EXHIBIT 1.1
[________] SHARES
WESTLAKE CHEMICAL CORPORATION
COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
August __, 2004
CREDIT SUISSE FIRST BOSTON LLC
X.X. XXXXXX SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
As Representatives of the
Several Underwriters (the "REPRESENTATIVES"),
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Westlake Chemical Corporation, a Delaware corporation
(the "COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "UNDERWRITERS") [____] shares of its common stock, par
value $0.01 per share (the "SECURITIES" and, such [_____] shares of Securities
being hereinafter referred to as the "FIRM SECURITIES"). The Company also
proposes to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than [___] additional outstanding shares of the Company's
Securities, as set forth below (such additional shares being hereinafter
referred to as the "OPTIONAL Securities"). The Firm Securities and the Optional
Securities are herein collectively called the "OFFERED SECURITIES". As part of
the offering contemplated by this Agreement, Deutsche Bank Securities Inc. (the
"DESIGNATED UNDERWRITER") has agreed to reserve out of the Firm Securities
purchased by it under this Agreement, up to [__________] shares, for sale to the
Company's directors, officers, employees and other parties associated with the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus (as
defined herein) under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM").
The Firm Securities to be sold by the Designated Underwriter pursuant to the
Directed Share Program (the "DIRECTED SHARES") will be sold by the Designated
Underwriter pursuant to this Agreement at the public offering price. The
Designated Underwriter that manages the Directed Share Program will receive 100%
of the discounts and commissions associated with the Directed Shares. Any
Directed Shares not subscribed for by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus. The Company hereby agrees with the several Underwriters
as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-115790) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (A)
has been declared effective under the Securities Act of 1933 ("ACT")
and is not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
(the "INITIAL REGISTRATION STATEMENT") has been declared effective,
either (A) an additional registration statement (the "ADDITIONAL
REGISTRATION STATEMENT") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("RULE 462(b)")
under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement
and, if applicable, the additional registration statement or (B) such
an additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Offered
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Securities will all have been duly registered under the Act pursuant to
the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("RULE 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "EFFECTIVE TIME" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised the Representatives that
it does not propose to amend such registration statement, the date and
time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution
and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c),
or (B) if the Company has advised the Representatives that it proposes
to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "EFFECTIVE TIME" with
respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). The "EFFECTIVE DATE" with respect to
the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional registration
statement pursuant to the General Instructions of the Form on which it
is filed and including all information (if any) deemed to be a part of
the initial registration statement as of its Effective Time pursuant to
Rule 430A(b) ("RULE 430A(b)") under the Act, is hereinafter referred to
as the "INITIAL REGISTRATION STATEMENT". The additional registration
statement, as amended at its Effective Time, including the contents of
the initial registration statement incorporated by reference therein
and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "ADDITIONAL
REGISTRATION STATEMENT". The Initial Registration Statement and the
Additional Registration Statement are hereinafter referred to
collectively as the "REGISTRATION STATEMENTS" and individually as a
"REGISTRATION STATEMENT". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("RULE 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "PROSPECTUS". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("RULES AND REGULATIONS") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (C) on
the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to
the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Additional Registration Statement in which
the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all material respects to the requirements
of the Act and the Rules and Regulations, and none of such documents
includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated
therein or
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necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and no
Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing would not, individually or in the aggregate, have a material
adverse effect on the current or future condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
(d) Each subsidiary of the Company has been duly incorporated
or formed and is an existing corporation or other entity in good
standing under the laws of the jurisdiction of its incorporation or
organization, with power and authority (corporate and other
organizational) to own its properties and conduct its business as
described in the Prospectus; and each subsidiary of the Company is duly
qualified to do business as a foreign corporation or other entity in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and the capital stock of each
subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects, except to the extent
(i) such capital stock is subject to a lien or encumbrance in
connection with the Indenture dated as of July 31, 2003 by and among
the Company, the guarantors named therein and JPMorgan Chase Bank, as
trustee, relating to the 8 3/4% senior notes due 2011, the Credit
Agreement dated as of July 31, 2003 by and among the Company, certain
of its subsidiaries, the lenders party thereto and Bank of America,
N.A., as agent, relating to a $200 million senior secured revolving
credit facility and the Credit Agreement dated as of July 31, 2003 by
and among the Company, certain of its subsidiaries, the lenders party
thereto and Bank of America, N.A., as agent, relating to a $120 million
senior secured term loan (collectively, the "DEBT AGREEMENTS") or (ii)
that any failure of such capital stock to be free from liens and
encumbrances would not, individually or in the aggregate, have a
Material Adverse Effect.
