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THE ▇▇▇▇ GROUP INC.
(a Louisiana corporation)
4,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: October 5, 2000
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties..................................................................3
(a) Representations and Warranties by the Company...................................................3
(i) Compliance with Registration Requirements..............................................3
(ii) Incorporated Documents.................................................................4
(iii) Independent Accountants................................................................4
(iv) Financial Statements...................................................................4
(v) No Material Adverse Change in Business.................................................4
(vi) Good Standing of the Company...........................................................5
(vii) Good Standing of Subsidiaries..........................................................5
(viii) Capitalization.........................................................................5
(ix) Authorization of Agreement.............................................................6
(x) Authorization and Description of Securities............................................6
(xi) Absence of Defaults and Conflicts......................................................6
(xii) Absence of Labor Disputes..............................................................7
(xiii) Absence of Proceedings.................................................................7
(xiv) Accuracy of Exhibits...................................................................7
(xv) Possession of Intellectual Property....................................................7
(xvi) Absence of Further Requirements........................................................7
(xvii) Possession of Licenses and Permits.....................................................8
(xviii) Title to Property......................................................................8
(xix) Compliance with Cuba Act...............................................................8
(xx) Investment Company Act.................................................................8
(xxi) Environmental Laws.....................................................................9
(xxii) Title to Assets Purchased from Selling Shareholders....................................9
(b) Representations and Warranties by the Selling Shareholders......................................9
(i) Accurate Disclosure....................................................................9
(ii) Authorization of Agreements...........................................................10
(iii) Good and Valid Title..................................................................10
(iv) Due Execution of the Ancillary Agreements.............................................10
(v) Absence of Manipulation...............................................................11
(vi) Absence of Further Requirements.......................................................11
(vii) Restriction on Sale of Securities.....................................................11
(viii) Certificates Suitable for Transfer....................................................11
(ix) No Association with NASD..............................................................11
(x) Conveyance of Assets to the Company...................................................12
(c) Officer's Certificates.........................................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................12
(a) Initial Securities.............................................................................12
(b) Option Securities..............................................................................12
(c) Payment........................................................................................13
(d) Denominations; Registration....................................................................13
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SECTION 3. Covenants of the Company.......................................................................14
(a) Compliance with Securities Regulations and Commission Requests.................................14
(b) Filing of Amendments...........................................................................14
(c) Delivery of Registration Statement.............................................................14
(d) Delivery of Prospectuses.......................................................................14
(e) Continued Compliance with Securities Laws......................................................15
(f) Blue Sky Qualifications........................................................................15
(g) Rule 158.......................................................................................15
(h) Use of Proceeds................................................................................15
(i) Listing........................................................................................15
(j) Restriction on Sale of Securities..............................................................16
(k) Reporting Requirements.........................................................................16
SECTION 4. Payment of Expenses............................................................................16
(a) Expenses.......................................................................................16
(b) Expenses of the Selling Shareholders...........................................................17
(c) Termination of Agreement.......................................................................17
SECTION 5. Conditions of Underwriters' Obligations........................................................17
(a) Effectiveness of Registration Statement........................................................17
(b) Opinions of Counsel for Company................................................................17
(c) Opinion of Counsel for the Selling Shareholders................................................18
(d) Opinion of Counsel for Underwriters............................................................18
(e) Officers' Certificate..........................................................................18
(f) Certificate of Selling Shareholders............................................................18
(g) Accountant's Comfort Letter....................................................................18
(h) Bring-down Comfort Letter......................................................................19
(i) Approval of Listing............................................................................19
(j) Lock-up Agreements.............................................................................19
(k) Conditions to Purchase of Option Securities....................................................19
(i) Officers' Certificate.................................................................19
(ii) Opinion of Counsel for Company........................................................19
(iii) Opinion of Counsel for Underwriters...................................................19
(iv) Bring-down Comfort Letter.............................................................19
(l) Additional Documents...........................................................................20
(m) Termination of Agreement.......................................................................20
SECTION 6. Indemnification................................................................................20
(a) Indemnification of Underwriters by the Company.................................................20
(b) Indemnification of Underwriters by Selling Shareholders........................................21
(c) Indemnification of Company, Directors and Officers and the Selling Shareholders................22
(d) Actions against Parties; Notification..........................................................22
(e) Settlement without Consent if Failure to Reimburse.............................................23
(f) Other Agreements with Respect to Indemnification...............................................23
SECTION 7. Contribution...................................................................................23
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SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................25
SECTION 9. Termination of Agreement.......................................................................25
(a) Termination; General...........................................................................25
(b) Liabilities....................................................................................25
SECTION 10. Default by One or More of the Underwriters.....................................................25
SECTION 11. Default by One or More of the Selling Shareholders or the Company..............................26
SECTION 12. Notices........................................................................................26
SECTION 13. Parties........................................................................................27
SECTION 14. GOVERNING LAW AND TIME.........................................................................27
SECTION 15. Effect of Headings.............................................................................27
SCHEDULES
Schedule A - List of Underwriters Sch A-1
Schedule B - Company and Selling Shareholders Sch B-1
Schedule C - Pricing Information Sch C-1
Schedule D - List of Subsidiaries Sch D-1
Schedule E - List of Persons and Entities Subject to Lock-up Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. A-1
Exhibit B - Form of Opinion of Kantrow, Spaht, ▇▇▇▇▇▇
& Blitzer (A Professional Law Corporation) B-1
Exhibit C - Form of Opinion of Counsel to Stone & ▇▇▇▇▇▇▇, Incorporated C-1
Exhibit D - Form of Opinion of Counsel to Stone & ▇▇▇▇▇▇▇ Group Limited (U.K.) D-1
Exhibit E - Form of Opinion of Counsel to Stone & ▇▇▇▇▇▇▇ Canada Limited (Canada) E-1
Exhibit F - Form of Lock-up Letter F-1
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THE ▇▇▇▇ GROUP INC.
