens, encumbrances, equities and claims.
(ii) Such Selling Stockholder has full right, power and authority to
execute and deliver this Agreement and the Custody Agreement and Power of
Attorney referred to in Section 2 below (the "Custody Agreement"), and to
perform its obligations under such agreements. The consummation by such
Selling Stockholder of the transactions herein contemplated and the
fulfillment by such Selling Stockholder of the terms hereof will not result
in a breach of any of the terms and provisions of, or constitute a default
under, in the case of corporate Selling Stockholders only, any material
indenture, mortgage, deed of trust or other agreement or instrument to
which such Selling Stockholder is a party and which would constitute a
material impediment on the obligations of the Selling Stockholder hereunder
and under the Custody Agreement, or, in the case of all Selling
Stockholders, of any order, rule or regulation applicable to such Selling
Stockholder of any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction.
(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock of the Company.
(iv) The Selling Stockholder agrees not to offer, sell, or contract to
sell, sell short, or otherwise dispose of, directly or indirectly, any
shares of Common Stock beneficially owned by the Selling Stockholder or any
securities convertible into, or exchangeable or exercisable for, or
derivative of, shares of Common Stock for a period of 90 days after the
date of the Prospectus except with the prior written consent of Alex. Xxxxx
& Sons Incorporated and, in the case of Xx. Xxxx X. Xxxxxx and Xx. Xxxx X.
Xxxxxx only, except that each such Selling Stockholder may exercise
employee stock options to purchase up to 3,750 shares of Common Stock and
may sell any or all such 3,750 shares of Common Stock during such 90 day
period.
(v) The Custody Agreement appointing certain individuals as such
Selling Stockholders' attorney-in-fact to the extent set forth therein has
been duly executed and delivered by such Selling Stockholder and is the
valid and binding agreement of such Selling Stockholder.
(vi) Without having undertaken any independent investigation of the
accuracy or completeness of either the representations and warranties of
the Company contained herein or the information contained in the
Registration Statement and documents incorporated by reference therein,
such Selling Stockholder has no actual knowledge that the representations
and warranties of the
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Company contained in this Section 1 are not true and correct in all
material respects; and the sale of the Firm Shares by such Selling
Stockholder pursuant hereto is not prompted by any information concerning
the Company or the Subsidiary which is not set forth in the Registration
Statement or the documents incorporated by reference therein. The
information pertaining to such Selling Stockholder under the caption
"Principal and Selling Stockholders" in the Prospectus is complete and
accurate in all material respects.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
and the Interest and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, each of the Selling Stockholders agrees to
deliver to you prior to or at the Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
2. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Sellers agree to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$_____ per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by each Seller as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder. The obligations of the Company and of each of the
Selling Stockholders shall be several and not joint.
Certificates in negotiable form for the total number of the Shares to be
sold hereunder by the Selling Stockholders have been placed in custody with the
Company as custodian (in such capacity only, the "Custodian") pursuant to the
Custody Agreement executed by each Selling Stockholder for delivery of all Firm
Shares to be sold hereunder by the Selling Stockholders. Each of the Selling
Stockholders specifically agrees that the Firm Shares represented by the
certificates held in custody for the Selling Stockholders under the Custody
Agreement are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminable by any act or deed of the Selling Stockholders
(or by any other person, firm or corporation including the Company, the
Custodian or the Underwriters) or by operation of law (including the death of an
individual Selling Stockholder or the dissolution of a corporate Selling
Stockholder) or by the occurrence of any other event or events, except as set
forth in the Custody Agreement. If any such event should occur prior to the
delivery to the Underwriters of the Firm Shares hereunder, certificates for the
Firm Shares shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such event has not occurred. The Custodian is
authorized to receive and acknowledge receipt of the proceeds of sale of the
Shares held by it against delivery of such Shares.
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Payment for the Firm Shares to be sold hereunder is to be made in New York
Clearing House funds by certified or bank cashier's checks drawn to the order of
the Company for the Shares to be sold by it and to the order of "Zygo
Corporation, as Custodian for Zygo Corporation Selling Stockholders" for the
Shares to be sold by the Selling Stockholders, in each case against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of Alex.
Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, at
10:00 A.M., Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five business days
thereafter as you and the Company shall agree upon, such time and date being
herein referred to as the "Closing Date." (As used herein, "business day" means
a day on which the New York Stock Exchange is open for trading and on which
banks in New York are open for business and not permitted by law or executive
order to be closed.) The certificates for the Firm Shares will be delivered in
such denominations and in such registrations as the Representatives request in
writing not later than the second full business day prior to the Closing Date,
and will be made available for inspection by the Representatives at least one
business day prior to the Closing Date.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase the Option
Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part but
only once and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representatives of the several Underwriters,
to the Company setting forth the number of Option Shares as to which the several
Underwriters are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which certificates for
Option Shares are to be delivered shall be determined by the Representatives but
shall not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the "Option Closing Date"). If the date of
exercise of the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Shares being purchased as the number of
Firm Shares being purchased by such Underwriter bears to the total number of
Firm Shares, adjusted by you in such manner as to avoid fractional shares. The
option with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the Underwriters.
You, as Representatives of the several Underwriters, may cancel such option at
any time prior to its expiration (but in no case after exercise, except as
provided in Section 11 hereof) by giving written notice of such cancellation to
the Company. To the extent, if any, that the option is exercised, payment for
the Option Shares shall be made on the Option Closing Date in New York Clearing
House funds by certified or bank cashier's check drawn to the order of the
Company against delivery of certificates therefor at the offices of Alex. Xxxxx
& Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
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3. Offering by the Underwriters. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time change the public offering
price and other selling terms; provided, however, in no event shall any such
changes alter the purchase price for the Shares to be acquired by the
Underwriters as provided for in Section 2 hereof. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company and the Selling Stockholders
(a) The Company covenants and agrees with the several Underwriters and the
Selling Stockholders that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedures in Rule
430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in the form approved by the Representatives containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, (B) not file any amendment to the Registration Statement or
supplement to the Prospectus or document incorporated by reference therein
of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Rules and
Regulations, and (C) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have
become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose,
and the Company will use its best efforts to prevent the issuance of any
such stop order preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives
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may reasonably have designated in writing and will make such applications,
file such documents and furnish such information as may be reasonably
required for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to
file such a consent. The Company will, from time to time, prepare and file
such statements, reports and other documents, as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, two signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies of
the exhibits filed therewith that may reasonably be requested), including
documents incorporated by reference therein, but without exhibits, and of
all amendments thereto, as the Representatives may reasonably request.
(v) The Company will comply, to the best of its ability, with the Act
and the Rules and Regulations and the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, so as to permit the
completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event shall
occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading, or, if it is necessary at any time to amend
or supplement the Prospectus to comply with any law, the Company promptly
will either (i) prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus, or
(ii) prepare and file with the Commission an appropriate filing under the
Exchange Act which shall be incorporated by reference in the Prospectus so
that the Prospectus as so amended or supplemented will not, in the light of
the circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise you in writing when such statement
has been so made available.
-11-
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its Stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements.
(viii) The Company agrees not to offer, sell, or contract to sell,
sell short, or otherwise dispose of, directly or indirectly, any shares of
its Common Stock or any securities convertible into, or exchangeable or
exercisable for, or derivative of, shares of its Common Stock, for a period
of 90 days after the date of the Prospectus, except with the prior written
consent of Alex. Xxxxx & Sons Incorporated and except that the Company may
issue, and grant options to purchase, shares under its options plans
existing on the date hereof and disclosed in the Prospectus.
(ix) The Company will use its best efforts to have the Shares
designated for trading on the NASDAQ NMS.
(x) The Company shall cause each executive officer and director of the
Company to furnish to you, on or prior to the date of this Agreement, a
letter or letters, in form and substance satisfactory to the Underwriters
confirming the agreement of each executive officer and director to the
lock-up restrictions contemplated by Section 1(b)(iv) hereof.
(xi) The Company shall apply the net proceeds of the sale of the
Shares as set forth in the Prospectus.
(xii) The Company shall not invest, or otherwise use the proceeds
received by the Company from the sale of the Shares to the Underwriters, in
such a manner as would require the Company or the Subsidiary to register as
an investment company under the Investment Company Act of 1940, as amended
(the "1940 Act").
(xiii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company or if required for
NASDAQ NMS designation, a registrar for its Common Shares.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company to facilitate the sale or resale of the
Shares.
