Shares of Common Stock
LONE STAR TECHNOLOGIES, INC.
UNDERWRITING AGREEMENT
May 2, 2001
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Lone Star Technologies, Inc., a corporation organized and existing under
the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to you (the "Underwriter") 1,000,000
shares (the "Company Firm Shares") of its common stock, par value $1.00 per
share (the "Common Stock"), and Alpine Capital, L.P., a Texas limited
partnership (the "Selling Stockholder"), proposes, subject to the terms and
conditions stated herein, to sell to the Underwriter 500,000 shares of Common
Stock (the "Selling Stockholder Firm Shares" and, collectively, with the Company
Shares, the "Firm Shares"). The Company and the Selling Stockholder propose
severally to sell, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of the Underwriter,
up to an additional 150,000 shares and 75,000 shares, respectively (the
"Additional Shares"), of Common Stock. The Firm Shares and any Additional Shares
purchased by the Underwriter are referred to herein as the "Shares." The Shares
are more fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, and may have filed an amendment or
amendments thereto, on Form S-3 (No. 333-41130), for the registration of the
Shares under the Securities Act of 1933, as amended (the "Act"). Such
registration statement, including the prospectus, financial statements and
schedules, exhibits and all other documents filed as a part thereof, as amended
at the time of effectiveness of the registration statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A of the Rules and Regulations of the Commission
under the Act (the "Regulations"), is herein called the "Registration Statement"
and the prospectus covering the Common Stock as supplemented by any specifically
applicable supplement relating to the sale of the Shares, in the form first
issued
to confirm sales of the Shares, is herein called the "Prospectus." The term
"preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 of the Regulations. Any reference herein to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the
effective date of the Registration Statement, the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, which is incorporated therein by reference
and (ii) any such document so filed.
(b) At the time of the effectiveness of the Registration Statement or
the effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
of the Regulations, when any supplement to or amendment of the Prospectus is
filed with the Commission, when any document filed under the Exchange Act is
filed and at the Closing Date and the Additional Closing Date, if any (as
hereinafter respectively defined), the Registration Statement and the Prospectus
and any amendments thereof and supplements thereto complied or will comply in
all material respects with the applicable provisions of the Act and the
Regulations and the Exchange Act and the respective rules and regulations
thereunder and do not or will not contain an untrue statement of a material fact
and do not or will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein (i) in the case of
the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances under which they were made, not
misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under which they were made not misleading.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter as herein stated expressly for use in connection with the
preparation thereof.
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(c) Xxxxxx Xxxxxxxx LLP, the accounting firm that audited the financial
statements and supplemental schedules of the Company and Fintube Limited
Partnership included in the Registration Statement, is an independent public
accountant as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no material adverse
change or any development involving a prospective material adverse change in the
business, properties, operations, condition (financial or other) or results of
operations of the Company and the Subsidiaries (as hereinafter defined) taken as
a whole, whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in the
Registration Statement and the Prospectus, neither the Company nor any of the
Subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and the Subsidiaries taken as a
whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus.
(e) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission or by the state securities or Blue Sky authority of any jurisdiction.
No order preventing or suspending the use of Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission or by the state securities or Blue Sky
authority of any jurisdiction.
(f) The Company has timely filed all reports, contracts or documents
required to be filed with the Commission under the Exchange Act and the rules
and regulations thereunder.
(g) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company, and this Agreement has been duly and
validly executed and delivered by the Company.
(h) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to any material agreement, instrument,
franchise, license or permit to which the Company or any of the Subsidiaries is
a party or by which any of such corporations or their respective properties or
assets may be bound or (ii) violate or conflict with any provision of the
certificate or articles of incorporation or by-laws of the Company or any of the
Subsidiaries or any judgment, decree, order, statute, rule or regulation of any
court or
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any public, governmental or regulatory agency or body having jurisdiction
over the Company or any of the Subsidiaries or any of their respective
properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court
or any public, governmental or regulatory agency or body having jurisdiction
over the Company or any of the Subsidiaries or any of their respective
properties or assets is required for the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated
hereby, including the issuance, sale and delivery of the Shares to be issued,
sold and delivered by the Company hereunder, except the registration under
the Act of the Shares and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriter.
(i) The authorized, issued and outstanding capital stock of the Company
is set forth in the Prospectus under the caption "Capitalization." All of the
outstanding shares of Common Stock are duly and validly authorized and issued,
fully paid and non-assessable and were not issued and are not now in violation
of or subject to any preemptive rights. The Shares, when issued, delivered and
sold in accordance with this Agreement, will be duly and validly issued and
outstanding, fully paid and non-assessable and will not have been issued in
violation of or be subject to any preemptive rights. The Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions thereof contained
in the Registration Statement and the Prospectus.
