1
Exhibit 1.1
8,400,000 Shares
STEEL DYNAMICS, INC.
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
[_________], 1997
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[_________], 1997
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
XxXxxxxx & Company Securities, Inc.
Salomon Brothers Inc
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
PaineWebber International (U.K.) Ltd.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
XxXxxxxx & Company Securities, Inc.
Salomon Brothers International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs:
Steel Dynamics, Inc., an Indiana corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedules I and
II hereto (the "Underwriters"), and certain shareholders of the Company (the
"Firm Selling Shareholders") named in Schedule III hereto severally propose to
sell to the several Underwriters, an aggregate of 8,400,000 shares of the Common
Stock (par value $.01 per share) of the Company (the "Firm Shares") of which
1,255,971 shares are to be issued and sold by the Company (the "Company Shares")
and 7,144,029 shares are to be sold by the Firm Selling Shareholders, each Firm
Selling Shareholder selling the amount set forth opposite such Firm Selling
Shareholder's name in Schedule III hereto. The Company and the Firm Selling
Shareholders are hereinafter collectively referred to as the "Firm Sellers".
It is understood that, subject to the conditions hereinafter
stated, 6,720,000 Firm Shares (the "U.S. Firm Shares") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 1,680,000 Firm Shares (the "International Shares")
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will be sold to the several International Underwriters named in Schedule II
hereto (the "International Underwriters") in connection with the offering and
sale of such International Shares outside the United States and Canada to
persons other than United States and Canadian Persons. Xxxxxx Xxxxxxx & Co.
Incorporated, PaineWebber Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, XxXxxxxx & Company Securities, Inc. and Salomon Brothers Inc shall
act as representatives (the "U.S. Representatives") of the several U.S.
Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited, PaineWebber
International (U.K.) Ltd., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation,
XxXxxxxx & Company Securities, Inc. and Salomon Brothers International Limited
shall act as representatives (the "International Representatives") of the
several International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "Underwriters".
In addition, the Company and certain shareholders of the
Company named in Schedule IV hereto (the "Option Selling Shareholders")
severally propose to sell to the several U.S. Underwriters not more than an
additional aggregate of 1,260,000 shares of Common Stock (par value $.01 per
share) of the Company (the "Additional Shares") if and to the extent that the
U.S. Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Common Stock granted to the
U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the "Shares". The shares of Common
Stock (par value $.01 per share) of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock". The Firm Selling Shareholders and the Option Selling
Shareholders are hereinafter collectively referred to as the "Selling
Shareholders". The Company and the Selling Shareholders are hereinafter
collectively referred to as the "Sellers".
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement relating to the Shares.
The registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used in
connection with the offering and sale of Shares in the United States and Canada
to United States and Canadian Persons, and the international prospectus, to be
used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the exhibits thereto and the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), is hereinafter referred to as the "Original Registration
Statement"; any registration statement filed pursuant to Rule 462(b) under the
Securities Act is hereinafter referred to as the "Rule 462(b) Registration
Statement"; the Original Registration Statement and any Rule 462(b) Registration
Statement are hereinafter referred to collectively as the "Registration
Statement"; the U.S. prospectus and the international
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prospectus in the respective forms first used to confirm sales of Shares are
hereinafter collectively referred to as the "Prospectus".
1. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters and the Selling Shareholders
that:
(a) The Original Registration Statement has become effective,
and if the Company has elected to rely upon Rule 462(b) under the
Securities Act, the Rule 462(b) Registration Statement shall have
become effective not later than the earlier of (i) 10:00 p.m. Eastern
time on the date hereof and (ii) the time confirmations are sent or
given, as specified by Rule 462(b) under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not
contain and each such part, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section 1(b)
do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
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business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(f) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid
and non-assessable.
(g) The Company Shares and the Additional Shares to be sold by
the Company have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(h) This Agreement and each of the Irrevocable Power of
Attorney and Custody Agreements (collectively, the "Power of Attorney
and Custody Agreements"), each dated the date hereof, by each Selling
Shareholder and the Company as Custodian (the "Custodian"), appointing
certain individuals as the Selling Shareholders' attorneys-in-fact to
the extent set forth therein relating to the transactions contemplated
hereby and by the Registration Statement have been duly authorized,
executed and delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
the Power of Attorney and Custody Agreements, and the issuance and
delivery of the Company Shares and the Additional Shares to be sold by
the Company will not contravene any provision of applicable law or the
articles of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
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(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain such consents, authorizations,
approvals, orders, certificates and permits or make such declarations
and filings would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, certificate or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act or
incorporated by reference into or filed as part of the Rule 462(b)
Registration Statement, complied when so filed in all material respects
with the Securities Act and the rules and regulations of the Commission
thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(o) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such
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permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (1) the
Company and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has
not purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus.