(b) Each of the Selling Stockholders covenants and agrees with the several
Underwriters and the Company that:
-12-
(i) The Selling Stockholder agrees not to offer, sell, or contract to
sell, sell short, or otherwise dispose of, directly or indirectly, any
shares of Common Stock beneficially owned by the Selling Stockholder or any
securities convertible into, or exchangeable or exercisable for, or
derivative of, shares of Common Stock for a period of 90 days after the
date of the Prospectus except with the prior written consent of Alex. Xxxxx
& Sons Incorporated and, in the case of Xx. Xxxx X. Xxxxxx and Xx. Xxxx X.
Xxxxxx only, except that each such Selling Stockholder may exercise
employee stock options to purchase up to 3,750 shares of Common Stock and
may sell any or all such 3,750 shares of Common Stock during such 90 day
period.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act
of 1983 with respect to the transaction herein contemplated, each of the
Selling Stockholders agrees to deliver to you prior to or at the Closing
Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(iii) Such Selling Stockholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company to facilitate the sale or resale
of the Shares.
5. Costs and Expenses. The Company will pay all costs, expenses and fees
incident to the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company and the Selling Stockholders; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the Registration
Statement, Preliminary Prospectuses, the Prospectus, this Agreement, the
Agreement Among Underwriters, the Underwriters' Selling Memorandum, the
Underwriters' Questionnaire, the Invitation Letter, the Power of Attorney, the
Blue Sky Survey and any supplements or amendments thereto; the filing fees of
the Commission; the filing fees and expenses incident to securing any required
review by the NASD of the terms of the sale of the Shares; the listing fee of
the NASDAQ NMS; and the expenses, including the fees and disbursements of
counsel for the Underwriters, incurred in connection with the qualification of
the Shares under State securities or Blue Sky laws. To the extent, if at all,
that any of the Selling Stockholders engage special legal counsel to represent
them in connection with this offering, the fees and expenses of such counsel
shall be borne by such Selling Stockholder. Any transfer taxes imposed on the
sale of the Shares to the several Underwriters will be paid by the Company and
the Selling Stockholders pro rata. The Company and the Selling Stockholders
shall not, however, be required to pay for any of the Underwriters' expenses
(other than those related to qualification under State securities or Blue Sky
laws) except that, if this Agreement shall not be consummated because the
conditions in Section 7 hereof are not satisfied, or because this Agreement is
terminated by the Representatives pursuant to Section 6 hereof by reason of any
failure, refusal or inability on the part of the Company or the Selling
Stockholders to perform any undertaking or satisfy any condition of this
Agreement or to comply
-13-
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms is due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company and the Selling Stockholders shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. Conditions of Obligations of the Underwriters. The several obligations
of the Underwriters to purchase the Firm Shares on the Closing Date and the
Option Shares, if any, on the Option Closing Date are subject to the accuracy,
as of the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company and the Selling Stockholders
contained herein, and to the performance by the Company and the Selling
Stockholders of their covenants and obligations hereunder and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
request. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of
the Company or the Selling Stockholders, shall be contemplated by the
Commission.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Fulbright &
Xxxxxxxx L.L.P., counsel for the Company and the Selling Stockholders,
dated the Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the Subsidiary has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described in
the Prospectus; the Company and the Subsidiary are duly qualified to
transact business in all jurisdictions in which the conduct of their
business requires such qualification, or in which the failure to qualify
would have a materially adverse effect upon the business of the Company and
the Subsidiary taken as a whole; and the outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company; and, to the
best of such counsel's knowledge, the outstanding shares of capital stock
of the Subsidiary are owned free and
-14-
clear of all liens, encumbrances and security interests, and no options,
warrants or other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligations into any shares of capital
stock or of ownership interests in the Subsidiary are outstanding.
(ii) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus; the authorized
shares of its Common Stock have been duly authorized; the outstanding
shares of its Common Stock, including the Shares to be sold by the Selling
Stockholders, have been duly authorized and validly issued and are fully
paid and non-assessable; all of the Shares conform to the description
thereof contained in the Prospectus; the certificates for the Shares are in
due and proper form; the shares of Common Stock, including the Option
Shares, if any, to be sold by the Company pursuant to this Agreement have
been duly authorized and will be validly issued, fully paid and
non-assessable when issued and paid for as contemplated by this Agreement;
and no preemptive rights of stockholders exist with respect to any of the
Shares or the issue and sale thereof.