(j) The only subsidiaries (as defined in Rule 405 of the Regulations) of
the Company are those listed on Exhibit 21 of the Company's Form 10-K for the
Company's fiscal year ended December 31, 2000 (the "Subsidiaries"). Each of the
Company and the Subsidiaries has been duly organized and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which in the aggregate
could not reasonably be expected to have a material adverse effect on the
Company and the Subsidiaries taken as a whole. Each of the Company and the
Subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits (collectively, the "Consents") of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, except for any Consents the nonobtainment of which
in the aggregate could not reasonably be expected to have a material adverse
effect on the Company and the Subsidiaries taken as a whole. No Consent contains
a materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(k) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of the Subsidiaries is a
party or to which any property of the Company or any of the Subsidiaries is
subject or which is pending or, to the knowledge of the Company, contemplated
against the Company or any of the Subsidiaries which could reasonably be
expected to result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and the
Subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(l) Neither the Company nor any officer, director or, to the Company's
knowledge, affiliate of the Company has taken or will take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(m) The financial statements, including the notes thereto, and
supporting schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
of the Company and the Subsidiaries as of the dates indicated and the results of
their operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The financial
information and data included in the Registration Statement and the Prospectus
present fairly the information included therein and have been prepared on a
basis consistent with that of the financial statements included or incorporated
by reference in the Registration Statement and the Prospectus and the books and
records of the respective entities presented therein. Pro forma financial
information included in the Prospectus has been prepared in accordance with the
applicable requirements of the Act and the Regulations and includes all
adjustments necessary to present fairly the pro forma financial position of the
respective entity or entities presented therein at the respective dates
indicated and the results of their operations for the respective periods
specified.
(n) Except for the Subsidiaries, the Company owns no capital stock or
other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(o) Except as described in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in connection
with the sale of the Shares contemplated hereby.
(p) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(q) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(r) The documents incorporated or deemed to be incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other
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information in the Prospectus, at the time the Registration Statement and any
amendments thereto become effective and at the Closing Date, will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(s) There are no contracts or other documents that are required to be
filed as exhibits to the Registration Statement or to the Company's Form 10-K
for the Company's fiscal year ended December 31, 2000 that have not been so
filed.
(t) The Company and each of the Subsidiaries have complied in all
material respects with all material laws, regulations and orders applicable to
each of them or their respective businesses or assets. None of the Company or
any of the Subsidiaries is in default under any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other agreement or
instrument to which any of them is a party or by which any of them or their
respective properties are bound, the violation of which would individually or in
the aggregate have a material adverse effect on the condition (financial or
other) or results of operation of the Company and the Subsidiaries taken as a
whole and no other party under any such agreement or instrument to which the
Company or any of the Subsidiaries is a party is, to the knowledge of the
Company, in default in any material respect thereunder.
(u) The Company and the Subsidiaries have filed all tax and information
returns required to be filed by them and have paid all taxes shown due on such
returns as well as all other taxes, assessments and governmental charges which
have become due, and no deficiency with respect to any such return has been
assessed or proposed.
(v) The Shares have been approved for listing on the New York Stock
Exchange subject only to notice of issuance.
(w) Except as contemplated by this Agreement, none of the Company or any
of the Subsidiaries has incurred any liability for a fee, commission or other
compensation on account of the engagement of a broker or finder in connection
with the transactions contemplated herein.
(x) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or is eminent, and the Company is not aware that any
executive, key employee or group of employees of the Company or any of the
Subsidiaries plans to terminate employment with the Company or any of the
Subsidiaries.
(y) Each Operative Document (as hereinafter defined) has been duly
authorized, executed and delivered by the Company and the Subsidiaries, as
applicable, and, to the knowledge of the Company, the other parties thereto and
constitutes the valid and binding agreement of the Company and the Subsidiaries
and, to the knowledge of the Company, the other parties thereto enforceable
against the Company and the Subsidiaries and, to the knowledge of the Company,
the other parties thereto in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws affecting the enforcement of creditors' rights generally and
to equitable principles. The execution,
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delivery and performance of the Operative Documents and the consummation of
the transactions contemplated thereby have not and will not result in a
breach or violation of any term or provision of, or constitute a default
under, (i) any law, rule or regulation, (ii) any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them is bound or to which
any property of the Company or any of the Subsidiaries is or, upon
consummation of the transactions contemplated by the Operative Documents,
will be subject or (iii) any order or decree of any court or governmental
agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties. No material consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body or any other third party is required to be
obtained or made by the Company or any of the Subsidiaries for the
consummation of the transactions contemplated by the Operative Documents
except for such consents, approvals, authorizations, orders or filings as had
been obtained or made. "Operative Documents" shall mean the contracts or
documents filed as exhibits to the Company's Form 10-K for the Company's
fiscal year ended December 31, 2000, pursuant to Item 601(b)(10) of
Regulation S-K promulgated under the Act, as such Operative Documents may be
amended or modified at or as of the effective time of the Registration
Statement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The
Selling Stockholder represents and warrants to, and agrees with, the
Underwriter that:
(a) (i) The Selling Stockholder on the Closing Date will have good and
marketable title to the Selling Stockholder Firm Shares and, if
applicable, any Additional Shares to be sold by the Selling Stockholder
hereunder and full right, power and authority to enter into this Agreement
and to sell, assign, transfer and deliver the Selling Stockholder Shares
free and clear of all voting trust arrangements, pledges, liens,
encumbrances, equities, security interests and claims; and upon the
delivery and payment for such Shares hereunder, the Underwriter will
acquire good and marketable title to such Shares, free and clear of all
voting trust arrangements, pledges, liens, encumbrances, equities,
security interests and claims.
