Exhibit 1.1
[Form of Underwriting Agreement]
Shares
STEEL DYNAMICS, INC.
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
, 2002
, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Steel Dynamics, Inc., an Indiana corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS"), and certain shareholders of the Company (the "FIRM SELLING
SHAREHOLDERS") named in Schedule II hereto severally propose to sell to the
several Underwriters, an aggregate of shares of the Common Stock (par value
$.01 per share) of the Company (the "FIRM SHARES") of which shares are to be
issued and sold by the Company (the "COMPANY SHARES") and shares are to be
sold by the Firm Selling Shareholders, each Firm Selling Shareholder selling the
amount set forth opposite such Firm Selling Shareholder's name in Schedule II
hereto. The Company and the Firm Selling Shareholders are hereinafter
collectively referred to as the "FIRM SELLERS".
[In addition, [the Company and certain shareholders of the Company
named in Schedule III hereto (the "OPTION SELLING SHAREHOLDERS")] severally
propose to sell to the several Underwriters not more than an additional
aggregate of shares of Common Stock (par value $.01 per share) of the Company
(the "ADDITIONAL SHARES") if and to the extent that the Representatives shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of Common Stock granted to the Underwriters in Section 3
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES". The shares of Common Stock (par value $.01 per
share) of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The Firm
Selling Shareholders and the Option Selling Shareholders are hereinafter
collectively referred to as the "SELLING SHAREHOLDERS". The Company and the
Selling Shareholders are hereinafter collectively referred to as the "SELLERS".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including information incorporated by reference, the exhibits thereto and the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION
STATEMENT"; the prospectus, including information incorporated by reference, in
the form first used to confirm sales of Shares is hereinafter referred to as the
"PROSPECTUS". If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then
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any reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters and the
Selling Shareholders that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
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(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(f) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid
and non-assessable.
(g) The Company Shares [and the Additional Shares to be sold
by the Company] have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(h) This Agreement and each of the Irrevocable Power of
Attorney and Custody Agreements (collectively, the "POWER OF ATTORNEY
AND CUSTODY AGREEMENTS") by each Selling Shareholder and the Company as
Custodian (the "CUSTODIAN"), appointing certain individuals as the
Selling Shareholders' attorneys-in-fact to the extent set forth therein
relating to the transactions contemplated hereby and by the
Registration Statement have been duly authorized, executed and
delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
the Power of Attorney and Custody Agreements, and the issuance and
delivery of the Company Shares [and the Additional Shares to be sold by
the Company] will not contravene any provision of applicable law or the
articles of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
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(l) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain such consents, authorizations,
approvals, orders, certificates and permits or make such declarations
and filings would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, certificate or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act or
incorporated by reference into, complied when so filed in all material
respects with the Securities Act and the rules and regulations of the
Commission thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, required to
registered as, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(o) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
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(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (1) the
Company and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has
not purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus.
(r) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries, in
each case except as described in or contemplated by the Prospectus.
(s) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe
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that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the condition, financial
or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus.
(v) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(w) There are no holders of securities (debt or equity) of the
Company or any of its subsidiaries, or holders of rights, options, or
warrants to obtain securities of the Company or any of its
subsidiaries, who have the right, during the 90 day period after the
date of this Agreement to require the Company to register securities
held by them under the Securities Act, other than holders who have
waived such right for the 90 day period after the date of the public
offering of the Shares and have waived their rights with respect to the
inclusion of their securities in the Registration Statement.
(x) Except for shareholders who properly received notices from
the Company relating to their registration rights with respect to the
Registration Statement, no person has the right to require the Company
to include any Shares or other securities for registration pursuant to
the Registration Statement.
2. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders severally and not jointly represents and
warrants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement and its Power of Attorney and Custody Agreement
will not contravene any provision of applicable law, or the certificate
of incorporation or by-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or the limited partnership
agreement (if such Selling Shareholder is a limited partnership) or any
agreement or other instrument binding upon such Selling Shareholder or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
Selling
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Shareholder of its obligations under this Agreement or the Power of
Attorney and Custody Agreement of such Selling Shareholder, except such
as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date (as
defined below), in the case of a Firm Selling Shareholder, or an
applicable Option Closing Date (as defined below), in the case of an
Option Selling Shareholder, will have, valid title to the Shares to be
sold by such Selling Shareholder and the legal right and power, and all
required authorizations and approvals to enter into this Agreement and
its Power of Attorney and Custody Agreement and to sell, transfer and
deliver the Shares to be sold by such Selling Shareholder.