(iii) Except as described in or contemplated by the Prospectus
(including for purposes of this exception options and purchase rights
granted, or which could be granted pursuant to existing reservations, under
stock plans referred to in the notes to the financial statements included
in the Prospectus), to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital
stock of the Company and there are no outstanding or authorized options,
warrants or rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or exchangeable
into or evidencing the right to purchase or subscribe for any shares of
such stock; and except as described in the Prospectus, to the knowledge of
such counsel, there is no holder of any securities of the Company or any
other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Shares or the right to have any shares of Common
Stock or other securities of the Company included in the Registration
Statement or the right, as a result of the filing of the Registration
Statement, to require registration under the Act of any shares of Common
Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the Act
and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(v) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto and documents
incorporated by reference therein comply as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the applicable rules and regulations thereunder (except
that such counsel need express no opinion as to the financial statements,
schedules and other financial information included or incorporated by
reference therein).
-15-
(vi) The statements under the caption "Principal and Selling
Stockholders -- Material Relationships of Certain Selling Stockholders with
the Company" in the Prospectus, and the description of the Company's Common
Stock contained in its Registration Statement on Form 8-A filed with the
Commission on October 26, 1984 and incorporated by reference in the
Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly
and correctly present the information called for with respect to such
documents and matters.
(vii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in the
Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described
as required, and such contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized in all
material respects.
(viii) After due inquiry, such counsel knows of no material legal
proceedings pending or threatened against the Company or the Subsidiary
which might result in any material adverse change in the business or
financial condition of the Company, except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the consummation
of the transactions herein contemplated do not and will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, the Certificate of Incorporation or Bylaws of the Company,
or any agreement or instrument known to such counsel to which the Company
or any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries may be bound and, in the case of such agreements and
instruments, which conflict, breach or default if of material significance
in respect of the business or financial condition of the Company and the
Subsidiaries taken as a whole.
(x) This Agreement has been duly authorized, executed and delivered by
the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or as required by
State securities and Blue Sky laws as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the same.
(xii) The Company is not, and will not become as a result of the
consummation of the transactions contemplated by this Agreement and the
initial application of the net proceeds from the sale of the Shares as
contemplated by the Prospectus, required to register as an investment
company under the 1940 Act.
-16-
(xiii) This Agreement has been duly authorized, executed and delivered
on behalf of the Selling Stockholders.
(xiv) Each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need express no
opinion), to sell, assign, transfer and deliver the portion of the Shares
to be sold by such Selling Stockholder.
(xv) The Custody Agreement executed and delivered by each Selling
Stockholder is an irrevocable instrument that is valid, binding and
enforceable, in accordance with its terms.
(xvi) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by each Selling Stockholder on
the Closing Date, free and clear of all claims, liens, encumbrances and
security interests whatsoever.
In rendering such opinion Fulbright & Xxxxxxxx L.L.P. may rely as to
matters governed by the laws of states other than Delaware, New York or Federal
laws on local counsel in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv), (xv), and (xvi) on opinions of other counsel
representing the respective Selling Stockholders, provided that in each case
Fulbright & Xxxxxxxx L.L.P. shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. Furthermore, in
rendering an opinion as to matters set forth in subparagraphs (xiii), (xiv),
(xv), and (xvi) (xviii), Fulbright & Xxxxxxxx L.L.P. may rely, as to matters of
fact with respect to each Selling Stockholder, upon the representations of such
Selling Stockholder contained in this Agreement and the Custody Agreement of
such Selling Stockholder. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, or any amendment thereto, as of the time it became
effective under the Act as of the Closing Date or the Option Closing Date, as
the case may be, (ii) any of the documents incorporated by reference therein, as
of the date of effectiveness of the Registration Statement or, in the case of
documents incorporated by reference in the Prospectus after the date of
effectiveness of the Registration Statement, as of the respective dates when
such documents were filed with the Commission, or (iii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained or contain an untrue statement of a material fact, or omitted
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that such counsel need
express no view as to financial statements, schedules and other financial
information included or incorporated by reference therein or as to the matters
covered by the opinion of special intellectual property counsel referred to in
Section 6(c) of this Agreement). With respect to such statement, Fulbright &