(ii) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Selling Stockholder, and this
Agreement has been duly and validly executed and delivered by the Selling
Stockholder.
(iii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not (A)
conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Selling Stockholder pursuant to any agreement, instrument,
franchise, license or permit to which the Selling Stockholder is a party
or by which any of its properties or assets may be bound or (B) violate or
conflict with any provisions of the limited partnership agreement of the
Selling Stockholder or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency
or body
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having jurisdiction over the Selling Stockholder or any of its
properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Selling Stockholder or any of its properties or
assets is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
except the registration under the Act of the Shares, filings under the
Exchange Act resulting from the sale of the Firm Shares and the Additional
Shares, if any, and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriter.
(iv) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or
which constitutes or which might be reasonably be expected to constitute,
the stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
(v) At the time of the effectiveness of the Registration Statement
or the effectiveness of the post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant
to the Rule 424(b) of the Regulations, when any supplement to or amendment
of the Prospectus is filed with the Commission, when any document is filed
under the Exchange Act and at the Closing Date and the Additional Closing
Date, if any, the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto, insofar as they relate to the
Selling Stockholder, comply or will comply in all material respects with
the applicable provisions of the Act and the Regulations and the Exchange
Act and the respective rules and regulations thereunder and do not or will
not contain an untrue statement of a material fact and do not or will not
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein (i) in the case of the
Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances in which they were made, not
misleading. When any related preliminary prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or
pursuant to Rule 424(a) of the Regulations) and when any amendment thereof
or supplement thereto was first filed with the Commission, insofar as such
preliminary prospectus relates to the Selling Stockholder, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Act and the Regulations and the Exchange Act and the respective rules and
regulations thereunder and did not contain an untrue statement of a
material fact and did not omit to state any material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading. No representation
and warranty is made in this subsection (v), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related preliminary prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with
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information furnished in writing to the Company by or on behalf the
Underwriter as herein stated expressly for use in connection with the
preparation thereof.
(b) (i) The Selling Stockholder and the related parties listed on
SCHEDULE II agree with the Company and the Underwriter, except as provided
in this Agreement, not to sell, offer or agree to sell, grant any option
for the sale of, pledge or otherwise dispose of, directly or indirectly,
any Common Stock for a period of 90 days after this Agreement becomes
effective without the Underwriter's prior written consent. Notwithstanding
the preceding sentence, the Underwriter acknowledges that all shares of
Common Stock owned by the Selling Stockholder are held in a brokerage
margin account and are pledged to secure margin borrowings, and the
Underwriter agree that any such shares not sold to the Underwriter
hereunder may continue to be so pledged during the 90-day period described
in such sentence.
(ii) In order to document the Underwriter's compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as
amended, with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to the Underwriter prior to or on the
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company and the Selling Stockholder, severally and
not jointly, agree to sell to the Underwriter and the Underwriter agrees
to purchase from the Company and the Selling Stockholder the Shares, at a
net purchase price per share of $44.21, the Shares.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Xxxxx Xxxxxxx
& Xxxx LLP, 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or at such
other place as shall be agreed upon by the Underwriter and the Company, at
10:00 A.M. on the third or fourth business day (as permitted under Rule
15c6-1 under the Exchange Act) following the date of the effectiveness of
the Registration Statement (or, if the Company has elected to rely upon
Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the
determination of the public offering price of the Shares), or such other
time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made to
the Company and the Selling Stockholder by wire transfer in same day
funds, against delivery to the Underwriter for the account of the
Underwriter of certificates for the Shares to be purchased by it.
Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as the Underwriter may request in writing
at least two full business days prior to the Closing Date. The Underwriter
will be permitted to examine and package such certificates for delivery at
least one full business day prior to the Closing Date.
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(c) In addition, the Company and the Selling Stockholder hereby,
severally and not jointly, grant to the Underwriters the option to
purchase up to 150,000 and 75,000 Additional Shares, respectively, at the
same purchase price per share to be paid by the Underwriters to the
Company and the Selling Stockholder for the Firm Shares as set forth in
this Section 3, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised from
time to time and at any time, in whole or in part, on or before the
thirtieth day following the date of the Prospectus, by written notice by
you to the Company and the Selling Stockholder. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time, as reasonably determined by you,
when the Additional Shares are to be delivered (such date and time being
herein sometimes referred to as the "Additional Closing Date"); provided,
HOWEVER, that the Additional Closing Date shall not be earlier than the
Closing Date or earlier than the second full business day after the date
on which the option shall have been exercised nor later than the eighth
full business day after the date on which the option shall have been
exercised (unless such time and date are postponed in accordance with the
provisions of Section 10 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized
denominations as you may request in writing at least two full business
days prior to the Additional Closing Date. You will be permitted to
examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Xxxxx Xxxxxxx & Xxxx LLP, 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or such other location as may be
mutually acceptable to you and the Company, upon delivery of the
certificates for the Additional Shares to you for the respective accounts
of the Underwriters.
4. OFFERING. The Underwriter proposes to offer the Shares for sale to
the public as set forth in the
Prospectus under the caption "Underwriting."