(d) The Power of Attorney and Custody Agreement of such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms, except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(e) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass valid title to such
Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
(f) The information which relates specifically to such Selling
Shareholder, as set forth under the caption "Principal and Selling
Stockholders" (including the notes thereto), in the Registration
Statement and Prospectus is, and on the Closing Date (as defined
below), in the case of a Firm Selling Shareholder, or an applicable
Option Closing Date (as defined below), in the case of an Option
Selling Shareholder, will be, true, correct and complete, and does not,
and on the Closing Date, in the case of a Firm Selling Shareholder, or
such applicable Option Closing Date, in the case of an Option Selling
Shareholder, will not, contain any untrue statement of material fact or
omit to state any material fact necessary to make such information not
misleading.
3. Agreements to Sell and Purchase. Each Firm Seller,
severally and not jointly, hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Firm Seller at $ a share
(the "PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by such Firm Seller as the number of
Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, [the Company and the
Option Selling Shareholders severally agree] to sell to the Underwriters the
Additional Shares, and the Underwriters shall
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have the right to purchase, severally and not jointly, up to Additional
Shares at the Purchase Price. You may exercise that right on behalf of the
Underwriters in whole or from time to time in part by giving written notice of
each election to exercise the option not later than 30 days after the date of
this Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business day after the
written notice is given and not earlier than the closing date for the Firm
Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, Additional Shares are to be purchased (an
"OPTION CLOSING DATE"), each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") and X.X. Xxxxxx
Securities Inc. ("JPMORGAN"), on behalf of the underwriters, it will not, for a
period of 90 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of the Shares to the
Underwriters pursuant to this Agreement, (b) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the public offering of the Common Stock hereunder or (c) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing.
In addition, each Selling Shareholder agrees that, without the
prior written consent of Xxxxxx Xxxxxxx and JPMorgan on behalf of the
Underwriters, it will not, for a period of 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at $ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $ a
share under the Public Offering Price, and that any Underwriter may allow,
and such dealers may reallow, a concession, not in excess of $ a share, to
any Underwriter or to certain other dealers.
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5. Payment and Delivery. Payment for the Firm Shares to be
sold by each Firm Seller shall be made by wire transfers to the Company's
account and the Custodian's account (for the benefit of the Firm Selling
Shareholders) in federal funds or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m., New York City time, on , 2002, or at
such other time on the same or such other date, not later than , 2002, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made by wire
transfer payable to the [Company's and the Custodian's account (for the benefit
of the Option Selling Shareholders)] in federal funds or other funds immediately
available in New York City against delivery of such Additional Shares for the
respective accounts of the several U.S. Underwriters at the office of Shearman &
Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m., New York
City time, on the date specified in the corresponding notice described in
Section 3 or at such other time on the same or on such other date, in any event
not later than , 2002, as shall be designated in writing by you.
The Firm Shares and Additional Shares shall be registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be. The Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The
obligations of the Sellers to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares are
subject to the condition that the Registration Statement shall have become
effective not later than (New City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
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whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement), that, in your judgment, is material and
adverse and makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company or
the Underwriters, threatened by the Commission.
(d) You shall have received on the Closing Date an opinion of
Xxxxxxx & XxXxxxx, counsel for the Company, dated the Closing Date, in
the form attached hereto as Exhibit A.
The opinion of Xxxxxxx & McNagny shall be rendered to you at
the request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
each of the counsel for the Selling Shareholders listed on Schedule IV
hereto, dated the Closing Date, in the form attached hereto as Exhibit
B.
The opinions of such counsel shall be rendered to the
Underwriters at the request of the Selling Shareholders and shall so
state therein.
(f) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, with respect to the Registration Statement and the Prospectus and
such other related matters as you may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(g) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof and the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
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provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit C hereto between you, certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or any securities convertible
into or exercisable or exchangeable for such Common Stock, delivered to
you on or before the date hereof, shall be in full force and effect on
the Closing Date.
(i) You shall have received on the Closing Date certificates
dated the Closing Date and signed by the Selling Shareholders or by
attorneys-in-fact of the Selling Shareholders, to the effect that the
representations and warranties of each such Selling Shareholder
contained in this Agreement are true and correct as of the Closing Date
and that each such Selling Shareholder has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(j) The Company shall have complied with the provisions of
Section 7(a) hereof with respect to the furnishing of Prospectuses on
the business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(k) The Shares shall have been approved for quotation on the
Nasdaq National Market System by the National Association of Securities
Dealers, Inc. (the "NASD").