(e) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(f) Except as disclosed in the Prospectus, and except for the
consulting agreement of Avi Xxxx LLC with the Company dated March 31,
2004 (the "CONSULTING AGREEMENT"), there are no contracts, agreements
or understandings between the Company and any person that would give
rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with the sale of the Offered Securities.
(g) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be
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owned by such person or to require the Company to include such
securities in the securities registered pursuant to a Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act that have not
been validly waived or satisfied prior to the date hereof.
(h) The Securities have been approved for listing, subject to
notice of issuance, on The New York Stock Exchange.
(i) No consent, approval, authorization, or order of, or
filing with, any governmental agency of the United States or body or
any court with jurisdiction in the United States is required to be
obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale
of the Offered Securities, except such as have been obtained and made
or will be obtained and made prior to the date hereof under the Act
(provided, however, a filing with the Commission pursuant to Rule
424(b) may be made after the date hereof so long as such filing is made
within the time period specified in the applicable provision of such
rule ) and such as may be required under state securities or blue sky
laws.
(j) The execution, delivery and performance of this Agreement
by the Company, and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under,
(A) any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction
over the Company or any subsidiary of the Company or any of their
properties, or (B) any agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or (C) the charter or by-laws or other
organizational documents of the Company or any such subsidiary, other
than, in the case of clauses (A) or (B) above, such conflicts,
breaches, violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) Except as disclosed in the Prospectus, the Company and
each of its subsidiaries has (A) good and indefeasible title to (in the
case of fee interests in real property), (B) valid leasehold interests
in (in the case of leasehold interests in real or personal property)
and (C) valid title to (in the case of all other personal property),
all of its respective properties and assets reflected in the Company's
consolidated financial statements included in the Registration
Statement and the Prospectus free and clear of all liens, encumbrances
and defects, except for such failures to have such title to or
interests in, and for such liens, encumbrances and defects, as would
not, individually or in the aggregate, have a Material Adverse Effect.
(m) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them, except as would not, individually or in the aggregate, have a
Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate, have a Material Adverse Effect.
(n) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
would reasonably be expected to have a Material Adverse Effect.
(o) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business now
operated by them, or presently employed by them, except as would not,
individually or in the aggregate, have a Material Adverse Effect, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
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(p) Except as disclosed in the Prospectus, and except for such
matters as would not, individually or in the aggregate, have a Material
Adverse Effect or be required to be disclosed in the Prospectus by the
Commission pursuant to the Rules and Regulations, the Company and its
subsidiaries (or, to the knowledge of the Company, any other entity for
whose acts or omissions the Company is or may be liable) (1) are
conducting and have conducted their businesses, operations and
facilities in compliance with Environmental Laws (as defined below);
(2) possess and maintain in full force and effect any and all permits,
licenses or registrations required under Environmental Law for the
conduct of their businesses ("ENVIRONMENTAL PERMITS"); (3) have not,
pursuant to any contract, assumed responsibility to cure any currently
identified material liability under Environmental Law or to remediate
any currently identified Hazardous Substances (as defined below) spill
or release; (4) have not received any notice from a governmental
authority or any other third party alleging any violation of
Environmental Law or liability thereunder (including, without
limitation, liability as a "potentially responsible party" and/or for
costs of investigating or remediating sites containing Hazardous
Substances and/or damages to natural resources); (5) are not subject to
any pending or, to the knowledge of the Company, threatened claim or
other legal proceeding under any Environmental Laws against the Company
or its subsidiaries; (6) do not have knowledge of any pending
Environmental Law, or any unsatisfied condition in an Environmental
Permit, or any release of Hazardous Substances that, individually or in
the aggregate, can reasonably be expected to require any material
capital expenditures to maintain the Company's or the subsidiaries'
compliance with Environmental Law or with their Environmental Permits;
and (7) does not (A) rely on any third party for an indemnity for, or
the contractual assumption of, any material remediation obligation or
liability under Environmental Law and (B) have reasonable cause to
believe that such third party will default in its obligation to comply
with such indemnity or contractual assumption. As used in this
paragraph, "ENVIRONMENTAL LAWS" means any and all applicable federal,
state, local, and foreign laws, statutes, ordinances, rules,
regulations, requirements and common law, or any enforceable
administrative or judicial interpretation, order, consent, decree or
judgment thereof, relating to pollution or the protection of human
health or the environment, including, without limitation, those
relating to, regulating, or imposing liability or standards of conduct
concerning (i) noise or odor, (ii) emissions, discharges, releases or
threatened releases of Hazardous Substances into ambient air, surface
water, groundwater or land, (iii) the generation, manufacture,
processing, distribution, use, treatment, storage, disposal, release,
transport or handling of, or exposure to, Hazardous Substances, (iv)
the protection of wildlife or endangered or threatened species, or (v)
the investigation, remediation or cleanup of, or exposure to, any
Hazardous Substances. As used in this paragraph, "HAZARDOUS SUBSTANCES"
means pollutants, contaminants or hazardous, dangerous or toxic
substances, materials, constituents or wastes or petroleum, petroleum
products and their breakdown constituents, or any other chemical
substance regulated under Environmental Laws.