(A Louisiana corporation)
4,000,000 Shares of Common Stock
(No Par Value Per Share)
PURCHASE AGREEMENT
October 5, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇▇▇▇▇▇▇ & Company, Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The ▇▇▇▇ Group Inc., a Louisiana corporation (the "Company") and Stone
& ▇▇▇▇▇▇▇, Incorporated, Stone & ▇▇▇▇▇▇▇ Group Limited and Stone & ▇▇▇▇▇▇▇
Canada Limited (collectively, the "Selling Shareholders"), confirm their
respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated (together with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., "▇▇▇▇▇▇▇ ▇▇▇▇▇"), Credit
Suisse First Boston Corporation ("CSFB"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ & Associates, Inc. and ▇▇▇▇▇▇▇▇▇ & Company Inc. (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and CSFB are
acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the Selling Shareholders, acting
severally and not jointly, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
no par value per share, of the Company ("Common Stock") set forth in Schedules A
and B hereto and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 600,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 4,000,000 shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the 600,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities".
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The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (No. 333-44542), and
Amendment No. 1 thereto, covering the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus, preliminary prospectus supplement and prospectus and
prospectus supplement. Such registration statement has been declared effective
by the Commission, and the Company has filed such post-effective amendments
thereto as may be required and each such post-effective amendment has been
declared effective by the Commission. Promptly after execution and delivery of
this Agreement, the Company will either (i) prepare and file a prospectus and a
prospectus supplement in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus or prospectus supplement
used before such registration statement became effective, and any prospectus or
prospectus supplement that omitted, as applicable, the Rule 430A Information or
the Rule 434 Information, that was used after such effectiveness and prior to
the execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus and the final prospectus supplement, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus supplement dated September 15, 2000 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to
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mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to mean
and include the filing of any document under the Securities Exchange Act of 1934
(the "1934 Act") which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not, at any such time, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include, at any such time,
an untrue statement of a material fact or omitted or will omit, at any
such time, 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. If Rule 434 is used, the Company will comply
with the requirements of Rule 434. The representations and warranties
in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the
▇-▇
▇
▇▇▇▇ ▇▇▇ Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply, at any such time, in all
material respects with the requirements of the 1934 Act and the rules
and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), did not and will not contain, at any such time, an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The consolidated financial
statements included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly in all
material respects the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the consolidated
statements of income, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in all material respects in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
in all material respects the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly in all
material respects the information shown therein, have been prepared in
all material respects in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate in all material respects to give effect to the
transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition,
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financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Louisiana and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity other than the
pledge of such shares of capital stock in each such Subsidiary pursuant
to the Company's $400,000,000 credit facility with Bank One, NA, which
is described in the Prospectus; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
The only subsidiaries of the Company are (a) the subsidiaries listed on
Schedule D hereto and (b) certain other subsidiaries which, considered
in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company,
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including the Securities to be purchased by the Underwriters from the
Selling Shareholders, have been duly authorized and validly issued and
are fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company, including the Securities to be purchased
by the Underwriters from the Selling Shareholders, was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable;
the Common Stock conforms in all material respects to all statements
relating thereto contained in the Prospectus and such description
conforms in all material respects to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with
its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
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behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Disputes. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in any such case, would reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
would reasonably be expected to result in a Material Adverse Effect, or
which would reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, would not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, except for such failures
that individually or in the aggregate would not result in a Material
Adverse Effect, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the
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Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectus, (b) exist
pursuant to the terms of the Company's 400,000,000 credit facility with
Bank One, NA, which is described in the Prospectus, or (c) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries; and all of
the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
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(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) to the
knowledge of the Company there are no events or circumstances that
would reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxii) Title to Assets Purchased from Selling Shareholders.