(l) You shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Shares to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, to furnish to you in New York
City, without charge, prior to 10:00 a.m., New York City time, on the
business day next succeeding the date of this Agreement during the
period mentioned in Section 7(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably
12
object; and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of your counsel the Prospectus
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with any review of the offering of the Shares by the NASD.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act no later than the earlier of (i) 10:00 p.m. Eastern time
on the date hereof and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2) under the Securities Act, and shall pay
the applicable fees in accordance with Rule 111 under the Securities
Act.
(f) To make generally available to the Company's security
holders and to you as soon as practicable, an earning statement
covering such twelve-month period ending September 30, 2003 that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(g) To use the net proceeds received by the Company from the
sale of the Shares hereunder in the manner specified in the Prospectus
under the caption "Use of Proceeds".
(h) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its and
the Selling Shareholders (except to the extent set forth in Section
8(a) below) obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
13
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any preliminary or supplementary Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities
laws as provided in Section 7(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with any
preliminary or supplementary Blue Sky or Legal Investment memorandum,
(iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the NASD, (v) all fees
and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to quoting the Shares on the Nasdaq
National Market System, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, (ix) the document production charges and expenses associated with
printing this Agreement and (x) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 9
entitled "Indemnity and Contribution" and the last paragraph of Section
11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. Covenants of the Selling Shareholders. In further
consideration of the agreements of the Underwriters herein contained, each of
the Selling Shareholders severally and not jointly covenants as follows:
(a) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, to pay or cause to be paid
(i) all taxes, if any, on the transfer and sale of the Shares being
sold by such Selling Shareholder and (ii) all expenses incident to the
delivery of the Shares and the fees and expenses of counsel and
accountants for such Selling Shareholder; provided that the provisions
of this Section 8(a) and Section 7(h) shall not in any way affect any
agreement between the Company and the Selling Shareholders with respect
to the payment of expenses.
14
(b) Such Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review, promptly upon
receipt, each amendment thereto provided to such Selling Shareholder.
At any time during the period from the date hereof through the Closing
Date or an Option Closing Date, in the case of an Option Selling
Shareholder, if there is any change in the information in the
Registration Statement as set forth under the caption "Principal and
Selling Shareholders" (including the notes thereto) that specifically
relate to such Selling Shareholder, such Selling Shareholder will
immediately notify the Company of such change.
(c) Such Selling Shareholder shall cooperate fully with the
Company in supplying such information relating to such Selling
Shareholder and the Shares as the Company may reasonably request for
use in preparation of the Registration Statement and all other
documents reasonably necessary or desirable in connection with the
offering of Shares. In addition, such Selling Shareholder shall furnish
to the Company (or, at the Company's request, to the Underwriters or
other parties) such further certificates and documents confirming the
representations and warranties contained herein, or with respect to
related matters, as the Company may reasonably request.
9. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and each affiliate of any Underwriter within the meaning
of Rule 405 under the Securities Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchased Shares,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each Underwriter and each person, if any,
who controls the Company or any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act and
15
each affiliate of any Underwriter within the meaning of Rule 405 under the
Securities Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Shareholder, as
set forth under the caption "Principal and Selling Stockholders" (including the
notes thereto) in the Prospectus and Registration Statement or any amendment or
supplement thereto; provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities; provided, further, that with respect to any amount due an
indemnified person under this paragraph (b), each Selling Shareholder shall be
liable only to the extent of the net proceeds received by such Selling
Shareholder from the sale of such Selling Shareholder's Shares.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Selling Shareholders and each person, if any,
who controls the Selling Shareholders within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Selling Shareholders to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to subsection (a), (b), (c), or (d) of this
Section 9, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and
16
any others the indemnifying party may designate in such proceeding and shall pay
the fees and disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx, in the case of parties indemnified
pursuant to Section 9(a) or (b), by the Company, in the case of parties
indemnified pursuant to Section 9(c), and by a majority of the Selling
Shareholders, in the case of parties indemnified pursuant to Section 9(d). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid, request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(f) To the extent the indemnification provided for in
subsection (a), (b), (c) or (d) of this Section 9 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
subsection, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the
17
offering of the Shares (before deducting expenses) received by each Seller and
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of a
Seller and of the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Seller or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint. In no event shall the
liability of a Selling Shareholder under this Section 9(f) exceed the amount
that such Selling Shareholder would have been required to pay under Section 9(b)
had such indemnification been held to be available thereunder.
(g) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (f) of this Section 9. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in subsection (f) of this Section 9
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter, any
person controlling any Underwriter or any affiliate of any Underwriter, any
Selling Shareholder or any person controlling any Selling Shareholder, or by or
on behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
10. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall
18
have been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or
19
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
20
14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
a part of this Agreement.