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriter that:
(a) The Company will file the Prospectus (properly completed if Rule
430A has been used) pursuant to Rule 424(b) within the prescribed time period
and will provide evidence satisfactory to the Underwriter of such timely filing.
The Company will notify the Underwriter immediately (and, if requested
by the Underwriter, will confirm such notice in writing) (i) when the
Registration Statement and any amendments thereto become effective, (ii) of any
request by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iii) of the
mailing or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, (v) of the receipt
of any comments from the Commission, and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for
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sale in any jurisdiction or the initiation or threatening of any proceeding
for that purpose. If the Commission shall propose or enter a stop order at
any time, the Company will make every reasonable effort to prevent the
issuance of any such stop order and, if issued, to obtain the lifting of such
order as soon as possible. The Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b)) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or, so long as the prospectus delivery requirements are applicable,
file any document under the Exchange Act if such document would be deemed to
be incorporated by reference into the Prospectus to which the Underwriter
shall reasonably object in writing after being timely furnished in advance a
copy thereof.
(b) If at any time when a Prospectus relating to the Shares is required
to be delivered under the Act any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would, in the judgment of the
Underwriter or the Company, include an 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, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the Act or
the Regulations, or to file under the Exchange Act so as to comply therewith any
document incorporated by reference in the Registration Statement or the
Prospectus or in any amendment thereof or supplement thereto, the Company will
notify the Underwriter promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to the
Underwriter) which will correct such statement or omission or which will effect
such compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to the Underwriter two signed
copies of the Registration Statement, including exhibits and all documents
incorporated by reference therein and all amendments thereto, and the Company
will promptly deliver to the Underwriter such number of copies of any
preliminary prospectus, the Prospectus, the Registration Statement, all
amendments of and supplements to such documents, if any, all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, without exhibits, as the Underwriter
may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with the
Underwriter, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the securities laws
relating to the offering or sale of the Shares of such jurisdictions as the
Underwriter may designate and to maintain such qualification in effect for so
long as required for the distribution thereof; except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
-11-
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to the Underwriter as soon
as practicable, but not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the Registration
Statement occurs, an earnings statement (in form complying with the provisions
of Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(f) During the period of 90 days from the date of the Prospectus, the
Company will not, without the Underwriter's prior written consent, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, any Common Stock (or any securities convertible
into, exercisable for or exchangeable for Common Stock), and the Company will
obtain the undertaking of each of its officers and directors and such of its
stockholders as have been heretofore designated by the Underwriter and listed on
SCHEDULE I attached hereto not to engage in any of the aforementioned
transactions on their own behalf for such period of time, other than (i) the
Company's sale of Shares hereunder, (ii) the Company's granting of stock options
under its benefit plans in existence on the date hereof covering not more than
250,000 shares of Common Stock in the aggregate, (iii) the Company's issuance of
Common Stock upon the exercise of presently outstanding stock options, (iv) the
Company's issuance of not more than 100,000 shares of Common Stock in the
aggregate under its Employee Stock Purchase Plan and Deferred Compensation Plan
and (v) the Company's issuance of Common Stock in connection with one or more
acquisitions in an amount not exceeding the sum of (A) 1,000,000 shares and (B)
such additional number of shares as are subject to lock-up provisions
substantially identical to those in this Section 5(f) for the balance of the
90-day period contemplated by this Section 5(f).
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to the Underwriter copies of
(i) all reports to the Company's stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(h) The Company will apply the proceeds from the sale of the Shares as
set forth under the caption "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to cause the Shares to be
listed on the New York Stock Exchange.
(j) The Company, during the period when the Prospectus is required to be
delivered under the Act or the Exchange Act, will file all documents required to
be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Exchange Act and the rules and
regulations thereunder.
6. PAYMENT OF EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (a)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits
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thereto), any preliminary prospectus, the Prospectus and any amendments or
supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including
this Agreement) and all other documents related to the public offering of the
Shares (including those supplied to the Underwriter in quantities as
hereinabove stated), (b) the issuance, transfer and delivery of the Shares to
the Underwriter, including any transfer or other taxes payable thereon, (c)
the qualification of the Shares under state or foreign securities or Blue Sky
laws, including the costs of printing and mailing a preliminary and final
"Blue Sky Survey" and the fees of counsel for the Underwriter and such
counsel's disbursements in relation thereto, (d) listing the Shares on the
New York Stock Exchange, (e) filing fees of the Commission and the National
Association of Securities Dealers, Inc., (f) the cost of printing
certificates representing the Shares and (g) the cost and charges of any
transfer agent or registrar.
7. CONDITIONS OF UNDERWRITER'S OBLIGATION. The obligation of the
Underwriter to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholder herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if difference, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to the Underwriter or to Xxxxx Xxxxxxx & Xxxx LLP ("Underwriter's Counsel")
pursuant to this Section 7 of any misstatement or omission, to the performance
by the Company of its obligations hereunder, and to the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission in a timely
fashion in accordance with Section 5(a) hereof; and, at or prior to the Closing
Date no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date, the Underwriter shall have received the opinion
of Fulbright & Xxxxxxxx L.L.P., counsel for the Company, dated the Closing Date
addressed to the Underwriter and in form and substance reasonably satisfactory
to Underwriter's Counsel, to the effect that:
(i) Each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the Company
and the Subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction specified in an exhibit to such opinion.