(q) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated.
(r) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States ("GAAP")
applied on a consistent basis; all non-GAAP financial information
included in each Registration Statement complies with the requirements
of Item 10 of Regulation S-K under the Act and the assumptions used in
preparing the columns titled "As Adjusted for the Exchange" and "As
Further Adjusted for the Offering" included under the caption
"Capitalization" in the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to
5
the transactions or events described therein, and the related
adjustments in such columns give appropriate effect to those
assumptions and reflect the proper application of those adjustments to
the corresponding historical financial statement amounts.
(s) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(t) As of the date hereof, the Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "EXCHANGE ACT") and files reports
with the Commission on the Electronic Data Gathering, Analysis, and
Retrieval (XXXXX) system.
(u) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(v) No relationship, direct or indirect, required to be
described under Item 404 of Regulation S-K under the Act, exists
between or among the Company on the one hand, and the directors,
officers or stockholders of the Company on the other hand, which is not
described in the Registration Statement and Prospectus.
(w) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof, except where the failure to so file such
returns would not, individually or in the aggregate, have a Material
Adverse Effect, and have paid all taxes due thereon, and other than tax
deficiencies which the Company or any of its subsidiaries is contesting
in good faith and for which adequate reserves have been provided in
accordance with generally accepted accounting principles, there is no
tax deficiency that has been asserted against the Company or any of its
subsidiaries that would, individually or in the aggregate, have a
Material Adverse Effect.
(x) Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
unlawful stabilization or manipulation of the price of any security of
the Company in connection with the offering of the Offered Securities.
(y) The market-related and customer-related data and estimates
included in the Registration Statement and Prospectus are based on or
derived from sources which the Company reasonably believes to be
reliable.
(z) PricewaterhouseCoopers LLP who have certified certain
financial statements of the Company and its subsidiaries are
independent public accountants as contemplated by the Securities Act
and the rules and regulations of the SEC thereunder.
(aa) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorization; and (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets.
(bb) The Company and its subsidiaries maintain disclosure
controls and procedures (as defined in Rule 13a-14 of the Exchange Act)
designed to ensure that information required to be disclosed by the
Company, including its consolidated subsidiaries, in the reports that
it files or submits under the Exchange Act is recorded, processed,
summarized and reported in accordance with the Exchange Act and the
rules and regulations thereunder. The Company has carried out
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evaluations, under the supervision and with the participation of the
Company's management, of the effectiveness of the design and operation
of the Company's disclosure controls and procedures in accordance with
Rule 13a-15 of the Exchange Act.
(cc) The merger of Gulf Polymer & Petrochemical, Inc. with and
into the Company, the merger of Westlake Polymer & Petrochemical, Inc.
with and into the Company and the other transactions described in the
Prospectus under the caption "The Transactions" have been consummated.
(dd) TTWF LP owns 100% of the issued and outstanding
Securities of the Company.