Very truly yours,
STEEL DYNAMICS, INC.
By:
-------------------------------
Name:
Title:
The Selling Shareholders named in
Schedules II and III hereto, acting
severally
By:
-------------------------------
Attorney-in-Fact
Name:
Title:
21
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
X.X. XXXXXX SECURITIES INC.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By
--------------------------------------
Name:
Title:
22
SCHEDULE I
Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
---------------
Total Firm Shares --
23
SCHEDULE II
Firm Selling Shareholders
Number of
Firm Shares
Firm Selling Shareholder To Be Sold
------------------------ ----------
Total ................................................. --
24
SCHEDULE III
Option Selling Shareholders
Number of
Additional
Option Selling Shareholder Shares To Be Sold
-------------------------- -----------------
-----------
Total ................................................. --
SCHEDULE IV
Counsel to the Selling Shareholders
Selling Shareholder Counsel
------------------- -------
25
EXHIBIT A
Pursuant to Section 6(d) of the Underwriting Agreement, Xxxxxxx &
XxXxxxx, counsel for the Company, shall furnish an opinion to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole;
(ii) each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares to be sold by
the Selling Shareholders) outstanding prior to the issuance of the Company
Shares have been duly authorized and are validly issued, fully paid and
non-assessable;
(v) all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(vi) the Company Shares [and the Additional Shares to be sold by the
Company] have been duly authorized and, when issued and delivered in
accordance with the terms of the Underwriting Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights;
(vii) the Underwriting Agreement and each of the Irrevocable Power
of Attorney and Custody Agreements (collectively, the "POWER OF ATTORNEY
AND CUSTODY AGREEMENTS"), each dated the date hereof, by each Selling
Shareholder and the Company as Custodian, appointing certain individuals
as the Selling Shareholders' attorneys-in-fact to the extent set forth
therein relating to the transactions contemplated hereby and by the
26
Registration Statement have been duly authorized, executed and delivered
by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Power of Attorney and Custody Agreements, and the issuance
and delivery of the Company Shares [and the Additional Shares to be sold
by the Company] will not contravene any provision of applicable law or the
articles of incorporation or by-laws of the Company or, to the best of
such counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company
of its obligations under the Underwriting Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares;
(ix) the statements (1) in the Prospectus under the captions "Risk
Factors -- We face litigation risks in connection with our terminated
Thailand advisory transaction," "Risk Factors -- Environmental regulation
imposes substantial costs and limitations on our operations," "Business --
Environmental Matters," "Business -- Legal Proceedings," "Related Party
Transactions," "Description of Certain Indebtedness" and "Underwriters",
(2) in the Annual Report on Form 10-K in Item 1. Business under the
captions "Risk Factors -- We face litigation risks in connection with our
terminated Thailand advisory transaction" and " -- Environmental
regulation imposes substantial costs and limitations on our operations,"
"Business -- Environmental Matters," in Item 3. Legal Proceedings and in
Item 13. Certain Relationships and Related Party Transactions", (3) in the
Quarterly Report on From 10-Q in Item 1. Legal Proceedings, (4) in the
Current Report on Form 8-K in Item 5. Other Events and (5) in the
Registration Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(x) The statements in the Prospectus under the caption "Certain
United States Federal Tax Consequences For Non-United States Holders,"
insofar as such statements constitute a summary of the United States
federal tax laws referred to therein, are accurate and fairly summarize in
all material respects the United States federal tax laws referred to
therein;
(xi) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
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documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required;
(xii) After due inquiry, to the best of our knowledge, the Company
and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xiii) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, required to be registered as an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended;
(xiv) the Registration Statement and Prospectus (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion) comply as to form in all material
respects with the Securities Act and the rules and regulations of the
Commission thereunder;
(xv) nothing has come to the attention of such counsel that causes
such counsel to believe that (A) the Registration Statement or the
Prospectus (except for the financial statements and financial schedules
and other financial and statistical data included therein, as to which
such counsel need not express any belief) do not comply as to form in all
material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder, (B) the
Registration Statement or the prospectus included therein (except for the
financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need not
express any belief) at the time the Registration Statement became
effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (C) the Prospectus (except for
the financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need not
express any belief) as of its date or as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and
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(xvi) each of the Company and its subsidiaries has all necessary
certificates, orders, permits, licenses, authorizations, consents and
approvals of and from, and has made all declarations and filings with, all
federal, state and local governmental authorities, all self-regulatory
organizations and all courts and tribunals, to own, lease, license and use
its properties and assets and to conduct its business in the manner
described in the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to revocation
or modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, nor is the Company or any of its
subsidiaries in violation of, or in default under, any federal, state and
local law, regulation, rule, decree, order or judgment applicable to the
Company or any of its subsidiaries the effect of which, singly or in the
aggregate, would have a material adverse effect on the prospects,
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, except
as described in the Prospectus.