Xxxxxxxx L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
-17-
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxx Xxxx, special
intellectual property counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters to the
effect that:
(i) The statements under the captions "Risk Factors -- Dependence on
Proprietary Technology," "Business -- Patents and Other Intellectual
Property Rights," "Business -- Zygo Strategy -- Maintain Enhanced
Leadership Through Innovative Technical Solutions" and "Business -- Legal
Proceedings", to the extent they constitute or relate to matters of United
States law, summaries of legal matters governed by United States law,
documents or proceedings governed by United States law, or legal
conclusions governed by United States law, are accurate and correct in all
material respects;
(ii) To the best of such counsel's knowledge, the Company or one of
its Subsidiaries, as the case may be, is the owner of all right, title and
interest to the patents and applications described in the prospectus, which
patents and applications are listed in an appendix to such opinion;
(iii) To the best of such counsel's knowledge, with respect to the
validity and enforceability of each patent and each patent application
owned by the Company or any of its subsidiaries, as the case may be (A) all
material prior art and other material information was accurately disclosed
in the pertinent patent application; (B) no knowing misrepresentation of
material fact was made, and no knowing concealment of any material fact
occurred, in the prosecution of any such patent application; and (C) such
counsel is not aware of any information which would compel a court to hold
that any issued patent or allowed claim is invalid or unenforceable; and
(iv) Other than as disclosed in the Prospectus, there are no inter
partes proceedings now pending or threatened, to which the Company or any
of its subsidiaries is a party, before the United States Patent or
Trademark Office or comparable governmental bodies in foreign countries, or
before any court, relating to or affecting the subject matter of the
Company's patents or patent applications.
(d) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv), (v), (x), (xiii) and (xvi) of Paragraph (b) of
this Section 6, and that the Company is a validly organized and existing
corporation under the laws of the State of Delaware. In rendering such opinion
Piper & Marbury L.L.P. may rely as to all matters governed other than by the
laws of the State of Maryland, State of New York, Delaware corporate or Federal
laws on the opinion of counsel referred to in paragraph (b) of this Section 6.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement, or any
amendment thereto, as of the time it became effective under the Act or as of the
Closing Date or the Option Closing Date, as
-18-
the case may be, (ii) any of the documents incorporated by reference
therein, as of the date of effectiveness of the Registration Statement or, in
the case of documents incorporated by reference in the Prospectus after the date
of effectiveness of the Registration Statement, as of the respective dates when
such documents were filed with the Commission, or (iii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained or contain an untrue statement of a material fact, or omitted
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that such counsel need
express no view as to financial statements, schedules and other financial
information included or incorporated by reference therein). With respect to such
statement, Piper & Marbury L.L.P. may state that their belief is based upon the
procedures set forth therein, but is without independent check and verification.
(e) The Representatives shall have received at or prior to the Closing
Date from Piper & Marbury L.L.P. a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the qualification for
offering and sale by the Underwriters of the Shares under the State securities
or Blue Sky laws of such jurisdictions as the Representatives may reasonably
have designated to the Company.
(f) The Representatives shall have received, on each of the dates hereof,
the Closing Date or the Option Closing Date, as the case may be, a letter dated
the date thereof of KPMG Peat Marwick L.L.P., confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and Prospectus.
(g) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
President and Chief Executive Officer and the Vice President, Finance &
Administration and Chief Financial Officer of the Company to the effect that, as
of the Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:
(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken or
are, to his knowledge, contemplated by the Commission.
(ii) Such officer does not know of any litigation instituted or
threatened against the Company of a character required to be disclosed in
the Registration Statement which is not so disclosed; such officer does not
know of any material contract required to
-19-
be filed as an exhibit to the Registration Statement which is not so filed;
and the representations and warranties of the Company contained in Section 1(a)
hereof are true and correct as of the Closing Date or the Option Closing Date,
as the case may be.
(iii) All filings required to have been made pursuant to Rules 424 or
430A under the Act have been made.
(iv) Such officer has carefully examined the Registration Statement
and the Prospectus and, in such officer's opinion, as of the effective date
of the Registration Statement, the statements contained in the Registration
Statement, including any document incorporated by reference therein, were
true and correct, and such Registration Statement and Prospectus or any
document incorporated by reference therein did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading and, in such officer's opinion, since the
effective date of the Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement or amendment.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole or the earnings, business
affairs, management or business prospects of the Company and the
subsidiaries taken as a whole, whether or not arising in the ordinary
course of business.
