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EXHIBIT 1.1
Hydril Company
7,500,000 Shares
Common Stock
($0.50 par value)
Underwriting Agreement
New York, New York
___, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxx Xxxxxxxx Incorporated
Xxxxxxx & Company International
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Hydril Company, a corporation organized under the laws of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, 2,323,932 shares of Common Stock, $0.50 par value
("Common Stock") of the Company, and the persons named in Schedule II hereto
(the "Selling Stockholders") propose to sell to the several Underwriters
5,176,068 shares of Common Stock (said shares to be issued and sold by the
Company and shares to be sold by the Selling Stockholders collectively being
hereinafter called the "Underwritten Securities"). The Company and the Selling
Stockholders named in Schedule II hereto also propose to grant to the
Underwriters an option to purchase up to 1,100,000 additional shares of Common
Stock to cover over-allotments (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, being hereinafter called the
"Securities"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. In addition, the term
Selling Stockholders shall mean either the singular or plural as the context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
17 hereof.
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As part of the offering contemplated by this Agreement, Xxxxxxx
Xxxxx Xxxxxx Inc. has agreed to reserve out of the Securities set forth opposite
its name on the Schedule I to this Agreement, up to 525,000 shares, for sale to
the Company's employees, officers, and directors as well as individuals
associated or affiliated with the Company's employees, officers, and directors
(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriting" (the "Directed Share Program"). The Securities to be sold by
Xxxxxxx Xxxxx Barney Inc. pursuant to the Directed Share Program (the "Directed
Shares") will be sold by Xxxxxxx Xxxxx Xxxxxx Inc. pursuant to this Agreement at
the public offering price. Any Directed Shares not orally confirmed for purchase
by any Participants by the end of the business day on which this Agreement is
executed will be offered to the public by Xxxxxxx Xxxxx Barney Inc. as set forth
in the Prospectus.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-38954) on Form S-1, including
a related preliminary prospectus, for registration under the Act of
the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, including a related preliminary
prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission either (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of final prospectus)
or (2) after the Effective Date of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b). In the case
of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or
such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any date on which Option
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Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of
the Act and the rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Selling Stockholder or any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) Annex A attached hereto sets forth the name, jurisdiction of
organization, principal place of business and jurisdictions where
business is conducted or assets are owned or leased by the Company or
subsidiaries of the Company (collectively, the "Subsidiaries"). Each
of the Company and its Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to so qualify could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, business, properties or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business (a "Material
Adverse Effect");
(d) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest or any other security interests, claims, liens or
encumbrances;
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(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the Company have
been duly and validly authorized, and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be
fully paid and nonassess able; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in
the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus
under the headings "U.S. Tax Consequences to Non- U.S. Holders",
"Description of Capital Stock," "Shares Eligible for Future Sale,"
"Business-Regulations," "Risk Factors - Limitations on our ability to
protect our intellectual property rights could cause a loss in
revenues and any competitive advantage we hold, - Environmental
compliance costs and liabilities could have a material adverse effect
on our financial condition, - Provisions of our charter, bylaws and
our note agreement may discourage acquisition bids and cause our
common stock to trade at a discount to where it otherwise may trade,
and - Future sales of our common stock could adversely affect its
market price," insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection
with the transactions
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contemplated herein, except such as have been obtained under the Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and
in the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
Subsidiaries, (ii) the terms of any material indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which the Company or any of its Subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company
or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties.
(k) Except for the rights of the Selling Stockholders to sell the
Securities set forth in Schedule II, no holders of securities of the
Company have rights to the registration of such securities under the
Registration Statement.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Financial Information" in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the
Registration Statement, the information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
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(n) Except as would not have, individually or in the aggregate, a
Material Adverse Effect, each of the Company and each of its
Subsidiaries owns or leases all such properties as are necessary to
the conduct of its operations as presently conducted.