Each of the Company and the Subsidiaries has all requisite corporate
authority to own, lease and license its respective properties and conduct
its business as described in the Registration Statement and the
Prospectus.
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization." All of the outstanding shares of Common Stock are duly
and validly authorized and issued, are fully paid and
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non-assessable and were not issued in violation of or subject to any
preemptive rights. The Shares to be delivered on the Closing Date have
been duly and validly authorized and, when delivered by the Company
against payment therefor in accordance with this Agreement, will be duly
and validly issued, fully paid and non-assessable and will not have been
issued in violation of or subject to any preemptive rights imposed by
law or the Company's certificate of incorporation. The Common Stock and
the Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iii) The Common Stock currently outstanding is listed, and the
Shares to be sold under this Agreement to the Underwriter are duly
authorized for listing, on the New York Stock Exchange.
(iv) The execution and delivery of this Agreement by the Company
have been duly and validly authorized by all necessary corporate actions,
and this Agreement has been duly executed and delivered by the Company.
(v) To such counsel's knowledge, there is no litigation or
governmental or other action, suit, proceeding or investigation before any
court or before or by any public, regulatory or governmental agency or
body pending or to such counsel's knowledge, threatened against, or
involving the properties or business of, the Company or any of the
Subsidiaries, which is of a character required to be disclosed in the
Registration Statement and the Prospectus which has not been properly
disclosed therein.
(vi) The execution, delivery, and performance of this Agreement by
the Company do not and will not (A) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any Operative Document or (B) violate or
conflict with any provision of (x) the certificate or articles of
incorporation or by-laws of the Company or any of the Subsidiaries, or, to
such counsel's knowledge, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over the Company or any of the Subsidiaries or
any of their respective properties or assets or (y) the terms and
provisions of any Operative Document. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required by any statute or regulation
for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (1) such
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriter (as to
which such counsel need express no opinion) and (2) such as have been made
or obtained under the Act.
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(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial or statistical data included
or incorporated by reference therein, as to which no opinion need be
rendered) comply as to form in all material respects with the requirements
of the Act and the Regulations.
(viii) The Registration Statement has become effective under the
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission and all filings required by Rule
424(b) of the Regulations have been made.
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 and the Subsidiaries,
representatives of the independent public accountants of the Company and
representatives of the Underwriter at which the contents of the Registration
Statement and Prospectus and related matters were discussed. 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 and the
Prospectus, such counsel advises the Underwriter that, on the basis of the
foregoing, no facts have come to the attention of such counsel which lead such
counsel to believe that the Registration Statement (other than (i) the financial
statements (including the notes thereto included therein, (ii) the other
financial and statistical information included therein and (iii) the exhibits
thereto, as to which such counsel has not been asked to comment as of the time
it became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (other than
(i) the financial statements (including the notes thereto and the auditor's
report thereon) included therein and (ii) the other financial and statistical
information included therein, as to which such counsel has not been asked to
comment), as to the issue date thereof and as of the Closing Date, contained or
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriter's
Counsel) of other counsel reasonably acceptable to Underwriter's Counsel,
familiar with the applicable laws; (B) as to matters involving incorporations in
other jurisdictions, on a reading of the applicable statutes without any review
of judicial or administrative interpretations thereof; and (C) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the Subsidiaries,
-15-
provided that copies of any such statements or certificates shall be delivered
to Underwriter's Counsel. The opinion of such counsel for the Company shall
state that the opinion of any such other counsel is in form satisfactory to such
counsel and, in their opinion, the Underwriter and they are justified in relying
thereon.
(c) At the Closing Date, the Underwriter should have received the
opinion of Xxxxxx X. Xxxxxx, Vice President, General Counsel and Secretary of
the Company, addressed to the Underwriter and in form and substance satisfactory
to the Underwriter's Counsel to the effect that:
(i) The documents filed under the Exchange Act and incorporated by
reference in the Registration Statement and the Prospectus or any
amendment thereof or supplement thereto (other than the financial
statements and schedules and other financial data included or incorporated
by reference therein, as to which no opinion need be rendered) when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such documents,
when such documents became effective or were so filed, as they case may
be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact, or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case
of other documents which were filed under the Exchange Act with the
Commission, 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 when such documents
were so filed, not misleading.
(ii) All of the issued and outstanding capital stock of each
Subsidiary of the Company has been duly and validly issued and is fully
paid and non-assessable and was not issued in violation of preemptive
rights and, to such counsel's knowledge, is owned, directly or indirectly,
by the Company, free and clear of any lien, encumbrance, claim, security
interest, restriction on transfer, shareholders' agreement, voting trust
or other defect of title whatsoever.
(iii) To such counsel's knowledge, no person or entity has the right
to require registration of shares of Common Stock or other securities of
the Company by virtue of the filing or effectiveness of the Registration
Statement or the offer and sale of the Shares as contemplated by this
Agreement.