(h) The Company and the Selling Stockholders shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Representatives may reasonably have requested.
(i) The Firm Shares, and Option Shares, if any, have been approved for
listing upon official notice of issuance on the NASDAQ NMS.
(j) The Company shall have delivered to you written agreements (the "Lockup
Agreements") described in Section 4(a)(x).
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and
-20-
the Selling Stockholders of such termination in writing or by telegram at
or prior to the Closing Date or the Option Closing Date, as the case may be.
In such event, the Selling Stockholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Sellers. The obligations of the
Sellers to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. Indemnification
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the Act
against any losses, claims, damages or liabilities to which such Underwriter or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding and expenses reasonable incurred in responding
to a subpoena or governmental inquiry whether or not such underwriter or
controlling person is a party to any action or proceeding; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made or
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by or
through the Representatives specifically for use in the preparation thereof;
provided further, that the indemnity agreement contained in this Section with
respect to any Preliminary Prospectus will not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter) on account of any
loss, claim, damage, liability, action or proceeding arising out of or based
upon an untrue statement or alleged untrue statement of a material fact, or
omission or alleged omission of a material fact, made therein, with respect to
the sale of the Shares by such Underwriter to any person if a copy of a
Preliminary Prospectus or Prospectus or any amendment or supplement thereto (if
any amendment or supplement thereto shall have been furnished to such
Underwriter) correcting such untrue statement or alleged untrue statement or
omission or alleged omission shall not have been given or sent to such person by
or on behalf of such Underwriter with or prior to the written confirmation of
the sale involved. This indemnity agreement will be
-21-
in addition to any liability which the Company may otherwise have,
including without limitations any obligations the Company has to indemnify the
Selling Stockholders under the Registration Rights Agreement dated November 30,
1993 or otherwise.
(b) The Selling Stockholders, severally and not jointly, agree to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act against any losses, claims, damages or
liabilities to which such Underwriter or such controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained or incorporated by reference in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding and expenses reasonable incurred
in responding to a subpoena or governmental inquiry whether or not such
underwriter or controlling person is a party to any action or proceeding;
provided, however, that a Selling Stockholder will be liable under this Section
8(b) only to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission made or incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company by or through such Selling Stockholder specifically for
use in the preparation thereof; provided further, that the indemnity agreement
contained in this Section 8(b) with respect to any Preliminary Prospectus will
not inure to the benefit of any Underwriter (or of any person controlling such
Underwriter) on account of any loss, claim, damage, liability, action or
proceeding arising out of or based upon an untrue statement or alleged untrue
statement of a material fact, or omission or alleged omission of a material
fact, made therein, with respect to the sale of the Shares by such Underwriter
to any person if a copy of a Preliminary Prospectus or Prospectus or any
amendment or supplement thereto (if any amendment or supplement thereto shall
have been furnished to such Underwriter) correcting such untrue statement or
alleged untrue statement or omission or alleged omission shall not have been
given or sent to such person by or on behalf of such Underwriter with or prior
to the written confirmation of the sale involved. In no event, however, shall
the liability of any Selling Stockholder for indemnification under this Section
8(b) exceed the lesser of (i) that proportion of the total of such losses,
claims, damages or liabilities indemnified against equal to the proportion of
the total Shares sold hereunder which is being sold by such Selling Stockholder,
or (ii) the proceeds received by such Selling Stockholder from the Underwriters
in the offering. This indemnity agreement will be in addition to any liability
which the Selling Stockholders may otherwise have.
-22-
(c) Each Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
the Selling Stockholders, and each person, if any, who controls the Company or
the Selling Stockholders within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, Selling Stockholder or controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained or
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein 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; and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, Selling Stockholder or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made or incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(d) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a), (b) or (c)
shall be available to any party who shall fail to give notice as provided in
this Section 8(d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a), (b) or (c). In case any such
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
and shall pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties)
-23-
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate counsel for all such indemnified parties.