(ee) The Registration Statement, the Prospectus and any
preliminary prospectus comply in all material respects, and any further
amendments or supplements thereto will comply in all material respects,
with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the
Directed Share Program, and no authorization, approval, consent,
license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as
have been obtained or will be obtained prior to the date hereof
(provided, however, supplemental filings with the Kanto Local Finance
Bureau, Ministry of Finance Japan ("MOF") may be made after the date
hereof so long as such filings are made within the time periods
specified by the rules and regulations of the MoF), is necessary under
the securities law and regulations of foreign jurisdictions in which
the Directed Shares are offered outside the United States.
(ff) The Company has not offered, or caused the Underwriters
to offer, any Offered Securities to any person pursuant to the Directed
Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information
about the Company or its products.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $[___] per share, the number of Firm
Securities set forth below the caption "Number of Firm Securities to be Sold by
the Company" and opposite the name of such Underwriter in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to the Representatives drawn to the order of the
Company in the case of the Firm Securities at the office of Xxxxx Xxxxx L.L.P.,
000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, at 9:00 A.M., New York time, on August
[__], 2004, or at such other time not later than seven full business days
thereafter as the Representatives and the Company determine, such time being
herein referred to as the "FIRST CLOSING DATE". For purposes of Rule 15c6-1
under the Exchange Act, the First Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds
and delivery of securities for all the Offered Securities sold pursuant to the
offering. The certificates for the Firm Securities so to be delivered will be in
definitive form, in such denominations and registered in such names as the
Representatives request and will be made available for checking and packaging at
the above office of Xxxxx Xxxxx L.L.P. at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from the Representatives given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased from the Company for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name bears to the total number of Firm Securities in
Schedule A hereto (subject to adjustment by the Representatives to eliminate
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fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Representatives to the
Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representatives but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. At least
two full business days prior to the Optional Closing Date, the Company will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to the
Representatives drawn to the order of the Company, at the office of Xxxxx Xxxxx
L.L.P., 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000. The certificates for the
Optional Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as the
Representatives request upon reasonable notice prior to such Optional Closing
Date and will be made available for checking and packaging at the above office
of Xxxxx Xxxxx L.L.P. at a reasonable time in advance of such Optional Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by the Representatives, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise the Representatives promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement and an additional registration statement is necessary
to register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by the Representatives.
(b) The Company will advise the Representatives promptly of
any proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplement without the Representatives' consent (which shall not be
unreasonably withheld); and the Company will also advise the
Representatives promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplement of a
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of a Registration
Statement and will use reasonable best efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the
8
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify the Representatives of
such event and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (four of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Offered Securities is required to
be delivered under the Act in connection with sales by any Underwriter
or dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as the Representatives
reasonably request. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other such documents shall be
so furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will use its reasonable best efforts to
arrange for the qualification of the Offered Securities for sale under
the laws of such jurisdictions as the Representatives reasonably
request and will continue such qualifications in effect so long as
required for the distribution of the Offered Securities, provided that
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction.
(g) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act (other than a registration statement on Form S-8) relating to,
any additional shares of the Securities or securities convertible into
or exchangeable or exercisable for any shares of the Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Representatives, except grants of employee stock options pursuant to
the terms of a plan in effect on the date hereof, issuances of
Securities pursuant to the exercise of such options or the exercise of
any other employee stock options outstanding on the date hereof or
issuances of Securities pursuant to the Company's dividend reinvestment
plan.
(h) The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the
obligations of the Company under this Agreement (including, without
limitation, fees of the Company's counsel, accounting fees and fees
related to the listing of the Offered Securities on the New York Stock
Exchange), for any filing fees and other expenses (including fees and
disbursements of counsel) in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the
Representatives designate and the printing of memoranda relating
thereto, for the filing fee incident to the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for
any travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities
including 50% of the cost of any aircraft chartered in connection with
attending or hosting such meetings and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
9
amendments and supplements thereto) to the Underwriters; provided that
the Underwriters shall, severally and not jointly, reimburse the
Company for out-of-pocket expenses actually incurred by the Company
under this subsection (h) in connection with the offering of the
Offered Securities, in an aggregate amount not to exceed $1.5 million.
(i) The Designated Underwriter will pay all fees and
disbursements of counsel incurred by the Underwriters in connection
with the Directed Share Program and stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program.