(xvii) Except for shareholders who properly received notices from
the Company relating to their registration rights with respect to the
Registration Statement, no person has the right to require the Company to
include any Shares or other securities for registration pursuant to the
Registration Statement.
With respect to subsection (xv) above, such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
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EXHIBIT B
Pursuant to Section 6(e) of the Underwriting Agreement, counsel for
the Selling Shareholders shall furnish an opinion to the effect that:
(i) the Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of each of the Selling
Shareholder[s];
(ii) the execution and delivery by [the] [each] Selling
Shareholder[s] of, and the performance by such Selling Shareholder of its
obligations under, the Underwriting Agreement and the Power of Attorney
and Custody Agreement of such Selling Shareholder will not contravene any
applicable law, or the certificate of incorporation or by-laws of such
Selling Shareholder (if such Selling Shareholder is a corporation), or the
limited partnership agreement (if such Selling Shareholder is a limited
partnership) or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon such Selling Shareholder, or to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Shareholder, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under this
Agreement or Power of Attorney and Custody Agreement of such Selling
Shareholder, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares;
(iii) [each of] the Selling Shareholder[s] has legal right and
power, and all authorization and approval required by law, to enter into
the Underwriting Agreement and Power of Attorney and Custody Agreement of
such Selling Shareholder;
(iv) the Power of Attorney and Custody Agreement of [each of] the
Selling Shareholder[s] has been duly authorized, executed and delivered by
the Selling Shareholder[s] and is a valid and binding agreement of [each
of] of the Selling Shareholder[s], enforceable in accordance with its
terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability;
(v) [Each/The] Selling Shareholder has full right, power and
authority to sell, transfer and deliver such Shares pursuant the
Underwriting Agreement. Upon the payment of the purchase price pursuant to
the Underwriting Agreement, each Underwriter will be a "protected
purchaser" of the Shares to be purchased by it (within the meaning of
Section 8-303 of the Uniform Commercial Code as in effect in the State of
New York) and will acquire its interest in such Shares (including, without
limitation, all rights that [such/the] Selling Shareholder had or has the
power to transfer in such Shares) free of any adverse claim;
(vi) such counsel has no reason to believe that as to information
relating to the Selling Shareholder as set forth under the caption
"Principal and Selling Stockholders"
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(including the notes thereto), the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and has no reason to believe that as
to information relating to the Selling Shareholder as set forth under the
caption "Principal and Selling Stockholders" (including the notes
thereto), the Prospectus contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel may rely upon an opinion or opinions of counsel for any
Selling Shareholders and, with respect to factual matters and to the extent such
counsel deems appropriate, upon the representations of each Selling Shareholder
contained herein and in the Power of Attorney and Custody Agreement of such
Selling Shareholder and in other documents and instruments; provided that (A)
each such counsel for the Selling Shareholder is satisfactory to counsel for the
Underwriters, (B) a copy of each opinion so relied upon is delivered to you and
is in form and substance satisfactory to counsel for the Underwriters, (C)
copies of such Power of Attorney and Custody Agreement and of any such other
documents and instruments shall be delivered to you and shall be in form and
substance satisfactory to counsel for the Underwriters and (D) such counsel
shall state in their opinion that they are justified in relying on each such
other opinion.
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EXHIBIT C
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that Steel Dynamics, Inc., an Indiana
corporation (the "Company"), and the shareholders (the "Selling Shareholders")
of the Company named in Schedules II and IIII of the Underwriting Agreement (as
defined below) propose to enter into an underwriting agreement (the
"Underwriting Agreement") with (a) Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx"), X.X. Xxxxxx Securities Inc. ("JPMorgan"), and , the
several underwriters (the "Underwriters"), providing for the public offering
(the "Public Offering") of shares of the Company's Common Stock (par value $.01
per share) (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx and JPMorgan, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final prospectus relating to the
Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of such shares
of Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
shares of Common Stock to the Underwriters pursuant to the Underwriting
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx and JPMorgan on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an
32
Underwriting Agreement, the terms of which are subject to agreement between the
Company, the Selling Shareholders and the Underwriters.
Very truly yours,
(Name)
(Print Name)
(Address)
Accepted as of the date first set forth above:
XXXXXX XXXXXXX & CO. INCORPORATED
By: ________________________
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