Such firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) or (b) and by the Company and the Selling
Stockholders in the case of parties indemnified pursuant to Section 8(c). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(e) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(a), (b) or
(c) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Stockholders on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
-24-
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(e)
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
8(e). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) no Selling Stockholder
shall be required to contribute any amount in excess of the lesser of (A) that
proportion of the total of such losses, claims, damages or liabilities
indemnified or contributed against equal to the proportion of the total Shares
sold hereunder which is being sold by such Selling Stockholder, or (B) the
proceeds received by such Selling Stockholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(e) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
9. Default by Underwriters. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or a Selling Stockholder), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Stockholders such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to
-25-
purchase hereunder, to purchase the Firm Shares or Option Shares, as the
case may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of shares of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the Company and the Selling Stockholders or you as the Representatives
of the Underwriters will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Company or of the Selling Stockholders except to the extent provided in Section
8 hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Section 9, the Closing Date or Option Closing Date, as the case
may be, may be postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. Notices. All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed or
telecopied and confirmed as follows: if to the Underwriters, to Alex. Xxxxx &
Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. XxXxxxx; if to the Company or the Selling Stockholders, to
Xxxx X. Xxxxxx, President, Zygo Corporation, Xxxxxx Xxxxx Road, Middlefield,
Connecticut 06455-0488.
11. Termination. This Agreement may be terminated by you by notice to the
Sellers as follows:
(a) at any time prior to the earlier of (i) the time the Firm Shares
are released by you for sale by notice to the Underwriters, or (ii) 11:30
A.M. on the first business day following the date of this Agreement;
(b) at any time after the date hereof if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change
in or affecting the condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and its Subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, (ii)
any outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity
or crisis or change in economic or political conditions if the effect of
such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States would, in your
reasonable judgment, make the offering or delivery of the Shares
impracticable or inadvisable, (iii) suspension of trading in securities on
the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of
-26-
days of trading) for securities on either such Exchange, (iv) the
enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in your reasonable opinion materially and adversely affects
or will materially or adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by either United States or
New York State authorities, (vi) any downgrading of the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Exchange
Act), (vii) the suspension of trading of the Company's Common Stock by the
NASD, (viii) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
your reasonable opinion has a material adverse effect on the securities
markets in the United States; or (ix) any litigation or proceeding is
pending or threatened against the Underwriters which seeks to enjoin or
otherwise restrain or seeks damages in connection with, or questions the
legality or validity of, this Agreement or the transactions contemplated
hereby; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company and
the Selling Stockholders, as to any obligation of the Underwriters to purchase
the Option Shares, upon the occurrence at any time prior to the Option Closing
Date of any of the events described in subparagraph (b) above or as provided in
Sections 6 and 9 of this Agreement.
12. Successors. This Agreement has been and is made solely for the benefit
of the Underwriters, the Company and the Selling Stockholders and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
13. Information Provided by Underwriters. The Company, the Selling
Stockholders and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page of the
Prospectus (insofar as such information relates to the Underwriters),
information provided in connection with Item 502(d) of Regulation S-K under the
Act and under the caption "Underwriting" in the Prospectus.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers or the Selling Stockholders, and (c)
delivery of and payment for the Shares under this Agreement.
-27-
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Stockholders, the
Company and the several Underwriters in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company and the
Selling Stockholders for examination, upon request, but without warranty on your
part as to the authority of the signers thereof.
-28-
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney which authorized such Attorney-in-Fact to take such
action.
Very truly yours,
ZYGO CORPORATION
By:_____________________________
Selling Stockholders listed on
Schedule II
By:______________________________
________, Attorney-in-Fact
-29-
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXX & COMPANY, INC.
UNTERBERG HARRIS
As Representatives of the
several Underwriters listed
on Schedule I
By: ALEX. XXXXX & SONS INCORPORATED
By:____________________________
Authorized Officer
-30-
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Alex. Xxxxx & Sons Incorporated .............
Xxxxxxx & Company, Inc. .....................
Unterberg Harris ............................
---------
Total .................... 1,600,000
=========
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SCHEDULE II
Schedule of Selling Stockholders
Selling Stockholder Number of Shares to be Sold
------------------- ---------------------------
Canon Inc. .................................. 300,000
Wesleyan University ......................... 225,000
Xxxx X. Xxxxxx .............................. 75,000
Xxx X. Xxxxxx ............................... 70,000
Xxxx X. Xxxxxx .............................. 60,000
Xxxxxx X. XxXxxxxx .......................... 25,000
-------
Total .................... 755,000
=======