(r) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not 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 and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries, in
each case except as described in or contemplated by the Prospectus.
(s) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material 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 and
trade names currently employed by them in connection with the business
now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with
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respect to any of the foregoing which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result
in any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus.
(v) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(w) There are no holders of securities (debt or equity) of the
Company or any of its subsidiaries, or holders of rights, options, or
warrants to obtain securities of the Company or any of its
subsidiaries, who have the right, during the 90 day period after the
date of this Agreement to require the Company to register securities
held by them under the Securities Act, other than holders who have
waived such right for the 90 day period after the date of the public
offering of the Shares and have waived their rights with respect to the
inclusion of their securities in the Registration Statement.
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2. Representations and Warranties of the Selling
Shareholders. Each of the Selling Shareholders severally and not jointly
represents and warrants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement and its Power of Attorney and Custody Agreement
will not contravene any provision of applicable law, or the certificate
of incorporation or by-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or the limited partnership
agreement (if such Selling Shareholder is a limited partnership) or any
agreement or other instrument binding upon such Selling Shareholder or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement or the
Power of Attorney and Custody Agreement of such Selling Shareholder,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date (as
defined below), in the case of a Firm Selling Shareholder, or the
Option Closing Date (as defined below), in the case of an Option
Selling Shareholder, will have, valid title to the Shares to be sold by
such Selling Shareholder and the legal right and power, and all
required authorizations and approvals to enter into this Agreement and
its Power of Attorney and Custody Agreement and to sell, transfer and
deliver the Shares to be sold by such Selling Shareholder.
(d) The Power of Attorney and Custody Agreement of such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms, except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(e) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass valid title to such
Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
(f) The information which relates specifically to such Selling
Shareholder, as set forth under the caption "Principal and Selling
Stockholders" (including the
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notes thereto), in the Registration Statement and Prospectus is, and on
the Closing Date (as defined below), in the case of a Firm Selling
Shareholder, or the Option Closing Date (as defined below), in the case
of an Option Selling Shareholder, will be, true, correct and complete,
and does not, and on the Closing Date, in the case of a Firm Selling
Shareholder, or the Option Closing Date, in the case of an Option
Selling Shareholder, will not, contain any untrue statement of material
fact or omit to state any material fact necessary to make such
information not misleading.
3. Agreements to Sell and Purchase. Each Firm Seller,
severally and not jointly, hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Firm Seller at U.S.$[_______] a
share (the "Purchase Price") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the number of Firm Shares to be sold by such Firm Seller as
the number of Firm Shares set forth in Schedules I and II hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company and the
Option Selling Shareholders severally agree to sell to the U.S. Underwriters the
Additional Shares, and the U.S. Underwriters shall have a one-time right to
purchase, severally and not jointly, up to 1,260,000 Additional Shares at the
Purchase Price. If you, on behalf of the U.S. Underwriters, elect to exercise
such option, you shall so notify the Company and the Option Selling Shareholders
in writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the U.S.
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representatives may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of U.S. Firm
Shares set forth in Schedule I hereto opposite the name of such U.S. Underwriter
bears to the total number of U.S. Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx"), it will not,
for a period of 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common
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Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of the Shares to the
Underwriters pursuant to this Agreement, (b) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the public offering of the Common Stock hereunder or (c) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing.
In addition, each Selling Shareholder agrees that, without the
prior written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will
not, for a period of 90 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Original Registration Statement and
this Agreement have become effective as in your judgment is advisable. The
Sellers are further advised by you that the Shares are to be offered to the
public initially at U.S.$[____] a share (the "Public Offering Price") and to
certain dealers selected by you at a price that represents a concession not in
excess of U.S.$[__] a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S.$[__] a share, to any Underwriter or to certain other dealers.
Each U.S. Underwriter hereby makes to and with the Company and
each Selling Shareholder the representations and agreements of such U.S.