The sale by the Selling Shareholders and certain of their affiliated
entities of substantially all of their assets to the Company was
authorized and confirmed by order of a Bankruptcy Court judge having
the authority to do so (the "Sale Order"), which is a final, valid and
non-appealable order. The Company has paid the Aggregate Consideration
(as defined in the Asset Purchase Agreement, dated as of July 14, 2000
(the "APA"), by and among Stone & ▇▇▇▇▇▇▇, Incorporated ("S&W"),
certain subsidiaries of S&W and the Company) for the Assets (as defined
in APA), including the assets of the Cold Storage Business (as defined
in the APA) and the assets of the Process Business (as defined in the
APA) and has the unlimited and unconditional right to cause the
transfer of the assets of the Cold Storage Business and the assets of
the Process Business at any time free and clear of all liens, claims
or interests as and to the extent set forth in the Sale Order or the
APA.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof, as of the Closing Time, and agrees with each Underwriter, as
follows:
(i) Accurate Disclosure. Each Selling Shareholder has reviewed
and is familiar with the Registration Statement and the Prospectus and
neither the Prospectus nor any amendments or supplements thereto
includes any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
provided, however, that the representations and warranties set forth in
this Section 1(b)(i) apply
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only to statements or omissions in the Registration Statement or the
Prospectus that are based upon information furnished by or on behalf of
such Selling Shareholder to the Company in writing expressly for use in
the Registration Statement or the Prospectus; such Selling Shareholder
is not prompted to sell the Securities to be sold by such Selling
Shareholder hereunder by any information concerning the Company or any
subsidiary of the Company which is not set forth in the Prospectus.
(ii) Authorization of Agreements. Each Selling Shareholder has
the full right, power and authority to enter into this Agreement and a
Power of Attorney (the "Power of Attorney") and a Custody Agreement
(the "Custody Agreement" and, together with the Power of Attorney, the
"Ancillary Agreements") and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder hereunder. The
execution and delivery of this Agreement and the Ancillary Agreements
and the sale and delivery of the Securities to be sold by such Selling
Shareholder and the consummation of the transactions contemplated
herein and compliance by such Selling Shareholder with its obligations
hereunder have been duly authorized by such Selling Shareholder and do
not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will
such action result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling Shareholder,
if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of its properties.
(iii) Good and Valid Title. Such Selling Shareholder has and
will at the Closing Time have good and valid title to the Securities to
be sold by such Selling Shareholder hereunder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement; and
upon delivery of such Securities and payment of the purchase price
therefor as herein contemplated, assuming each such Underwriter has no
notice of any adverse claim, each of the Underwriters will receive good
and valid title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) Due Execution of the Ancillary Agreements. Such Selling
Shareholder has duly executed and delivered, in the form heretofore
furnished to the Representatives, the Power of Attorney with ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, III, each as attorney-in-fact
(the "Attorney-in-Fact") and the Custody Agreement with First Union
National Bank, as custodian (the "Custodian"); the Custodian is
authorized to deliver the Securities to be sold by such Selling
Shareholder hereunder and to accept payment therefor; and the
Attorney-in-Fact is authorized to execute and deliver this Agreement
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and the certificate referred to in Section 5(f) or that may be required
pursuant to Section 5(m) on behalf of such Selling Shareholder, to
sell, assign and transfer to the Underwriters the Securities to be sold
by such Selling Shareholder hereunder, to determine the purchase price
to be paid by the Underwriters to such Selling Shareholder, as provided
in Section 2(a) hereof, to authorize the delivery of the Securities to
be sold by such Selling Shareholder hereunder, to accept payment
therefor, and otherwise to act on behalf of such Selling Shareholder in
connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each Selling
Shareholder of its obligations hereunder or in the Ancillary
Agreements, or in connection with the sale and delivery of the
Securities hereunder or the consummation of the transactions
contemplated by this Agreement.
(vii) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, such Selling Shareholder will
not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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 or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
(viii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by such Selling Shareholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such
Securities to the Underwriters pursuant to this Agreement.
(ix) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of
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Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc.
(x) Conveyance of Assets to the Company. S&W represents and
warrants that the sale by S&W of substantially all of its assets to the
Company was authorized and confirmed by order of a Bankruptcy Court
judge having the authority to do so, which is a final, valid and
non-appealable order. S&W conveyed (1) the assets subject to the Sale
Order, (2) the unconditional and unlimited right to acquire the assets
of the Cold Storage Business (as defined in the APA) and (3) the assets
of the Process Business (as defined in the APA) free and clear of all
mortgages, security interests, conditional sale or other title
retention agreements, pledges, liens, claims, judgments, demands,
easements, charges, encumbrances, defects, security interests, options,
rights of first refusal and restrictions of all kind except as
expressly provided in the Sale Order or the APA.
(c) Officer's Certificates. Any certificate signed by any authorized
officer of the Company or any of its subsidiaries and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby, and any certificate signed by or on behalf of the Selling
Shareholders as such and delivered to the Representatives or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to the Underwriters as
to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Selling Shareholders, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, the number of
Initial Securities set forth on Schedule B opposite the name of the Company and
each Selling Shareholder, and each Underwriter, severally and not jointly,
agrees to purchase from the Company and each Selling Shareholder, at the price
per share set forth in Schedule C, the number of Initial Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
Initial Securities, which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the total number of
Initial Securities, subject, in each case, to such adjustments among the
Underwriters as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 600,000 shares of Common Stock,
as set forth in Schedule A, at the price per share set forth in Schedule C. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery")
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shall be determined by the Representatives, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Akin,
Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
and the Selling Shareholders (such time and date of payment and delivery being
herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to a bank account designated by the
Company and the Custodian pursuant to each Selling Shareholder's Custody
Agreement, against delivery to the Representatives for the respective accounts
of the Underwriters of certificates for the Securities to be purchased by them.