(d) At the Closing Date, the Underwriter shall have received the opinion
of counsel to the Selling Stockholder addressed to the Underwriter and in form
and substance satisfactory to the Underwriter's Counsel, to the effect:
(i) The Selling Stockholder is the record owner of the Shares to
be sold by the Selling Stockholder hereunder, and the Selling Stockholder
has all partnership power and authority to enter into this Agreement and
to sell, assign, transfer and deliver the Shares;
-16-
counsel has no knowledge after due inquiry that immediately prior to
the Closing Date the Selling Stockholder did not have good and valid
title to such Shares, free and clear of all adverse claims (within the
meaning of Article 8 of the Uniform Commercial Code); and good and
valid title to such Shares, free and clear of such adverse claims, has
been transferred to the Underwriter who purchased and took delivery of
certificates representing such Shares in good faith and without notice
of any adverse claim within the meaning of Article 8 of the Uniform
Commercial Code.
(ii) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder.
(iii) The execution, delivery and performance of this Agreement by
the Selling Stockholder and the consummation of the transactions
contemplated hereby will not (A) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Stockholder
pursuant to any agreement, instrument, franchise, license or permit known
to such counsel to which the Selling Stockholder is a party or by which
the Selling Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject, (B) violate any provisions of the
Certificate of Limited Partnership or Partnership Agreement of the Selling
Stockholder or (C) violate any statute, rule or regulation known to such
counsel or any order known to such counsel of any court or governmental
agency or body having jurisdiction over the Selling Stockholder or any of
its properties.
(iv) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required for
the sale of the Shares by the Selling Stockholder, except the registration
under the Act of the Shares, reports required to be filed pursuant to the
Exchange Act as the result of such sale, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriter.
(e) All proceedings taken in connection with the sale of the Shares as
herein contemplated shall be satisfactory in form and substance to the
Underwriter and to Underwriter's Counsel, and the Underwriter shall have
received from said Underwriter's Counsel a favorable opinion, dated as of the
Closing Date with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as the
Underwriter may reasonably require, and the Company shall have furnished to
Underwriter's Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(f) At the Closing Date, the Underwriter shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that (i) the condition set forth
in subsection (a) of this Section 7 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing Date
the obligations of the
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Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, the Company and
the Subsidiaries have not sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a material adverse
change, in the business, properties, operations, condition (financial or
other) or results of operations of the Company and the Subsidiaries taken as
a whole, except in each case as described in or contemplated by the
Prospectus.
(g) At the time this Agreement is executed and at the Closing Date, the
Underwriter shall have received a letter, from Xxxxxx Xxxxxxxx LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriter and in form
and substance satisfactory to the Underwriter, to the effect that: (i) they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the Regulations and stating that the answer to Item 10 of
the Registration Statement is correct insofar as it relates to them; (ii)
stating that, in their opinion, the financial statements and schedules of the
Company included, and incorporated by reference, in the Registration Statement
and the Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Exchange Act and the applicable published rules and regulations of the
Commission thereunder; (iii) on the basis of procedures referred to in such
letter, including, without limitation, a reading of the Company's unaudited
consolidated balance sheet at March 31, 2001, the Company's unaudited statement
of income for the three months ended March 31, 2001 and the Company's
consolidated statement of cash flows for the three months ended March 31, 2001
and a reading of the minutes of meetings and consents of the stockholders and
boards of directors of the Company and the Subsidiaries and the committees of
such boards subsequent to December 31, 2000, inquiries of officers and other
employees of the Company and the Subsidiaries who have responsibility for
financial and accounting matters of the Company and the Subsidiaries with
respect to transactions and events subsequent to December 31, 2000, and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would cause
them to believe that: (A) with respect to the period subsequent to December 31,
2000 there were, as of the date of the most recent available monthly
consolidated financial statements of the Company and the Subsidiaries and as of
a specified date not more than five days prior to the date of such letter, any
changes in the capital stock or long-term indebtedness of the Company or any
decrease in the net current assets or stockholders' equity of the Company, in
each case as compared with the amounts shown in the most recent balance sheet
-18-
presented in the Registration Statement and the Prospectus, except for changes
or decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur or which are set forth in such letter; (B) with respect to
the period subsequent to March 31, 2001 there were, as of the date of the most
recent available monthly consolidated financial statements of the Company and
the Subsidiaries and as of a specified date not more than five days prior to the
date of such letter, any changes in the capital stock or long-term indebtedness
of the Company or any decrease in the net current assets or stockholders' equity
of the Company, in each case as compared with the amounts shown in the most
recent balance sheet presented in the Registration Statement and the Prospectus,
except for changes or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth in such
letter; or (C) that during the period from March 31, 2001 to the date of the
most recent available monthly consolidated financial statements of the Company
and the Subsidiaries, if any, and to a specified date not more than five days
prior to the date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or total or
per share net income, except for decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur or which are set forth in
such letter; (iv) stating that nothing caused them to believe that the unaudited
proforma financial information of the Company included in the Registration
Statement does not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X promulgated
under the Act or that the proforma adjustments have not been properly applied to
the historical amounts in the compilation of such statements; and (v) stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, and other financial information pertaining to the
Company and the Subsidiaries set forth in the Registration Statement and the
Prospectus, which have been specified by the Underwriter prior to the date of
this Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company and the Subsidiaries or from schedules furnished by the Company, and
excluding any questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by the Underwriter set forth in such
letter, and found them to be in agreement.