Underwriter contained in the fifth and sixth paragraphs of Article III of the
Agreement Between U.S. and International Underwriters of even date herewith.
Each International Underwriter hereby makes to and with the Company and each
Selling Shareholder the representations and agreements of such International
Underwriter contained in the seventh, eighth, ninth and tenth paragraphs of
Article III of such Agreement.
5. Payment and Delivery. Payment for the Firm Shares to be
sold by each Firm Seller shall be made by wire transfers to the Company's
account and the Custodian's account (for the benefit of the Firm Selling
Shareholders) in federal funds or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m., New York City time, on [___________],
1997, or at such other time on the same or such other date, not later than
[___________], 1997, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "Closing Date".
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Payment for any Additional Shares shall be made by wire
transfer payable to the Company's and the Custodian's account (for the benefit
of the Option Selling Shareholders) in federal funds or other funds immediately
available in New York City against delivery of such Additional Shares for the
respective accounts of the several U.S. Underwriters at the office of Shearman &
Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m., New York
City time, on the date specified in the notice described in Section 3 or on such
other date, in any event not later than [____________], 1997, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The
obligations of the Sellers and the several obligations of the Underwriters
hereunder are subject to the condition that the Registration Statement shall
have become effective not later than the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the
rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Registration Statement,
that, in your judgment, is material and adverse and makes it,
in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus
(exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement).
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(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company or
the Underwriters, threatened by the Commission.
(d) You shall have received on the Closing Date an opinion of
Xxxxxxx & XxXxxxx, counsel for the Company, dated the Closing Date, in
the form attached hereto as Exhibit A.
The opinion of Xxxxxxx & McNagny shall be rendered to you at
the request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
each of [Names of counsel], counsel for the Selling Shareholders, dated
the Closing Date, in the form attached hereto as Exhibits B-1 through
B-7, respectively.
The opinions of [Names of counsel], shall be rendered to the
Underwriters at the request of the Selling Shareholders and shall so
state therein.
(f) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, with respect to the Registration Statement and the Prospectus and
such other related matters as you may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(g) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof and the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Deloitte & Touche LLP, independent public accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
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(h) The "lock-up" agreements, each substantially in the form
of Exhibit C hereto between you, certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or any securities convertible
into or exercisable or exchangeable for such Common Stock, delivered to
you on or before the date hereof, shall be in full force and effect on
the Closing Date.
(i) You shall have received on the Closing Date certificates
dated the Closing Date and signed by the Selling Shareholders or by
attorneys-in-fact of the Selling Shareholders, to the effect that the
representations and warranties of each such Selling Shareholder
contained in this Agreement are true and correct as of the Closing Date
and that each such Selling Shareholder has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(j) The Company shall have complied with the provisions of
Section 7(a) hereof with respect to the furnishing of Prospectuses on
the business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(k) The Shares shall have been approved for quotation on the
Nasdaq National Market System by the National Association of Securities
Dealers, Inc. (the "NASD").
(l) You shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related to
the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned
in Section 7(c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request. In the case of the Prospectus, to furnish
copies of the Prospectus in New York City, prior to 10:00 a.m., New
York City
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time, on the business day following the date of this Agreement, in such
quantities as you reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object; and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of your counsel the Prospectus
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with any review of the offering of the Shares by the NASD.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act no later than the earlier of (i) 10:00 p.m. Eastern time
on the date hereof and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2) under the Securities Act, and shall pay
the applicable fees in accordance with Rule 111 under the Securities
Act.
(f) To make generally available to the Company's security
holders and to you as soon as practicable, but no later than 60 days
after the end of the twelve-month period beginning at the end of the
Company's fiscal quarter during which the effective date of the
Original Registration Statement occurs, an earnings statement of the
Company covering such twelve-month period that satisfies the provisions
of
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Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(g) To use the net proceeds received by the Company from the
sale of the Shares hereunder in the manner specified in the Prospectus
under the caption "Use of Proceeds".
(h) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its and
the Selling Shareholders (except to the extent set forth in Section
8(a) below) obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any preliminary or supplementary Blue Sky memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification
and in connection with any preliminary or supplementary Blue Sky
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the NASD, (v) all fees of counsel
incurred on behalf of or disbursements by Xxxxxx Xxxxxxx in its
capacity as "qualified independent underwriter" within the meaning of
Rule 2720 of the NASD's Conduct Rules ("QIU"), (vi) all fees and
expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to quoting the Shares on the Nasdaq
National Market System, (vii) the cost of printing certificates
representing the Shares, (viii) the costs and charges of any transfer
agent, registrar or depositary, (ix) the costs and expenses of the
Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (x) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which
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provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 9 and the
last paragraph of Section 11 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them, and any advertising expenses connected with any offers they may
make.