Furthermore, the Company covenants with the Underwriters that
the Company will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed
Share Program.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of PricewaterhouseCoopers LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 100, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements
included in the Registration Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or
10
net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(C) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year, in
consolidated net sales or net operating income in the
total or per share amounts of consolidated net
income;
except in all cases set forth in clauses B and C above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "REGISTRATION STATEMENTS" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statements is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "REGISTRATION Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "PROSPECTUS" shall mean the prospectus
included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by the Representatives. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by the Representatives. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole which, in the
reasonable judgment of a majority in interest of the Underwriters
including the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its
11
rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
change in U.S. or international financial, political or economic
conditions or currency exchange rates or exchange controls as would, in
the reasonable judgment of a majority in interest of the Underwriters
including the Representatives, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange; (v) any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (vi) any
banking moratorium declared by U.S. Federal or New York authorities;
(vii) any major disruption of settlements of securities or clearance
services in the United States or (viii) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the reasonable judgment of a
majority in interest of the Underwriters including the Representatives,
the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of, delivery and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxx Xxxxx L.L.P., counsel for the Company, to
the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) The Offered Securities delivered on such Closing
Date and all other outstanding shares of the Common Stock of
the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights under the charters or
bylaws of the Company, the Delaware General Corporation Law
or, to the best of the knowledge of such counsel, any other
agreement or instrument to which the Company is a party, with
respect to the Securities;
(iii) Except as described in the Prospectus, there
are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act that have not
been validly waived or satisfied prior to the date hereof;
(iv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended;
(v) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required to be obtained or made by the Company for the
consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered
Securities, except such as have been obtained and made under
the Act, such consents, approvals or filings as may be
required by or with the NASD (as to which such counsel need
express no opinion) and such as may be required under state
securities or blue sky laws (as to which such counsel need
express no opinion);
(vi) The execution, delivery and performance of this
Agreement and the sale of the Offered Securities will not
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (A)
any statute, rule or regulation of,
or order of any governmental agency or body or any court
having jurisdiction in, the United States, the State of Texas
or the State of New York, and the Delaware General Corporation
Law (provided, however, that such counsel need express no
opinion with respect to compliance with any state securities
or antifraud law, rule or regulation), (B) any agreement or
instrument listed as an exhibit to the Registration Statement
or the Asset Purchase Agreement, dated as of June 30, 2004, by
and between North American Bristol Corporation and Bristolpipe
Corporation (collectively, the "MATERIAL AGREEMENTS"), or (C)
the charter or by-laws of the Company, other than, in the case
of clauses (A) or (B) above, such conflicts, breaches,
violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company;
(viii) Based on certain assumptions set forth
therein, statements of legal conclusion set forth in the
Prospectus under the caption "Material United States Federal
Income Tax Consequences to Non-United States Holders" are such
counsel's opinion; the statements contained in the Prospectus
under the caption "Description of Certain Indebtedness"
insofar as they purport to constitute a summary of the terms
of certain indebtedness of the Company, accurately summarize
in all material respects the terms of the indebtedness; and
the statements contained in the Prospectus under the caption
"Description of Capital Stock" insofar as they purport to
constitute a summary of the Securities, accurately summarize
in all material respects the terms of the Securities;
(ix) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and
each Registration Statement and the Prospectus (other than the
financial statements and schedules, the notes thereto and the
auditors' report thereon and other financial and accounting
data included therein, or omitted therefrom, as to which such
counsel need express no opinion), and each amendment or
supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; and
Such counsel shall also include, in a separate
paragraph of its opinion, statements to the following effect:
such counsel has participated in conferences with officers and
other representatives of the Company, with representatives of
the independent accountants of the Company, with
representatives of and counsel for the Underwriters, at which
the contents of the Registration Statement and the Prospectus
were discussed, and although such counsel did not
independently verify such information, and is not passing upon
