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3,500,000 SHARES
AMERICAN SUPERCONDUCTOR CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
April ___, 1998
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April ___, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
American Superconductor Corporation, a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters named in
Schedule II hereto (the "UNDERWRITERS"), and certain shareholders of the Company
(the "SELLING SHAREHOLDERS") named in Schedule I hereto severally propose to
sell to the several Underwriters, an aggregate of 3,500,000 shares of the Common
Stock, par value $.01 per share, of the Company (the "FIRM SHARES"), of which
3,029,121 shares are to be issued and sold by the Company and 470,879 shares are
to be sold by the Selling Shareholders, each Selling Shareholder selling the
amount set forth opposite such Selling Shareholder's name in Schedule I hereto.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 525,000 shares of its Common Stock, par value $.01
per share (the "ADDITIONAL SHARES"), if and to the extent that you, on behalf of
the Underwriters, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of Common
Stock, par value $.01 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the documents incorporated by reference therein and the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
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amended (the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION
STATEMENT"; the prospectus in the form first used to confirm sales of Shares,
including the documents incorporated by reference therein, is hereinafter
referred to as the "PROSPECTUS." If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"),
then any reference herein to the term "REGISTRATION STATEMENT" shall be deemed
to include such Rule 462 Registration Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
incorporated by reference in the Prospectus complied or will comply when
so filed in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the
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Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly by
the Company or another subsidiary, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Shares to be sold by
the Selling Shareholders) outstanding prior to the issuance of the Shares
to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
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material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except for the effectiveness of the Registration
Statement and such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), have received all permits, licenses or other
approvals required of them under applicable
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Environmental Laws to conduct their respective businesses and are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(o) The Company has incurred no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(p) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except for the rights of CHARTH, a subsidiary of
Electricite de France, which have been duly waived, "piggyback"
registration rights of Invemed Associates, Inc. and Xxxxxxxx Xxxxxx with
respect to shares of Common Stock issuable upon the exercise of warrants
held by them (which warrants are not yet exercisable), which have been
duly waived, "demand" registration rights of the Electric Power Research
Institute with respect to shares of Common Stock issuable upon the
exercise of a warrant held by it (which warrant has not yet been
exercised) and (iv) "demand" registration rights of various persons and
entities with respect to Common Stock received pursuant to the Company's
acquisition of Superconductivity, Inc. in April 1997.
(q) The accountants who have expressed their opinions with respect
to certain of the financial statements and schedules included or
incorporated by reference in the Registration Statement are independent
public accountants as required by the Securities Act.
(r) The consolidated financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position of the
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Company as of the respective dates of such financial statements, and the
consolidated results of operations and cash flows of the Company for the
respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed in the Prospectus. The financial information
set forth in the Prospectus under "Selected Consolidated Financial Data"
presents fairly, on the basis stated in the Prospectus, the information
set forth therein.
(s) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default under any
consent decree, or in default with respect to any material provision of
any lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party or by which it may be bound, or to which
any of the property or assets of the Company or such subsidiary is
subject, and there does not exist any state of facts which constitutes an
event of default as defined in such documents or which, with notice or
lapse of time or both, would constitute such an event of default, in each
case except for violations or defaults which neither singly nor in the
aggregate are material to the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole.
(t) The Company and its subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and its subsidiaries,
taken as a whole. The Company and each of its subsidiaries holds its
leased properties under valid and binding leases.
(u) The status of the Company's and its subsidiaries' patents,
patent rights, trademarks, copyrights, inventions, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other proprietary
rights (collectively, the "TRADE RIGHTS"), whether owned by the Company or
such subsidiary or obtained by the Company or such subsidiary through
license or otherwise, is as described in the Prospectus. Except as
described in the Prospectus, neither the Company
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nor any of its subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to any Trade Rights
which has not been resolved or disposed of, and neither the Company nor
any of its subsidiaries has infringed, misappropriated or otherwise
conflicted with Trade Rights of any third parties, which infringement,
misappropriation or conflict would, singly or in the aggregate, have a
material adverse effect upon the Company and its subsidiaries, taken as a
whole.
(v) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(w) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent
which might reasonably be expected to have a material adverse effect on
the Company and its subsidiaries, taken as a whole; and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, joint developers, manufacturers or
contractors which might be expected to result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries, taken as a whole.
(x) All employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
established, maintained or contributed to by the Company or by any of its
subsidiaries comply with (to the extent applicable) the requirements of
ERISA or the comparable applicable laws of any foreign jurisdiction and
all other applicable law, except for such noncompliance that could not
reasonably be expected, singly or in the aggregate, to have a material
adverse effect on the Company and the subsidiaries, taken as a whole; and
no employee pension benefit plan (as defined in Section 3(2) of ERISA)
established, maintained, or contributed to by the Company or any of its
subsidiaries is a multi-employer plan (as defined in Section 3(37) of
ERISA), or has incurred or assumed an "accumulated funding deficiency"
within the meaning of Section 302 of ERISA; and neither the Company nor
any of its subsidiaries has, with respect to any such employee pension
benefit plan, incurred or assumed any material unfunded liabilities or has
incurred or assumed, or is jointly or severally liable for, any material
liability (other than for the payment of premiums) to the Pension Benefit
Guaranty Corporation.