It is understood that each Underwriter has authorized the Representatives, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial Securities and the Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
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SECTION 3. Covenants of the Company. The Company covenants with each Underwriter
as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statement. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number
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of copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
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(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company, (D) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to an
option plan adopted in connection with the S&W acquisition or pursuant to a
proposed 2000 stock option plan, in either event such options not to exceed an
aggregate of 1,000,000 shares (which shares shall not be issued prior to the
expiration of the 90-day lock-up period referred to above) or (E) any shares of
Common Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
(ix) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
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(b) Expenses of the Selling Shareholders. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance or
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (1) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (2) the fees and disbursements of their
counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 (unless such
termination arises from or is related entirely to matters in the control of the
Selling Shareholders) or Section 9(a)(i) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters. If this Agreement is
terminated by the Representatives in accordance with the provisions of Section 5
hereof (but only if such termination arises from or is related entirely to
matters in the control of the Selling Shareholders), the Selling Shareholders
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of each of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. and Kantrow, Spaht, ▇▇▇▇▇▇ & Blitzer (A
Professional Law Corporation), counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letters for each of the other Underwriters to the effect set
forth in Exhibits A and B hereto and to such further effect as counsel to the
Underwriters may reasonably request.
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(c) Opinion of Counsel for the Selling Shareholders. At Closing Time,
the Representative(s) shall have received the favorable opinion, dated as of
Closing Time, of each of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
S&W, ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel, counsel for Stone & ▇▇▇▇▇▇▇ Group Limited
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel, counsel for Stone & ▇▇▇▇▇▇▇ Canada Limited,
in form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibits C, D and E hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters with respect to the matters set forth in clauses (i),
(ii) and the penultimate paragraph of Exhibit A hereto. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the officers' knowledge, are contemplated by
the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of the Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial
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statements and certain financial information contained in the Registration
Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(j) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit F hereto signed by the persons listed on Schedule E hereto.
(k) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
each of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. and Kantrow, Spaht, ▇▇▇▇▇▇ & Blitzer (A
Professional Law Corporation), counsel for the Company, each in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
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(l) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect..
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company and the Selling Shareholders;
and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or
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proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission made in
any preliminary prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, liability claim,
damage or expense purchased shares from such Underwriter but was not sent or
given a copy of the Prospectus (as amended or supplemented) at or prior to the
written confirmation of the sale of such shares to such person in any case where
the delivery of the Prospectus (as amended or supplemented) is required by the
1933 Act, and where the Company has delivered the Prospectus to the several
Underwriters in requisite quantity and on a timely basis to permit such
delivery.
(b) Indemnification of Underwriters by Selling Shareholders. The
Selling Shareholders, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, but only with reference to
information furnished in writing by the Selling Shareholders furnished
to the Company in writing by or on behalf of the Selling Shareholders
expressly for use in the Registration Statement;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company and the Selling Shareholders;
and
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(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission made in
any preliminary prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, liability claim,
damage or expense purchased shares from such Underwriter but was not sent or
given a copy of the Prospectus (as amended or supplemented) at or prior to the
written confirmation of the sale of such shares to such person in any case where
the delivery of the Prospectus (as amended or supplemented) is required by the
1933 Act, and where the Company has delivered the Prospectus to the several
Underwriters in requisite quantity and on a timely basis to permit such
delivery. Notwithstanding the foregoing, the aggregate liability of the Selling
Shareholders pursuant to this Section 6(b) shall be limited to an amount equal
to the total proceeds (before deducting underwriting discounts and commissions
and expenses) received by the Selling Shareholders from the Underwriters for the
sale of the Securities sold by the Selling Shareholders.
(c) Indemnification of Company, Directors and Officers and the Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder against any and all loss, liability, claim, damage and expense
described in the indemnity contained in this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from
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any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or 6(b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in and, with the consent of the
indemnified party, assume the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request for reimbursement (other than
the payment of amounts being disputed by the indemnifying party in good faith)
prior to the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which
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resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute
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pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section 7 shall not affect any agreement among
the Company and the Selling Shareholders with respect to indemnification.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth;
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if, however, the Representatives shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company and any Selling
Shareholder shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the Company.