and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except to the extent set
forth in paragraphs (ii) and (viii) above), on the basis of
the foregoing, no facts have come to such counsel's attention
that lead such counsel to believe that (A) the Registration
Statement (other than the financial statements and schedules,
the notes thereto and the auditors' reports thereon and the
other financial and accounting data included therein or
omitted therefrom, as to which such counsel has not been asked
to comment) as of its effective date or as of the Closing Date
included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein not misleading, and (B) the Prospectus or
any amendments thereto (other than the financial statements
and schedules, the notes thereto and the auditors' reports
thereon and the other financial and accounting data
13
included therein or omitted therefrom, as to which such
counsel has not been asked to comment) as of its effective
date or as of the Closing Date included an untrue statement of
a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made not misleading.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxxx Xxxxxxx, Vice President and General
Counsel of the Company, to the effect that:
(i) The Company is duly qualified to do business as a
foreign corporation in good standing in all jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure
to be so qualified or in good standing would not, individually
or in the aggregate, have a Material Adverse Effect;
(ii) Each subsidiary of the Company listed on Exhibit
A hereto has been duly incorporated or formed and is an
existing corporation or other entity in good standing under
the laws of the jurisdiction of its incorporation, with power
and authority (corporate and other organizational) to own its
properties and conduct its business as described in the
Prospectus; and each subsidiary listed on Exhibit A hereto is
duly qualified to do business as a foreign corporation or
other entity in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure
to be so qualified or in good standing would not, individually
or in the aggregate, have a Material Adverse Effect; all of
the issued and outstanding capital stock or limited
partnership interests, as applicable, of each subsidiary of
the Company has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock or limited
partnership interests, as applicable, of each subsidiary owned
by the Company, directly or through subsidiaries, is owned
free from liens and encumbrances, except to the extent that
(i) such capital stock or limited partnership interest is
subject to a lien or encumbrance in connection with the Debt
Agreements or (ii) any failure of such capital stock or
limited partnership interests to be free from liens and
encumbrances would not, individually or in the aggregate, have
a Material Adverse Effect; and
(iii) The execution, delivery and performance of this
Agreement will not result in (A) a breach or violation of any
of the terms and provisions of, or constitute a default under,
the charter or by-laws or other organizational documents of
any subsidiary of the Company, or (B) any agreement or
instrument to which the Company or any subsidiary is a party
or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such
subsidiary is subject (excluding the Material Agreements, as
to which such counsel need express no opinion), other than, in
the case of clause (B) above, such conflicts, breaches,
violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect.
Such counsel shall also include, in a separate paragraph of
its opinion, statements to the following effect: such counsel has
participated in conferences with officers and other representatives of
the Company, with representatives of the independent accountants of the
Company, with representatives of and counsel for the Underwriters, at
which the contents of the Registration Statement and the Prospectus
were discussed, and although such counsel did not independently verify
such information, and is not passing upon and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus or any
amendment thereto, on the basis of the foregoing, no facts have come to
such counsel's attention that lead such counsel to believe that (A) the
Registration Statement (other than the financial statements and
schedules, the notes thereto and the auditors' reports thereon and the
other financial and accounting data included therein or omitted
therefrom, as to which such counsel has not been asked to comment) as
of its effective date or as of the Closing Date included an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein not misleading, and
(B) the Prospectus or any amendment thereto (other than the financial
statements and schedules, the notes thereto and the auditors' reports
thereon and the other financial and accounting data included therein or
14
omitted therefrom, as to which such counsel has not been asked to
comment) as of its effective date or as of the Closing Date included an
untrue statement of a material fact or omitted 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.
(f) The Representatives shall have received from Xxxxxx &
Xxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter; and, subsequent to the
date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries, taken as a whole, except as set forth
in the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated
such Closing Date, of PricewaterhouseCoopers LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to such Closing Date for the purposes of this
subsection.
(i) On or prior to the date of this Agreement, the
Representatives shall have received a lockup letter substantially in
the form of Exhibit B hereto from Westlake Polymer & Petrochemical,
Inc. and TTWF LP.
(j) On or prior to the date of this Agreement, the
Representatives shall have received lockup letters from each of the
executive officers and directors of the Company who own, or as a result
of the offering of the Offered Securities will own, any Securities.
(k) No Underwriter shall have received notice of an adverse
claim on the Offered Securities within the meaning of Section 8-102 of
the Uniform Commercial Code.