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2. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders represents and warrants to and agrees with each of the
Underwriters that:
(a) Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Shareholder and
the Company, as Custodian, relating to the deposit of the Shares to be
sold by such Selling Shareholder (the "CUSTODY AGREEMENT") and the Power
of Attorney appointing certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY") will not contravene any provision of applicable law,
or the certificate of incorporation or by-laws of such Selling Shareholder
(if such Selling Shareholder is a corporation), or any agreement or other
instrument binding upon such Selling Shareholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by such Selling Shareholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of such Selling
Shareholder, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(c) Such Selling Shareholder has, and on the Closing Date will
have, valid title to the Shares to be sold by such Selling Shareholder and
the legal right and power, and all authorization and approval required by
law, to enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder.
(d) The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by such Selling Shareholder and are
valid and binding agreements of such Selling Shareholder.
(e) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares
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free and clear of any security interests, claims, liens, equities and
other encumbrances.
(f) Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement,
and other than as permitted by the Securities Act, the Selling Shareholder
has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares.
(g) (i) the Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this Section 2(g) apply only to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to such Selling Stockholder furnished to the Company
in writing by such Selling Stockholder expressly for use therein.
(h) If there is any change in the information referred to in
Section (g) above, the Selling Stockholders will immediately notify the
Company and you of such change.
3. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
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On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 525,000 Additional
Shares at the Purchase Price. If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company in writing not later than
30 days after the date of this Agreement, which notice shall specify the number
of Additional Shares to be purchased by the Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, (C) the granting of options to
purchase shares of Common Stock under the Company's employee stock option plans
or (D) transactions by any person other than the Company relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the offering of the Shares.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
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become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at $___
a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at
a price that represents a concession not in excess of $____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $___ a share, to any Underwriter or to
certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on April ___, 1998, or at such other time on the same or such other date,
not later than April ___, 1998, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 3 or at such other time on the same or on such other date, in any event
not later than May __, 1998, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "OPTION CLOSING
DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [__________] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
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(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 6(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxx and Xxxx LLP, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company and each of its domestic subsidiaries has
been duly incorporated and is an existing 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; and each of the Company
and its domestic
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subsidiaries is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction listed on Schedule I to such opinion,
which, to such counsel's knowledge, constitute the only jurisdictions in
which the Company owns or leases real property;
(ii) all of the outstanding shares of capital stock of each of the
Company's domestic subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable, and all outstanding shares
of capital stock of the Company's subsidiaries are owned of record (and to
the knowledge of such counsel, after due inquiry, beneficially) directly
by the Company or another of its subsidiaries, free and clear of any
perfected security interests, or, to the knowledge of such counsel, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectus; the Shares delivered to the Underwriters pursuant to
this Agreement on such Closing Date have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of the Company
have no preemptive or similar rights with respect to the issuance of such
Shares under the Company's certificate of incorporation or by-laws or
under Delaware law or, to such counsel's knowledge, under any agreement or
otherwise;
(iv) there are no contracts, agreements or understandings known to
such counsel between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include such
securities in the Shares registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act, except for (i)
the rights of CHARTH, a subsidiary of Electricite de France, which have
been duly waived, (ii) "piggyback" registration rights of Invemed
Associates, Inc. and Xxxxxxxx Xxxxxx with respect to shares of Common
Stock issuable upon the exercise of warrants held by them (which warrants
are not yet exercisable), which have been duly waived, (iii) "demand"
registration rights of the Electric Power Research Institute with
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respect to shares of Common Stock issuable upon the exercise of a warrant
held by it (which warrant has not yet been exercised), and (iv) "demand"
registration rights of various persons and entities with respect to Common
Stock received pursuant to the Company's acquisition of Superconductivity,
Inc. in April 1997;
(v) no consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company, except
such as have been obtained or made under the Securities Act and such as
may be required under state securities laws;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated, including the
issuance and sale of the Shares by the Company, will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any statute or any rule or regulation of any
governmental agency or body, or the charter or by-laws of the Company or
any of its subsidiaries, or, to the knowledge of such counsel, any order
of any governmental agency or body or any court having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties, or, to the knowledge of such counsel, any agreement or