8. Covenants of the Selling Shareholders. In further
consideration of the agreements of the Underwriters herein contained, each of
the Selling Shareholders severally and not jointly covenants as follows:
(a) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, to pay or cause to be paid
(i) all taxes, if any, on the transfer and sale of the Shares being
sold by such Selling Shareholder and (ii) all expenses incident to the
delivery of the Shares and the fees and expenses of counsel and
accountants for such Selling Shareholder; provided that the provisions
of this Section 8(a) and Section 7(h) shall not in any way affect any
agreement between the Company and the Selling Shareholders with respect
to the payment of expenses.
(b) Such Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review, promptly upon
receipt, each amendment thereto provided to such Selling Shareholder.
At any time during the period from the date hereof through the Closing
Date or the Option Closing Date, in the case of an Option Selling
Shareholder, if there is any change in the information in the
Registration Statement as set forth under the caption "Principal and
Selling Shareholders" (including the notes thereto) that specifically
relate to such Selling Shareholder, such Selling Shareholder will
immediately notify the Company of such change.
(c) Such Selling Shareholder shall cooperate fully with the
Company in supplying such information relating to such Selling
Shareholder and the Shares as the Company may reasonably request for
use in preparation of the Registration Statement and all other
documents reasonably necessary or desirable in connection with the
offering of Shares. In addition, such Selling Shareholder shall furnish
to the Company (or, at the Company's request, to the Underwriters or
other parties) such further certificates and documents confirming the
representations and warranties contained herein, or with respect to
related matters, as the Company may reasonably request.
9. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
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connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each Underwriter and each person, if any,
who controls the Company or any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Selling Shareholder, as set forth under the caption "Principal
and Selling Stockholders" (including the notes thereto) in the Prospectus and
Registration Statement or any amendment or supplement thereto; provided,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchased Shares,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities; provided, further, that
with respect to any amount due an indemnified
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person under this paragraph (b), each Selling Shareholder shall be liable only
to the extent of the net proceeds received by such Selling Shareholder from the
sale of such Selling Shareholder's Shares.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholders and each person, if any,
who controls the Company or any Selling Shareholder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to such Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) The Company also agrees to indemnify and hold harmless
Xxxxxx Xxxxxxx and each person, if any, who controls Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Securities Act, or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments incurred as a result of Xxxxxx Xxxxxxx'x participation as a QIU in
connection with the offering of the Common Stock, except for any losses, claims,
damages, liabilities, and judgments resulting from Xxxxxx Xxxxxxx'x, or such
controlling person's, willful misconduct.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to subsection (a), (b), (c) or (d) of this
Section 9, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
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proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for (i) all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) all Selling Shareholders and all persons, if
any, who control any Selling Shareholder within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing by
Xxxxxx Xxxxxxx. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such controlling persons of Selling Shareholders,
such firm shall be designated in writing by the Selling Shareholders selling a
majority of the Selling Shareholders' Shares hereunder. Notwithstanding anything
contained herein to the contrary, if indemnity may be sought pursuant to
subsection (d) of this Section 9 in respect of such action or proceeding, then
in addition to such separate firm for the indemnified parties, the indemnifying
party shall be liable for the reasonable fees and expenses of not more than one
separate firm (in addition to any local counsel) for Xxxxxx Xxxxxxx in its
capacity as a QIU and all persons, if any, who control Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this subsection,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid, request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(f) To the extent the indemnification provided for in
subsection (a), (b), (c) or (d) of this Section 9 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
subsection, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits
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received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Sellers
on the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by each Seller and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of a Seller and of the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such Seller or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 9
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint. In no event shall the liability of a Selling
Shareholder under this Section 9(f) exceed the amount that such Selling
Shareholder would have been required to pay under Section 9(b) had such
indemnification been held to be available thereunder.