(a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder is obligated to sell hereunder, then the Underwriters may, at option
of the Representatives, by notice from the Representatives to the Company and
the non-defaulting Selling Shareholders, either (i) terminate this Agreement
without any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(ii) elect to purchase the Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
(b) In the event of a default by any Selling Shareholder as referred to
in this Section 11, each of the Representatives, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of
S-26
31
telecommunication. Notices to the Underwriters shall be directed to the
Representatives at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇; notices to the Company shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
SECTION 13. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
S-27
32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
THE ▇▇▇▇ GROUP INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Secretary and General Counsel
----------------------------------
STONE & ▇▇▇▇▇▇▇, INCORPORATED
STONE & ▇▇▇▇▇▇▇ GROUP LIMITED
STONE & ▇▇▇▇▇▇▇ GROUP CANADA LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Attorney-in-fact
----------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
33
SCHEDULE A
Number of Number of
Name of Underwriter Initial Securities Option Securities
------------------- ------------------ -----------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated..... 1,388,850
Credit Suisse First Boston Corporation................. 1,388,850
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc........................... 462,600
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc........................ 462,600
▇▇▇▇▇▇▇▇▇ & Company, Inc............................... 77,100
Banc of America Securities LLC......................... 40,000
Deutsche Bank Securities Inc........................... 40,000
Prudential Securities Incorporated 40,000
RBC Dominion Securities Corporation 40,000
Hibernia Southcoast Capital, L.L.C. 20,000
▇▇▇▇▇▇▇ ▇▇▇▇ & Company L.L.C. 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 20,000
--------- -------
Total.................................................. 4,000,000 600,000
========= =======
Sch. ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
Number of Initial Maximum Number of
Initial Securities to Option Securities
be Sold to be Sold
--------------------- -----------------
The ▇▇▇▇ Group Inc. .................................................. 1,818,669 600,000
Stone & ▇▇▇▇▇▇▇, Incorporated ........................................ 1,656,856 --
Stone & ▇▇▇▇▇▇▇ Group Limited ........................................ 369,837 --
Stone & ▇▇▇▇▇▇▇ Canada Limited ....................................... 154,638 --
------------ ------------
Total ................................................................ 4,000,000 600,000
============ ============
Sch. B-1
35
SCHEDULE C
THE ▇▇▇▇ GROUP INC.
4,000,000 Shares of Common Stock
(No Par Value Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $63.50.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $60.325, being an amount equal to the initial
public offering price set forth above less $3.175 per share.
Sch. C-1
36
SCHEDULE D
List of Subsidiaries
ACL Piping, Inc.
▇▇▇▇▇ Australia Pty Ltd.
▇▇▇▇▇ & Co., Limited
Associated Valve, Inc.
▇. ▇. ▇▇▇▇, Inc.*
C.B.P. Engineering Corp.
Cojafex B.V.
Eagle Industries, Inc.
Field Services, Inc.
▇▇▇▇▇▇-▇▇▇, S.R.O.
Gulf Coast Equipment Rental, Inc.
Holdings Manufacturas ▇▇▇▇ South America, C.A.
IRM/NAPTech Joint Venture, L.L.C.
Lone Star Fabricators, Inc.
Manufacturas ▇▇▇▇ South America, C.A.
NAPTech PS Corporation
Pipework Engineering and Developments Limited
Prospect Industries (Holdings) Inc.
Prospect Industries Overseas, Limited
SAON Properties, Inc.
Secorp, Inc.
S&W Consultants, Inc.
S&W Consultants, Ltd.
▇▇▇▇ Alloy Piping Products, Inc.*
▇▇▇▇ Capital, Inc.
▇▇▇▇ Connex, Inc.
▇▇▇▇ Constructors, Inc.*
▇▇▇▇ ▇▇▇▇ Limited
▇▇▇▇ Energy Services, Inc.
▇▇▇▇ Export Company, S. de ▇.▇. de ▇.▇.
▇▇▇▇ Fabricators, Inc.
▇▇▇▇ ▇▇▇▇▇▇ A/DE, Inc.
▇▇▇▇ ▇▇▇▇▇▇ Company, Inc.
▇▇▇▇-▇▇▇▇▇▇ Fabrication, Inc.
▇▇▇▇ ▇▇▇▇▇▇ Power Services, Inc.
▇▇▇▇ FVF, Inc.
▇▇▇▇ Global Energy Services, Inc.
▇▇▇▇ GRP of California
The ▇▇▇▇ Group International, Inc.
▇▇▇▇ Group U.K. Holdings Limited
▇▇▇▇ Group U.K. Limited
▇▇▇▇ Group UK Pension Plan Limited
▇▇▇▇ Group U.K. Pension Scheme Ltd.
▇▇▇▇ Group U.K. (Projects) Limited
▇▇▇▇ Heat Treating Service, C.A.
▇▇▇▇ Holdings South America, C.A.
▇▇▇▇ Industrial Supply Co., Inc.
▇▇▇▇ International, Inc.
▇▇▇▇ ▇▇ Holdings, Inc.
▇▇▇▇ ▇▇ Holdings, L.L.C.
▇▇▇▇ Lancas, C.A.
▇▇▇▇ Maintenance, Inc.
▇▇▇▇ Managed Services, Inc.
▇▇▇▇ Manufacturing & Services, Inc.
▇▇▇▇ Manpower S. de ▇.▇. de ▇▇
▇▇▇▇ Mexican Holdings, S. de ▇.▇. de ▇.▇.
▇▇▇▇ NAPTech, Inc.