(h) Prior to the Closing Date the Company shall have furnished to the
Underwriter such further information, certificates and documents as the
Underwriter may reasonably request.
(i) The Underwriter shall have received from (i) each person who is a
director or officer of the Company or such stockholders as have been heretofore
designated by the Underwriter and listed on SCHEDULE I hereto an agreement to
the effect that for a period of 90 days from the date of the Prospectus and (ii)
the Selling Stockholder and each related party listed on SCHEDULE II hereto an
agreement to the effect that for a period of 90 days from the date of the
Prospectus such persons will not, directly or indirectly, without the
Underwriter's prior written consent, offer, sell, offer or agree to sell, grant
any option to purchase or otherwise dispose (or announce any offer, sale, grant
of an option to purchase or other disposition) of any shares of Common Stock (or
any securities convertible into, exercisable for or exchangeable or exercisable
for shares of Common Stock).
(j) At the Closing Date, the Shares shall have been approved for listing
on the New York Stock Exchange upon notice of issuance.
(k) At the Closing Date, the Underwriter shall have received a
certificate of an authorized officer of the Selling Stockholder, dated the
Closing Date, to the effect that the representations and warranties of the
Selling Stockholder set forth in Section 2 hereof are accurate and that the
Selling Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date.
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(l) On or prior to the Closing Date, the Underwriter shall have received
a properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof) from the Selling Stockholder.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to the Underwriter or to
Underwriter's Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to the Underwriter and to
Underwriter's Counsel, all obligations of the Underwriter hereunder may be
cancelled by the Underwriter at, or at any time prior to, the Closing Date and
the obligation of the Underwriter to purchase the Additional Shares may be
cancelled by the Underwriter at, or at any time prior to, the Additional Closing
Date. Notice of such cancellation shall be given to the Company in writing, or
by telephone, telex or telegraph, confirmed in writing.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Selling
Stockholder, the Underwriter and each person, if any, who controls the Selling
Stockholder or any Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act against any and all losses, liabilities,
claims, damages and expenses as incurred (including but not limited to
reasonable attorneys' fees and any and all expenses incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim, and any and all amounts paid in settlement of any claim or litigation),
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, 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; PROVIDED, HOWEVER, that the Company will not be liable
in any such case to the Underwriter or any controlling person of the Underwriter
to the extent but only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter expressly for use therein; PROVIDED,
FURTHER, that the Company will not be liable in any such case to the Selling
Stockholder or any controlling person of the Selling Stockholder to the extent
but only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Selling Stockholder expressly for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have including
under this Agreement.
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(b) The Selling Stockholder agrees to indemnify and hold harmless the
Company, the Underwriter and each person, if any, who controls the Company or
the Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act against any and all losses, liabilities, claims, damages and
expenses as incurred (including but not limited to reasonable attorneys' fees
and any and all expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact relating to the Selling
Stockholder contained in the Registration Statement for the registration of the
Shares, as originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact relating to the Selling Stockholder required to be
stated therein or necessary to make the statements therein not misleading, in
each such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Selling Stockholder expressly
for use therein; PROVIDED, HOWEVER, the Selling Stockholder's liability with
respect to all such claims under this subsection (b) or Section 9 hereof shall
be limited to an amount equal to the net proceeds received by the Selling
Stockholder from the sale of the Shares. This indemnity agreement will be in
addition to any liability which the Selling Stockholder may otherwise have
including under this Agreement. The Company and the Underwriter acknowledge that
the statements set forth under the caption "Principal and Selling Stockholders"
and in the third paragraph under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of the
Selling Stockholder expressly for use in the Registration Statement relating to
the Shares as originally filed or in any amendment thereof, any related
preliminary prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(c) The Underwriter agrees to indemnify and hold harmless the Company
and the Selling Stockholder, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company and/or the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim, and any and all amounts paid
in settlement of any claim or litigation), jointly or severally, to which they
or any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for
the registration of the Shares, as originally filed or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, 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
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necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter expressly for use therein;
PROVIDED, HOWEVER, that in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable
to the Shares purchased by the Underwriter hereunder. This indemnity will be
in addition to any liability which the Underwriter may otherwise have
including under this Agreement. The Company and the Selling Stockholder
acknowledge that the statements set forth in the last sentence of the first
paragraph and the fourth paragraph on the cover page and in the first
paragraph under the caption "Underwriting" in the Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriter
expressly for use in the Registration Statement relating to the Shares as
originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement
thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof; but the
failure to so notify the indemnifying party (i) will not relieve it from
liability under Section 8(a), 8(b) or 8(c) hereof, as applicable, unless and to
the extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party for any obligations
to any indemnified party other than the indemnification obligations provided in
Section 8(a), 8(b) or 8(c) hereof, as applicable. In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (x) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (y) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action or
(z) the named parties to any such action (including any impleaded parties)
included both the indemnifying and the indemnified parties and such parties
shall have been advised in writing by such counsel that representation of such
indemnifying and indemnified parties by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to an actual or
reasonably anticipated material conflict of interest between them (in which case
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party), in any of which events such fees
and expenses shall be borne by the indemnifying parties; PROVIDED, HOWEVER,
under no circumstances shall the indemnifying parties be responsible for
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paying for fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) to represent the indemnified parties in all
jurisdictions. Anything in this subsection (d) to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement
of any claim or action effected without its written consent; PROVIDED,
HOWEVER, that such consent was not unreasonably withheld.