(o) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such Subsidiary or
any of its properties, as applicable , except where, in the case of
clauses (ii) and (iii) above, such violation or default could not
reasonably be expected to have a Material Adverse Effect.
(p) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Securities.
(r) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof, except in any case in which the failure so to file would not
have a Material Adverse Effect, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto), and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(s) No labor problem or dispute with the employees of the Company
or any of its Subsidiaries exists or, to the Company's knowledge, is
threatened or imminent, and the Company is not aware of any existing
or imminent labor disturbance by the employees of any of its or its
Subsidiaries' principal suppliers,
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contractors or customers, that could have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(t) 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 reasonably prudent and customary
in the businesses in which they are engaged; all policies of insurance
and any fidelity or surety bonds insuring the Company or any of its
Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(u) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary of the Company, except
as described in or contemplated by the Prospectus.
(v) The Company and its Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(w) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of consolidated financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance
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with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(x) The Company has not taken, directly or indirectly, any action
that has constituted or that was designed to or might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(y) The Company and its Subsidiaries are (i) in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
Except as set forth in the Prospectus, neither the Company nor any of
the Subsidiaries has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(z) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material
Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(aa) Each of the Company and its Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in
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Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its
Subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published
interpretations. The Company and its Subsidiaries have not incurred
any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to
any such plan under Title IV of ERISA.
(bb) The Subsidiaries listed on Annex C attached hereto are the
only significant subsidiaries of the Company as defined by Rule 1-02
of Regulation S- X (the "Significant Subsidiaries").
(cc) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus
under the caption "Business-- Patents and Proprietary Rights," (a) to
the Company's knowledge, there are no rights of third parties to any
such Intellectual Property; (b) to the Company's knowledge, there is
no material infringement by third parties of any such Intellectual
Property; (c) there is no pending or, to the Company's best knowledge,
threatened action, suit, proceeding or claim by others challenging the
Company's rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim; (d) there is no pending or, to the Company's best
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (e) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable
basis for any such claim; (f) there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may
dominate any Intellectual Property described in the Prospectus as
being owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and (g)
there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company invalid or any U.S. patent
application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office.
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(dd) The statements contained in the Prospectus under the
captions "Risk Factors -- Risks Relating to Our Business --
Limitations on our ability to protect our intellectual property rights
could cause a loss in revenues and any competitive advantage we hold"
and "Business -- Our Emphasis on Research and Development" as well as
other references in the Prospectus to patent and licensing matters,
insofar as such statements summarize legal matters, agreements,
documents, or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(ee) The Company has duly inquired as to the NASD membership or
affiliation of each of the Selling Stockholders and, other than as
expressly communicated to the Representatives or their counsel, no
such NASD membership or affiliation exists.
Furthermore, the Company represents and warrants to Xxxxxxx Xxxxx
Barney Inc. that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other than such as have been obtained, is necessary under the securities
laws and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
The Company has not offered, or caused the Underwriters to offer,
Securities to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder, except that, with respect to
paragraph (ii)(f) of this Section 1, only each Selling Stockholder who owns more
than 5% of the Company's common stock prior to this offering, other than Booth &
Co., severally and not jointly represents and warrants to, and agrees with, each
Underwriter that:
(a) Such Selling Stockholder is the record and beneficial owner
of the Securities to be sold by it hereunder free and clear of all
liens, encumbrances,
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equities and claims, other than pursuant to the Custody Agreement,
and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from such Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of
the New York Uniform Commercial Code ("UCC")), each Underwriter that
has purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Securities
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted
against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable) executed and
delivered by such Selling Stockholder, in the form heretofore
furnished to you (the "Custody Agreement") with O'Melveny & Xxxxx LLP,
as Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for each Selling Stockholder are
subject to the interests hereunder of the Underwriters; the
arrangements for custody and delivery of such certificates, made by
such Selling Stockholder hereunder and under the Custody Agreement,
are not subject to termination by any acts of such Selling
Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates
for the Securities will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and the Custody
Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws
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of any jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters and such other approvals as have
been obtained.