▇▇▇▇ Overseas (Far East) Limited
▇▇▇▇ Overseas (Middle East) Limited
▇▇▇▇ Pipe ▇▇▇▇▇▇▇ Inc.
▇▇▇▇ Power Services, Inc.
▇▇▇▇ Process Fabricators, Inc.*
▇▇▇▇ Process and Industrial Group, Inc.
▇▇▇▇ Services, Inc.
▇▇▇▇ Sunland Fabricators, Inc.*
▇▇▇▇ Trading FSC, Ltd.
▇▇▇▇ Word Industries Fabricators, Inc.
Stone & ▇▇▇▇▇▇▇ Asia, Inc.
Stone & ▇▇▇▇▇▇▇ Canada Holding One (N.S.), ULC
Stone & ▇▇▇▇▇▇▇ Canada Holding Two, Inc.
Stone & ▇▇▇▇▇▇▇ Canada, ▇.▇.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Construction, Inc.
Stone & ▇▇▇▇▇▇▇ Holding One, Inc. *
Stone & ▇▇▇▇▇▇▇ Holding Two, Inc.*
Stone & ▇▇▇▇▇▇▇, Inc.*
Stone & ▇▇▇▇▇▇▇ International, Inc.
Stone & ▇▇▇▇▇▇▇ Limited
Stone & ▇▇▇▇▇▇▇ Purchasing, Inc.
Stone & Webster Massachusetts, Inc.
SWINC Acquisition Four, Inc.
SWINC Acquisition Five, L.L.C.
The ▇▇▇▇ Group Inc. Political Action Committee, Inc.
Welding Technology and Supply, Inc,
Whessoe Piping Systems Limited
World Industrial Constructors, Inc.
Worldwide Industrial Constructors, Inc.
* Significant subsidiaries of the Company (as such term is defined in
Rule 1-02 of Regulation S-X).
Sch. D-1
37
SCHEDULE E
List of persons and entities
subject to lock-up
▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
N. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Sch. E-1
38
EXHIBIT A
FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and, to our knowledge, no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(ii) The Registration Statement, including any Rule 462(b) Registration
Statement and the Rule 430A Information, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements, notes and schedules thereto, and other financial data
and accounting information included therein or omitted therefrom, as to which we
express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(iii) The form of certificate used to evidence the Common Stock
complies in all material respects with the requirements of the New York Stock
Exchange.
(iv) To our knowledge, there are no statutes or regulations that are
required to be described in the Prospectus that are not described as required.
(v) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(vi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we express no
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement by the Company or for the
offering, issuance, sale or delivery of the Securities by the Company.
(vii) The Company is not an "investment company" as such term is
defined in the 1940 Act.
A-1
39
(viii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption "Use Of Proceeds") and compliance by the Company with its
obligations under the Purchase Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary of the Company pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, filed as an exhibit to the Company's Annual
Report on Form 10-K for the year ended August 31, 1999 (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
any applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
No facts have come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information, at the time such Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Purchase Agreement and
as of the date hereof, included or includes an untrue statement of a material
fact or omitted 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. We express no view, belief or comment with respect to the
form, accuracy, completeness or fairness of the financial statements, notes or
schedules thereto, or other financial data or accounting information included in
the Registration Statement, the Prospectus or the Incorporated Documents.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-2
40
EXHIBIT B
FORM OF OPINION OF KANTROW, SPAHT, ▇▇▇▇▇▇
AND BLITZER (A PROFESSIONAL LAW CORPORATION)
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Louisiana, with corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(ii) Each of ▇.▇. ▇▇▇▇, Inc., ▇▇▇▇ Alloy Piping Products, Inc., ▇▇▇▇
Constructors, Inc. and ▇▇▇▇ Sunland Fabricators, Inc. (the "Designated
Subsidiaries") has been duly incorporated and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; except as disclosed in the
Registration Statement, all of the outstanding shares of capital stock of each
Designated Subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and, to our knowledge, all of the outstanding shares of
capital stock of the Designated Subsidiaries are owned of record by the Company,
directly or through subsidiaries, and are free and clear of any security
interest, mortgage, pledge, lien, encumbrance or equity other than the pledge of
such shares of capital stock in each of the Designated Subsidiaries pursuant to
the Company's $400,000,000 credit facility with Bank One, NA, which is described
in the Prospectus; to our knowledge, none of the outstanding shares of capital
stock of any Designated Subsidiary was issued in violation of any preemptive or,
similar rights that entitle or will entitle any person to acquire any shares
upon issuance thereof by such Designated Subsidiary. Each of the Designated
Subsidiaries is a corporation in good standing.
(iii) Each of the Company and the Designated Subsidiaries is duly
qualified to conduct its business as a foreign corporation in each of the
respective jurisdictions set forth on Exhibit A hereto and such jurisdictions
are the only jurisdictions in which the conduct of business or ownership or
leasing of property by the Company and the Designated Subsidiaries as shown
thereon requires such qualification, except to the extent that the failure to be
so qualified or to be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus
(except for subsequent issuances, if any, pursuant to reservations, agreements
or employee benefit plans described in the Prospectus or pursuant to the
exercise of convertible securities or options described in the Prospectus).