9. CONTRIBUTION. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholder
and the Underwriter shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and the
Selling Stockholder any contribution received by the Company and/or the Selling
Stockholder from persons, other than the Underwriter, who may also be liable for
contribution, including persons who control the Company and/or the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company, the Selling
Stockholder and the Underwriter may be subject, in such proportions as are
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriter on the other hand from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 8 hereof, in such proportions
as are appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriter on the other hand in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriter on the other hand shall be deemed to be in the same proportion
as (a) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Stockholder bear to (b) the underwriting discounts and commissions
received by the Underwriter, respectively, in each case as set forth in the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholder or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall the Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by the Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to
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contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 9 and the
preceding sentence, the Underwriter shall not 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 the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. For purposes of this Section 9, each person, if
any, who controls the Underwriter within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act shall have the same rights to
contribution as the Underwriter, and each person, if any, who controls the
Company and/or the Selling Stockholder within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company and the Selling
Stockholder, as applicable, subject in each case to clauses (i) and (ii) of
this Section 9. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution
may be sought, but the failure to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 9 or otherwise unless such
failure results in the forfeiture by the party or parties from whom
contribution may be sought of substantial rights and defenses. No party shall
be liable for contribution with respect to any action or claim settled
without its consent; PROVIDED, HOWEVER, that such consent was not
unreasonably withheld.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Underwriter, the Company and the
Selling Stockholder contained in this Agreement, including the agreements
contained in Section 6, the indemnity agreements contained in Section 8 and the
contribution agreements contained in Section 9, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Underwriter or any controlling person thereof or by or on behalf of the
Company or the Selling Stockholder, any of their respective officers and
directors or any controlling persons thereof, and shall survive delivery of and
payment for the Shares to and by the Underwriter. The representations contained
in Section 1 and the agreements contained in Sections 6, 8, 9 and 11(d) hereof
shall survive the termination of this Agreement, including termination pursuant
to Section 11 hereof.
11. TERMINATION.
(a) The Underwriter shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligation of the Underwriter to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in the Underwriter's opinion will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (ii) if trading on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended, or minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock
-24-
Exchange or the Nasdaq National Market by the New York Stock Exchange or the
Nasdaq National Market or by order of the Commission or any other
governmental authority having jurisdiction; or (iii) if a banking moratorium
has been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares or the
Additional Shares, as the case may be, shall have become effective; or (iv)
(A) if the United States becomes engaged in hostilities or there is an
escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (B) if
there shall have been such change in political, financial or economic
conditions if the effect of any such event in (A) or (B) as in the
Underwriter's judgment makes it impracticable or inadvisable to proceed with
the offering, sale and delivery of the Firm Shares or the Additional Shares,
as the case may be, on the terms contemplated by the Prospectus.
(b) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, or telegraph, confirmed in writing by letter.
(c) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to Section 11(a) hereof), or if the
sale of the Shares provided for herein is not consummated because any condition
to the obligations of the Underwriter set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Underwriter, reimburse the Underwriter for all
reasonable out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriter in connection herewith.
12. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and , if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx Xxxxxx, Senior Managing Director; if sent to the
Company, shall be mailed, delivered, or telegraphed and confirmed in writing to
the Company, 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxx X. Xxxxxx, Vice President, General Counsel and Secretary; and
if sent to the Selling Stockholder, shall be mailed, delivered, or telegraphed
and confirmed in writing to the Selling Stockholder, 000 Xxxx Xxxxxx, Xxxxx
0000, Xxxx Xxxxx, Xxxxx 00000, Attention: X.X. Xxxxxx.
13. PARTIES. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriter and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 8 and
9 hereof, and their respective heirs, devisees, successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from the Underwriter.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts
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of law.
15. 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.
16. 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.
17. SEVERABILITY. If any provision of this Agreement is invalid, illegal
or incapable of being enforced, the remainder of this Agreement shall not be
affected thereby and all other provisions of this Agreement shall remain in full
force and effect.
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Signature Page
If the foregoing correctly sets forth the understanding between the
Underwriter and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
LONE STAR TECHNOLOGIES, INC.
By:
---------------------------------------------
Xxxxxx X. Xxxxxx
Vice President,
General Counsel and Secretary
ALPINE CAPITAL, L.P.
By: Algenpar, Inc.,
its general partner
By:
------------------------------------
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:
--------------------------------------------------
Signature Page
SCHEDULE I
H. Xxxxxxx Xxxx
Rhys. J. Best
W. Xxxxx Xxxx
Xxxxxxxxx X. Xxxx, Xx.
Xxxxxxx X. Xxxxxxx
M. Xxxxxx XxXxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxx
I-1
SCHEDULE II
Keystone, Inc.
The Xxxx X. and Xxxxxx X. Xxxx Foundation
II-1