(e) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of
the terms hereof by such Selling Stockholder will conflict with,
result in a breach or violation of, or constitute a default under any
law or, as applicable, the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or, as applicable, any of
its subsidiaries is a party or bound, except where such conflict with,
breach or violation of, or default under such indenture or other
agreement or instrument does not have a materially adverse effect on
the sale of the Securities being sold by such Selling Stockholder, the
consummation of any other of the transactions herein contemplated by
such Selling Stockholder or the fulfillment of the terms hereof by
such Selling Stockholder, or any judgment, order or decree applicable
to such Selling Stockholder or, as applicable, any of its subsidiaries
of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over such Selling Stockholder
or, as applicable, any of its subsidiaries.
(f) Such Selling Stockholder is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Prospectus or any supplement thereto
which has adversely affected or may adversely affect the business of
the Company or any of its Significant Subsidiaries; and the sale of
Securities by such Selling Stockholder pursuant hereto is not prompted
by any information concerning the Company or any of its Significant
Subsidiaries which is not set forth in the Prospectus or any
supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by such Selling Stockholder specifically for
use in connection with the preparation thereof, such Selling
Stockholder hereby makes the same representations and warranties to
each Underwriter as the Company makes to such Underwriter under
paragraph (i)(b) of this Section.
Any certificate signed by, or on behalf of, any Selling
Stockholder or any officer thereof and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by such Selling Stockholder, as to
matters covered thereby, to each Underwriter.
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2. Purchase and Sale. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company and the Selling Stockholders agree, severally and not jointly, to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders, at a purchase price of
$_____ per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and the Selling
Stockholders named in Schedule II hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to 1,100,000 Option
Securities at the same purchase price per share as the Underwriters shall pay
for the Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the Underwriters.
Said option may be exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the Prospectus upon written or
telegraphic notice by the Representatives to the Company and such Selling
Stockholders setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. The maximum number of Option Securities to be sold by the Company is
348,736 and the maximum aggregate number of Option Securities to be sold by the
Selling Stockholders is 751,264. The maximum number of Option Securities which
each Selling Stockholder agrees to sell is set forth in Schedule II hereto. In
the event that the Underwriters exercise less than their full over-allotment
option, the number of Option Securities to be sold by the Company and each
Selling Stockholder listed on Schedule II shall be, as nearly as practicable, in
the same proportion as the maximum number of Option Securities to be sold by the
Company and each Selling Stockholder and the number of Option Securities to be
sold. The number of Option Securities to be purchased by each Underwriter shall
be the same percentage of the total number of shares of the Option Securities to
be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
____, 2000, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
the Selling Stockholders or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of
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the Securities being sold by the Company and each of the Selling Stockholders to
or upon the order of the Company and the Selling Stockholders by wire transfer
payable in same-day funds to the accounts specified by the Company and the
Selling Stockholders. Delivery of the Underwritten Securities and the Option
Securities shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company and the
Selling Stockholders named in Schedule II hereto will deliver the Option
Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price therefor to or upon the order of the Company and the Selling Stockholders
named in Schedule II by wire transfer payable in same-day funds to the accounts
specified by the Company and the Selling Stockholders named in Schedule II
hereto. If settlement for the Option Securities occurs after the Closing Date,
the Company and such Selling Stockholders will deliver to the Representatives on
the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and
will not file
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any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the
Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives
(1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3)
when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or
become effective, (4) of any request by the Commission or its staff
for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for
any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
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 to amend the Registration Statement or supplement
the Pros pectus to comply with the Act or the rules thereunder, the
Company promptly will (1) notify the Representatives of any such
event, (2) prepare and file with the Commission, subject to the second
sentence of paragraph (i)(a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect
such compliance and (3) supply any supplemented Prospectus to you in
such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
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(d) The Company will furnish to the Representatives and counsel
for the Underwriters signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of
the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of each Preliminary Prospectus and the
Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject or take
any action which would subject the Company to taxation in any
jurisdiction where it is not already subject to taxation.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any affiliate of
the Company or any person in privity with the Company or any affiliate
of the Company), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, any other shares of
Common Stock or Class B common stock (together, with the Common Stock,
the "Capital Stock") or any securities convertible into Capital Stock,
or exercisable, or exchangeable for, shares of Capital Stock; or
publicly announce an intention to effect any such transaction, for a
period of 270 days after the date of this Agreement; provided,
however, that the Company may grant options to purchase Common Stock
or issue and sell Common Stock, in each case pursuant to any employee
or director incentive plan, stock option plan, stock ownership plan,
stock purchase plan or dividend reinvestment plan of the Company in
effect at the Execution Time, the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of options
outstanding at the Execution Time and the Company may issue Common
Stock issuable upon the conversion of Class B common stock in
accordance with the Certificate of Incorporation of the Company.