(v) All the shares of capital stock of the Company issued and
outstanding prior to the issuance of the Shares to be issued and sold by the
Company pursuant to the Purchase Agreement have been duly authorized and validly
issued, are fully paid and non-assessable and, to our knowledge, were not issued
in violation of any preemptive or similar rights that entitle or will entitle
any person to acquire any shares upon issuance thereof by the Company.
B-1
41
(vi) The form of certificate used to evidence the Common Stock complies
in all material respects with Louisiana law and with any applicable requirements
of the Restated Articles of Incorporation and the Amended and Restated By-laws
of the Company.
(vii) The statements in the Prospectus under "Description of Capital
Stock - Common Stock," "Description of Capital Stock - Preferred Stock" and in
the Registration Statement under Part II, Item 15, to the extent that they
constitute summaries of the legal matters or documents referred to therein,
fairly present the information called for with respect to such legal matters or
documents and fairly summarize the matters referred to therein.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Shares to be issued and sold to the Underwriters by the
Company pursuant to the Purchase Agreement have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms of the Purchase Agreement, will be validly issued, fully paid and
non-assessable and free of any preemptive or, to our knowledge, similar rights
that entitle or will entitle any person to acquire any shares upon issuance
thereof by the Company; no holder of the Shares is or will be subject to
personal liability for the debts and liabilities of the Company solely by reason
of being such a holder.
(x) Each of the documents incorporated by reference in the Prospectus
(other than the financial statements and notes and supporting schedules included
or incorporated therein or omitted therefrom, as to all of which we express no
opinion) at the time it was filed with the Commission complied as to form in all
material respects with the requirements for such document under the 1934 Act and
the rules and regulations of the Commission thereunder.
(xi) To our knowledge, neither the Company nor any of the Designated
Subsidiaries is in violation of its respective certificate or articles of
incorporation or by-laws, and no default by the Company or the Designated
Subsidiaries exists in the performance of any obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument known to us, except as
may be disclosed in the Prospectus and except for those defaults that are not
reasonably likely, individually or together with other such defaults, to have a
Material Adverse Effect.
(xii) Neither (A) the execution, delivery and performance by the
Company of the Purchase Agreement, (B) the issuance and sale of the Shares by
the Company pursuant to the Purchase Agreement, nor (C) the use of the proceeds
from the sale of the Shares as described in the Prospectus under the caption
"Use of Proceeds" will, as of the date hereof, result in the violation or breach
by the Company of, or constitute a default or Repayment Event under, (i) the
Restated Articles of Incorporation of the Company or its Amended and Restated
By-laws; (ii) the certificate or articles of incorporation, as applicable, of
the Designated Subsidiaries; (iii) any federal or Louisiana statute, rule or
regulation applicable to the Company or any of its subsidiaries (except that no
opinion is expressed with respect to blue sky or state securities laws); (iv)
any agreement or other instrument of which we have knowledge, or which is an
exhibit to the Registration Statement and has been or is required to be filed in
connection with the offering of the Securities, binding upon the Company or any
of its subsidiaries (except for such
B-2
42
violations, breaches or defaults that would not have a Material Adverse Effect);
or (v) any court or administrative orders, writs, judgments, or decrees
applicable to the Company or its subsidiaries of which we have knowledge.
(xiii) To our knowledge, other than as described or contemplated in the
Prospectus, there is no legal or governmental proceeding 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 is
required to be described in the Registration Statement or the Prospectus that is
not so described therein.
No facts came to our attention that caused us to believe that the
Registration Statement, at the time it became effective (except with respect to
the financial statements and notes and schedules thereto and other financial,
accounting, tax or statistical information included or incorporated by reference
therein as to all of which we express no view) contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus (except with respect to the financial statements and notes and
schedules thereto and other financial, accounting, tax or statistical
information included or incorporated by reference therein as to all of which we
express no view) as of the date of the Prospectus and as of the date hereof,
contained any untrue statement of material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
B-3
43
EXHIBIT C
FORM OF OPINION OF COUNSEL FOR STONE & ▇▇▇▇▇▇▇, INCORPORATED
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) Each of the Power of Attorney and the S&W Custody Agreement, has
been duly executed and delivered by S&W and constitutes the valid and binding
obligation of S&W, enforceable against S&W in accordance with its terms under
the laws of the State of Delaware in the case of the Power of Attorney and under
the laws of the State of New York in the case of the S&W Custody Agreement.
(ii) Each of the S&W UK Custody Agreement and the S&W Canada Custody
Agreement constitutes the valid and binding obligation of S&W UK and S&W Canada,
respectively, enforceable against S&W and S&W Canada, respectively, in
accordance with its terms under the laws of the State of New York.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of S&W.
(iv) Each Attorney-in-Fact has been duly authorized by S&W to deliver
the S&W Shares on behalf of S&W in accordance with the terms of the Purchase
Agreement.