(g) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in subsection (f) of this Section 9.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in subsection (f) of this Section 9
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
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(h) The indemnity and contribution provisions contained in
this Section 9 and the representations and warranties and other statements of
the Company and the Selling Shareholders contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, any Selling Shareholder
or any person controlling any Selling Shareholder, or the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
10. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
NASD, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event singly or together with any other such event makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Original Registration Statement by the Commission.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such nondefaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date or the Option Closing Date,
as the case may be, any Underwriter or Underwriters shall fail or refuse to
purchase Shares and the aggregate number
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of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date or the Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by the
laws of the State of New York.
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14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
STEEL DYNAMICS, INC.
By __________________________________
Name:
Title:
The Selling Shareholders named in
Schedules III and IV hereto, acting
severally
By __________________________________
Attorney-in-Fact
Name:
Title:
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Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
PAINEWEBBER INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXXX & COMPANY SECURITIES, INC.
SALOMON BROTHERS INC
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By_____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXXX & COMPANY SECURITIES, INC.
SALOMON BROTHERS INTERNATIONAL LIMITED
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By Xxxxxx Xxxxxxx & Co.
International Limited
By_____________________________________
Name:
Title:
26
SCHEDULE I
U.S. Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
XxXxxxxx & Company Securities, Inc.
Salomon Brothers Inc
--------------
Total U.S. Firm Shares
==============
27
SCHEDULE II
International Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited
PaineWebber International (U.K.) Ltd.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
XxXxxxxx & Company Securities, Inc.
Salomon Brothers International Limited
---------------
Total International Firm Shares.................................
===============
28
SCHEDULE III
Firm Selling Shareholders
Number of
Firm Shares
Firm Selling Shareholder To Be Sold
------------------------ ----------
----------
Total.............................................................
==========
29
SCHEDULE IV
Option Selling Shareholders
Number of
Additional
Option Selling Shareholder Shares To Be Sold
-------------------------- -----------------
------------
Total........................................................
============
30
EXHIBIT A
Pursuant to Section 6(d) of the Underwriting Agreement,
Xxxxxxx & XxXxxxx, counsel for the Company, shall furnish an opinion to the
effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries taken as a whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Company Shares have been duly authorized and are validly issued,
fully paid and non-assessable;
(v) the Company Shares and the Additional Shares to be sold
by the Company have been duly authorized and, when issued and delivered
in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights;
(vi) the Underwriting Agreement and each of the Irrevocable
Power of Attorney and Custody Agreements (collectively, the "Power of
Attorney and Custody Agreements"), each dated the date hereof, by each
Selling Shareholder and the Company as Custodian, appointing certain
individuals as the Selling Shareholders' attorneys-in-fact to the
extent set forth therein relating to the transactions contemplated
hereby and by the Registration Statement have been duly authorized,
executed and delivered by the Company;
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(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Power of Attorney and Custody Agreements, and the
issuance and delivery of the Company Shares and the Additional Shares
to be sold by the Company will not contravene any provision of
applicable law or the articles of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or, to the best of such counsel's knowledge, any judgment, or decree of
any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under
the Underwriting Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares;
(viii) the statements (1) in the Prospectus under the captions
"Certain Transactions", "Description of Certain Indebtedness",
"Description of Capital Stock," "Certain United States Federal Tax
Consequences For Non-United States Holders" and "Underwriters" and (2)
in the Registration Statement in Items 14 and 15, in each case insofar
as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required;
(x) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xi) such counsel (1) is of the opinion that the
Registration Statement and Prospectus (except for financial statements
and schedules included therein as to which such counsel need not
express any opinion) comply as to form in all material respects with
the Securities Act and the rules and regulations of the Commission
thereunder, (2) has no reason to believe that (except for financial
statements and schedules as to which such counsel need not express any
belief) the Registration Statement and the
32
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prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (3) has no
reason to believe that (except for financial statements and schedules
as to which such counsel need not express any belief) the Prospectus
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and
(xii) each of the Company and its subsidiaries has all
necessary certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and has made all declarations and
filings with, all federal, state and local governmental authorities,
all self-regulatory organizations and all courts and tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, nor is the Company or any of its subsidiaries in violation
of, or in default under, any federal, state and local law, regulation,
rule, decree, order or judgment applicable to the Company or any of its
subsidiaries the effect of which, singly or in the aggregate, would
have a material adverse effect on the prospects, condition, financial
or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in the
Prospectus.
With respect to subsection (xi) above, such counsel may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