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(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp
or transfer taxes in connection with the original issuance and sale of
the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the registration of the Securities
under the Exchange Act and the listing of the Securities on the New
York Stock Exchange; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such registration
and qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing
fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such filings); (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special
counsel) for the Company and the Selling Stockholders; and (x) all
other costs and expenses incident to the performance by the Company
and the Selling Stockholders of their obligations hereunder; provided,
however, that the Selling Stockholders agree to pay their
proportionate share of the underwriting discount or commission, any
stamp or transfer taxes applicable to their Securities and the fees
and expenses of counsel (other than counsel retained on behalf of the
Selling Shareholders by the Company at its expense, as provided in
(ix) above), accountants and tax advisors retained by such Selling
Stockholders.
(i) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the
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National Association of Securities Dealers, Inc. (the "NASD") or the
NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness
of the Registration Statement. Xxxxxxx Xxxxx Xxxxxx Inc. will notify
the Company as to which Participants will need to be so restricted.
The Company will direct the removal of such transfer restrictions upon
the expiration of such period of time.
(j) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed
Share Program.
Furthermore, the Company covenants with Xxxxxxx Xxxxx Barney Inc.
that the Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) Such Selling Stockholder will not take any action designed to
or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(b) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of (i) any change in
information in the Registration Statement or the Prospectus relating
to such Selling Stockholder or (ii) any new material information
relating to the Company or relating to any matter stated in the
Prospectus which comes to the attention of such Selling Stockholder.
(c) Such Selling Stockholder will comply with the agreement
contained in Section 5(i)(h).
(d) Such Selling Stockholder shall, at the Execution Time,
deliver to the Representatives a letter substantially in the form of
Exhibit A hereto addressed to the Representatives.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution
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Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to
the accuracy of the statements of the Company and the Selling Stockholders made
in any certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred at or
prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on
the Business Day following the day on which the public offering price
was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) Xxxxx Xxxxx L.L.P., counsel for the Company, shall have
furnished to the Representatives their opinion, dated the Closing Date
and addressed to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction set forth
on Annex A;
(ii) except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or
encumbrance;
(iii) (a) the Company's authorized equity
capitalization is as set forth in the Prospectus; the capital
stock of the Company conforms at to legal matters in all
material respects to the description thereof contained in the
Prospectus; and (b) the outstanding shares of Common Stock
(including the Securities being sold hereunder by the Selling
Stockholders) have been
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duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the
Company have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be fully paid and
nonassessable; the Securities being sold by the Selling
Stockholders have been duly authorized for trading on the
Nasdaq National Market and the Securities being sold hereunder
by the Company have been duly authorized for trading on the
Nasdaq National Market; the certificates for the Securities
are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or, to the knowledge of such counsel after due
inquiry, other rights to subscribe for the Securities; and, to
the knowledge of such counsel after due inquiry, except as set
forth in the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries,
including the Foreign Subsidiaries, as defined below, or its
or their property of a character required to be dis closed in
the Registration Statement which is not adequately disclosed
in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
and the statements in the Prospectus under the headings "U.S.