(v) The execution, delivery and performance of the Purchase Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery of the
S&W Shares and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by S&W with its
obligations under the Purchase Agreement have been duly authorized by the Board
of Directors of S&W and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of,
or default under or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities or any property or assets of S&W
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which S&W is
a party or by which it may be bound, or to which any of the property or assets
of S&W may be subject nor will such action result in any violation of the
provisions of the charter or by-laws of S&W, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over S&W or any of its
properties.
(vi) Neither the execution, delivery or performance by S&W of the
Agreement nor the compliance by the Company with the terms and provisions
thereof will contravene any provision of (i) the Certificate of Incorporation or
By-laws of the Company or (ii) any Applicable Law of the State of Delaware.
(vii) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than (i) the issuance of the
order of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under the state
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securities laws, as to which we need express no opinion and (ii) the approval of
the Bankruptcy Court, which has been obtained) is necessary or required to be
obtained by S&W for the performance by S&W of its obligations under the Purchase
Agreement or in the Power of Attorney and Custody Agreement, or in connection
with the offer, sale or delivery of the S&W Shares.
(viii) With respect to the Selling Shareholder Shares, an action
based on an adverse claim to such Selling Shareholder Shares, whether framed in
conversion, replevin, constructive trust, equitable lien, or other theory, may
not be asserted successfully against any Underwriter that acquires a security
entitlement (as defined in Section 8-501 of the New York UCC) relating to such
Selling Shareholder if and to the extent any such Underwriter acquires security
entitlements with respect to such Selling Shareholder Shares from the Depository
Trust Company ("DTC") and the Underwriter has no notice of any adverse claims.
Although we are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement and have
made no independent check or verification thereof, no facts have come to our
attention that have led us to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus and Prospectus
Supplement, each as of its date or as of the date hereof, contained or contains
an untrue statement of a material fact or omitted 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, except that we express
no opinion or belief with respect to the financial statements, schedules and
other financial data included therein or excluded therefrom or the exhibits to
the Registration Statement and provided that the foregoing applies only to
statements or omissions in the Registration Statement, the Prospectus or the
Prospectus Supplement that are based upon information furnished by S&W to ▇▇▇▇
in writing expressly for use in the Registration Statement, the Prospectus or
the Prospectus Supplement.
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EXHIBIT D
FORM OF OPINION OF COUNSEL FOR STONE & ▇▇▇▇▇▇▇ GROUP LIMITED
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholder for the performance by the Selling
Shareholder of its obligations under the Purchase Agreement or in the Power of
Attorney and Custody Agreement, or in connection with the offer, sale or
delivery of the Securities.
(ii) The Power of Attorney and Custody Agreement has been duly executed
and delivered by the Selling Shareholder and constitutes the legal, valid and
binding agreement of the Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholder to deliver the Securities on behalf of the Selling Shareholder in
accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery of the
Securities and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by the Selling
Shareholder with its obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of the Selling Shareholder and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of the Selling Shareholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which the
Selling Shareholder is a party or by which it may be bound, or to which any of
the property or assets of the Selling Shareholder may be subject nor will such
action result in any violation of the provisions of the charter or by-laws of
the Selling Shareholder, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over the Selling Shareholder or any of its
properties.
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EXHIBIT E
FORM OF OPINION OF COUNSEL FOR STONE & ▇▇▇▇▇▇▇ CANADA LIMITED
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholder for the performance by the Selling
Shareholder of its obligations under the Purchase Agreement or in the Power of
Attorney and Custody Agreement, or in connection with the offer, sale or
delivery of the Securities.
(ii) The Power of Attorney and Custody Agreement has been duly executed
and delivered by the Selling Shareholder and constitutes the legal, valid and
binding agreement of the Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholder to deliver the Securities on behalf of the Selling Shareholder in
accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery of the
Securities and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by the Selling
Shareholder with its obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of the Selling Shareholder and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of the Selling Shareholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which the
Selling Shareholder is a party or by which it may be bound, or to which any of
the property or assets of the Selling Shareholder may be subject nor will such
action result in any violation of the provisions of the charter or by-laws of
the Selling Shareholder, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over the Selling Shareholder or any of its
properties.
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EXHIBIT F
October 5, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇▇▇▇▇▇▇ & Company, Inc.
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by The ▇▇▇▇ Group Inc.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of The
▇▇▇▇ Group Inc., a Louisiana corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") Credit Suisse First Boston, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., and ▇▇▇▇▇▇▇▇▇ & Company, Inc., propose to
enter into a Purchase Agreement (the "Purchase Agreement") with the Company and
the Selling Shareholder providing for the public offering of shares (the
"Securities") of the Company's common stock, no par value (the "Common Stock").
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder and an officer and/or director of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the Purchase Agreement that, during a period of 90 days from the date
of the Purchase Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (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 for the sale of, lend or
otherwise dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing, other than Common Stock to be sold in the
offering or transferred as a bona fide gift (provided that any donee thereof
agrees in writing to be bound by the terms hereof) or (ii) enter into any swap
or any other agreement or
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any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
Very truly yours,
Signature:
-------------------------
Print Name:
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