instrument to which the Company or any of its subsidiaries is a party that
has been filed as an exhibit to a document filed by the Company under the
Exchange Act or otherwise described in the Registration Statement, and the
Company has full power and authority to authorize, issue and sell all of
the Shares sold by it as contemplated by this Agreement;
(viii) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
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(ix) (A) the Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus either was filed with the Commission pursuant to Rule 424(b) on
the date specified in such opinion or was included in the Registration
Statement (as the case may be), and to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act, and the Registration Statement and the Prospectus, as of
their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Securities Act and the
rules and regulations issued thereunder; (B) such counsel has no reason to
believe that the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective, contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of the Closing Date or
the Optional Closing Date, as the case may be, contains any untrue
statement of a material fact or omits to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; (C) each document incorporated by
reference in the Registration Statement and the Prospectus complied as to
form in all material respects when filed with the Commission with the
requirements of the Exchange Act and the rules and regulations issued
thereunder; (D) the descriptions in the Registration Statement and the
Prospectus of matters of law, statutes, legal and governmental proceedings
and contracts and other documents (including, without limitation, such
descriptions in the Prospectus under the caption "Business--Patents, Trade
Secrets and Licenses") are accurate in all material respects and fairly
present the information required to be shown; and (E) such counsel does
not know of any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries are subject that
are required to be described in the Registration Statement or the
Prospectus and are not described as required, or of any statutes or
regulations that are required, by the Securities Act or the rules and
regulations issued thereunder, to be described in the Registration
Statement or the Prospectus, or of any contracts or other documents that
are required to be described in the
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Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement or to any document incorporated by reference in the
Registration Statement or the Prospectus which are not described, or filed
as required; it being understood that such counsel need express no opinion
as to the financial statements or other financial and statistical data
contained in the Registration Statement or the Prospectus;
(d) The Underwriters shall have received on the Closing Date an opinion
of Xxxx and Xxxx LLP, counsel for the Selling Shareholders, dated the Closing
Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders;
(ii) the execution and delivery by each Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement and the Custody Agreement and Power of Attorney of such Selling
Shareholder will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon such
Selling Shareholder or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except such as have been obtained or
made under the Securities Act and such as may be required by the
securities or Blue Sky laws of the various states in connection with offer
and sale of the Shares;
(iii) each of the Selling Shareholders has the legal right and
power, and all authorization and approval required by law, to enter into
this Agreement and the Custody Agreement and Power of Attorney of such
Selling Shareholder and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder;
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(iv) the Custody Agreement and the Power of Attorney of each
Selling Shareholder have been duly authorized, executed and delivered by
such Selling Shareholder and are valid and binding agreements of such
Selling Shareholder; and
(v) delivery to the Underwriters of the Shares to be sold by each
Selling Shareholder pursuant to this Agreement will pass title to such
Shares to such Underwriter free and clear of any adverse claim (as defined
in Article 8 of the UCC), assuming such Underwriter had no notice of such
adverse claim.
(e) The Underwriters shall have received on the Closing Date an opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing Date,
to the effect that:
(i) the Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the statements in the Prospectus under the caption
"Underwriters" insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(iv) such counsel is of the opinion that the Registration Statement
and Prospectus (except for financial statements and schedules and other
financial and statistical data included therein as to which such counsel
need not express any opinion) comply as to form in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder, has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to
which such counsel need not express any belief) the Registration Statement
and the prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
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necessary to make the statements therein not misleading and has no reason
to believe that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not express
any belief) the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
With respect to Section 6(e)(iv) above, Xxxxx Xxxx & Xxxxxxxx and with
respect to Section 6(c)(x)(B) above, Xxxx and Xxxx LLP, may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and documents incorporated by reference and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified. With respect to clauses (B) and (C) of Section 6(e)(iv) above, Xxxxx
Xxxx & Xxxxxxxx may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (other than the documents incorporated
by reference) and upon review and discussion of the contents thereof (including
documents incorporated by reference), but are without independent check or
verification, except as specified. With respect to Section 6(d) above, Xxxx and
Xxxx LLP may rely upon an opinion or opinions of counsel for any Selling
Shareholders and, with respect to factual matters and to the extent such counsel
deems appropriate, upon the representations of each Selling Shareholder
contained herein and in the Custody Agreement and Power of Attorney of such
Selling Shareholder and in other documents and instruments; provided that (A)
each such counsel for the Selling Shareholders is reasonably satisfactory to
your counsel, (B) a copy of each opinion so relied upon is delivered to you and
is in form and substance reasonably satisfactory to your counsel, (C) copies of
such Custody Agreements and Powers of Attorney and of any such other documents
and instruments shall be delivered to you and shall be in form and substance
reasonably satisfactory to your counsel and (D) Xxxx and Xxxx LLP shall state in
their opinion that they believe they are justified in relying on each such other
opinion.