(l) Any and all amounts payable to Avi Xxxx LLC under the
Consulting Agreement shall have been paid by the Company, and the
Representatives shall have received written confirmation of any such
payments.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Representatives may in their discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors and officers
and each person, if any who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
15
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus if the Company had previously furnished copies thereof to such
Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "DESIGNATED ENTITIES"), 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) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program 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; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting" and the information contained in the
eighth paragraph under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under subsection (a) or (b) above except to
the extent that it has been materially prejudiced (through the forfeiture
16
of substantive rights or defenses) by such failure; and provided further that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above, except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights and defenses) by such
failure. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action 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 an indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
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 Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), 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
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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
17
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
the Representatives and the Company for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 9 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder,
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section
6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or faxed and confirmed to
the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Transactions Advisory Group (fax: (212)
000-0000), or, if sent to the Company, will be mailed, delivered or faxed and
confirmed to it at 0000 Xxxx Xxx Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, Attention:
General Counsel (fax (000) 000-0000); provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or faxed and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFB (provided, however, CSFB will not take any such action without obtaining
the consent of the other Representatives) will be binding upon all the
Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
18
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
19
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
WESTLAKE CHEMICAL CORPORATION
By
-------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON LLC
X.X. XXXXXX SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
Acting on behalf of themselves and as the
Representatives of the
several Underwriters.
By CREDIT SUISSE FIRST BOSTON LLC
By
-------------------------
Name:
Title:
By X.X. XXXXXX SECURITIES INC.
By
-------------------------
Name:
Title:
By DEUTSCHE BANK SECURITIES INC.
By
-------------------------
Name:
Title:
SCHEDULE A
NUMBER OF FIRM SECURITIES
UNDERWRITER TO BE SOLD BY THE COMPANY
----------- -------------------------
Credit Suisse First Boston LLC...............................
X.X. Xxxxxx Securities Inc...................................
Deutsche Bank Securities Inc. (other than Directed Shares)...
Deutsche Bank Securities Inc. (Directed Shares)..............
Banc of America Securities LLC...............................
Xxxxxxx, Sachs & Co. ........................................
UBS Securities LLC ..........................................
-------------------------
Total.............................
=========================
EXHIBIT A
MATERIAL SUBSIDIARIES
NORTH AMERICAN BRISTOL CORPORATION
NORTH AMERICAN PIPE CORPORATION
WESTLAKE STYRENE XX
XXXXXXXX POLYMERS LP
WPT LP
WESTECH BUILDING PRODUCTS, INC.
WESTLAKE PETROCHEMICALS XX
XXXXXXXX PVC CORPORATION
WESTLAKE VINYLS, INC.
EXHIBIT B
FORM OF LOCKUP LETTER
____, 2004
Westlake Chemical Corporation
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
Deutsche Bank Securities Inc.
As Representatives of the Several Underwriters
c/o Credit Suisse First Boston LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
As an inducement to the Underwriters to execute the
Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in the establishment of a public market for common stock (the "SECURITIES") of
Westlake Chemical Corporation, a Delaware corporation, and any successor (by
merger or otherwise) thereto (the "COMPANY"), the undersigned hereby agrees that
from the date hereof and until 180 days after the public offering date set forth
on the final prospectus used to sell the Securities (the "PUBLIC OFFERING DATE")
pursuant to the
Underwriting Agreement, to which you are or expect to become
parties, the undersigned will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Securities or securities
convertible into or exchangeable or exercisable for any Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent the Representatives. In addition, the undersigned agrees that, without
the prior written consent of the Representatives, it will not, during the period
commencing on the date hereof and ending 180 days after the Public Offering
Date, make any demand for or exercise any right with respect to, the
registration of any Securities or any security convertible into or exercisable
or exchangeable for the Securities.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
the undersigned in the open market will not be subject to this Agreement. A
transfer of Securities to a family member or trust may be made, provided the
transferee agrees to be bound in writing by the terms of this Agreement prior to
such transfer and such transfer shall not involve a disposition for value.
[FOR PURPOSES OF THE LOCKUP LETTER EXECUTED BY WESTLAKE POLYMER &
PETROCHEMICAL, INC. BUT NOT FOR ANY OTHER LOCKUP LETTERS (INCLUDING THE LOCKUP
LETTER EXECUTED BY TTWF LP), THE FOLLOWING LANGUAGE MAY BE INCLUDED: For the
avoidance of doubt, this lockup letter will not apply to any of the transactions
described in the Prospectus under the caption "The Transactions."]
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if (i) the Public Offering Date shall not
have occurred on or before October 31, 2004, (ii) the
Underwriting Agreement is
terminated in accordance with its terms or (iii) prior to the execution and
delivery of the
Underwriting Agreement, the Company notifies you in writing that
it has abandoned the offering of the Securities.
Very truly yours,