The opinion of Xxxx and Xxxx LLP described in Sections 6(c) and 6(d) above
(and any opinions of counsel for any Selling Shareholder referred to in the
immediately preceding paragraph) shall be rendered to the Underwriters at the
request of the Company or one or
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more of the Selling Shareholders, as the case may be, and shall so state
therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, letters dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Underwriters, from Coopers & Xxxxxxx, L.L.P., Ernst & Young LLP and Xxxxx
& Gesteland LLP, each an independent public accounting firm, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in, or incorporated by
reference in, the Registration Statement and the Prospectus; provided that
the letters delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference therein) and to each other Underwriter a copy of
the Registration Statement (without exhibits thereto but including
documents incorporated by reference therein) and to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the Prospectus,
any documents incorporated by reference therein, and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request. The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as used in this
Agreement shall include all
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documents subsequently filed by the Company with the Commission pursuant
to the Exchange Act that are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of their
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obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Shareholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) the cost of printing certificates representing the
Shares, (vi) the costs and charges of any transfer agent, registrar or
depositary, (vii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (viii) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 9
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on resale of
any of the Shares by them, their "road show" expenses and any advertising
expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
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9. Indemnity and Contribution. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein and except that such
indemnity agreement shall not inure to the benefit of any Underwriter from whom
the person asserting any loss, claim, damage or liability purchased Shares, or
any person controlling such Underwriter, if the Prospectus (as then amended or
supplemented, if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls any Underwriter or the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Selling Shareholder furnished in writing by or on behalf of
such Selling Shareholder expressly for use in the
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Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(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 Section 9(a), 9(b) or 9(c), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay 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, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (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) 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 respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either
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Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling Shareholders and all
persons, if any, who control any Selling Shareholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of any Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any such separate
firm for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case of
any such separate firm for the Selling Shareholders and such control persons of
any Selling Shareholders, such firm shall be designated in writing by the
persons named as attorneys-in-fact for the Selling Shareholders under the Powers
of Attorney. 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. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if such settlement is entered
into more than 30 days after receipt by such indemnifying party of the aforesaid
request, such indemnifying party shall have received notice of the specific
terms of such settlement at least 15 days prior to such settlement being
effected, and such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement
(unless such indemnifying party is at that time disputing in good faith the
entitlement of such indemnified party to such reimbursement under the terms of
this Section 9). No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in Section 9(a), 9(b)
or 9(c) is unavailable to an indemnified party or insufficient in respect of
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any losses, claims, damages or liabilities provided for under the terms of such
sections, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 9(e)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(e)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand 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 Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 9 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 that does not take account of the
equitable considerations referred to in Section 9(e). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth in Section 9(c), 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 Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
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required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section
9 and the representations, warranties and other statements of the Company and
the Selling Shareholders contained in this Agreement shall remain operative and
in full force and effect regardless of any termination of this Agreement, any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, any Selling Shareholder or any person controlling any Selling
Shareholder, or the Company, its officers or directors or any person controlling
the Company and acceptance of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, trading of any securities of
the Company shall have been suspended on any exchange or in any over-the-counter
market, a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities or there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and in the case of any of the events specified in clauses
10(a)(i) through 10(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the
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aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the relevant Sellers
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on the Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not less
than the number of Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
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12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
AMERICAN SUPERCONDUCTOR
CORPORATION
By:_____________________________________
Name:
Title:
The Selling Shareholders named in
Schedule I hereto, acting severally
By:_____________________________________
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:_____________________________________
Name:
Title:
28
30
SCHEDULE I
NUMBER OF FIRM SHARES
SELLING SHAREHOLDER TO BE SOLD
-------------------------------------------- ---------------------
Xxxxxx Xxxxxxxxx Partners II, L.P. ......... 2,252
Adhill Limited Partnership ................. 33,412
Advent Future Limited Partnership .......... 33,412
Advent International Investors Limited
Partnership ............................. 1,234
Advent Performance Materials Limited
Partnership ............................. 33,412
Adwest Limited Partnership ................. 33,412
World Technology Limited Partnership ....... 33,412
Materia Ventures I, L.P. ................... 97,763
MidAmerican Capital Company ................ 114,291
Xerox Corporation .......................... 88,279
-------
470,879
=======
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SCHEDULE II
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated .........
NationsBanc Xxxxxxxxxx Securities LLC .....
---------
Total: ................................. 3,500,000
=========
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
April ____, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with American Superconductor Corporation, a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), of ___ shares (the "SHARES") of the Common Stock, par value
$.01 per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date on which the Company initially files the registration statement with the
Securities and Exchange Commission with respect to the Public Offering and
ending 90 days after the date of the final prospectus relating to the Public
Offering (the "PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any Shares to the
Underwriters pursuant to the Underwriting Agreement or (b) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering. In addition, the
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undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This Agreement will be null and void, if the Public Offering is not
consummated by [July 31/October 31, 1998.]
Very truly yours,
____________________________________
(Name)
____________________________________
(Address)
2