Tax Consequences to Non-U.S. Holders", "Shares Eligible for
Future Sales," "Business-Regulations", "Risk Factors -
Limitations on our ability to protect our intellectual
property rights could cause a loss in revenues and any
competitive advantage we hold, - Environmental compliance
costs and liabilities could have a material adverse effect on
our financial condition, - Provisions of our charter, bylaws
and our note agreement may discourage acquisition bids and
cause our common stock to trade at a discount to where it
otherwise may trade, and - Future sales of our common stock
could adversely affect its market price," insofar as such
statements summarize legal matters, agreements, documents, or
proceedings discussed therein, are accurate and fair summaries
of such legal matters, agreements, documents or proceedings;
(v) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time
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period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the
financial statements and other financial information contained
therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be, an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such
other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Named Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or its
Named Subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or
instrument to which the Company or its Named Subsidiaries is a
party or bound or to which its or their property is subject
and which is listed on Annex B, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the
Company or its Named Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its
Named Subsidiaries or any of its or their properties; and
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(x) Except for the rights of the Selling Stockholders
to sell the Securities set forth in Schedule II, to the
knowledge of such counsel after due inquiry, no holders of
securities of the Company have rights to the registration of
such securities under the Registration Statement.
In addition, such counsel shall state that in connection with
the preparation of the Registration Statement and the Prospectus, such
counsel has participated in various discussions and meetings with
officers and other representatives of the Company, representatives of
the independent public accountants of the Company and representatives
of the Underwriters at which the contents of the Registration Statement
and Prospectus were discussed and, although such counsel is not passing
upon and does not assume responsibility for the accuracy and
completeness of the statements contained in the Registration Statement
or Prospectus (except as and to the extent stated in subparagraph
(iii)(a) and (iv) above), on the basis of the foregoing nothing has
come to the attention of such counsel that causes it to believe that
the Registration Statement (other than the (i) financial statements and
related schedules contained therein or omitted therefrom (including the
notes to the financial statements and auditors' reports on the
financial statements) and (ii) the other financial information
contained therein or omitted therefrom) at the time such Registration
Statement became effective or was last deemed amended contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus (other than (i) the
financial statements and related schedules contained therein or omitted
therefrom (including the notes to the financial statements and the
auditors' reports on the financial statements) and (ii) the other
financial information contained therein or omitted therefrom, as to
which such counsel need not express an opinion) at the date of such
Prospectus and on the Closing Date, and as of the time of purchase or
additional time of purchase, as the case may be, 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, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may (A) rely as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date and (B) limit their opinion to the Delaware General
Corporation Law, the general contract law of the State of New York, the
laws of the United States of America and the laws of the State of
Texas, in each case as in effect on the date of such opinion.
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(c) Xxxxx Xxx & Bok, foreign counsel for the Company, shall
have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, to the effect that:
(i) Hydril Private Limited has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction set forth
on Annex A;
(ii) all the outstanding shares of capital stock of
Hydril Private Limited have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding
shares of capital stock of Hydril Private Limited are owned by
the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iii) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any
property or assets of Hydril Private Limited pursuant to, (i)
the charter or by-laws of Hydril Private Limited, (ii) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which Hydril
Private Limited is a party or bound or to which their property
is subject and which is listed on Annex B, or (iii) any
statute, law, rule, regulation, judgment, order or decree
applicable to Hydril Private Limited of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over Hydril Private
Limited or any of its properties.
(d) Xxxxx & XxXxxxxx, foreign counsel for the Company, shall
have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, to the effect that:
(i) [non- U.S. subsidiary] (the "Foreign Subsidiary",
and together with Hydril Private Limited, the "Foreign
Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing
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under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction set forth
on Annex A;
(ii) all the outstanding shares of capital stock of
the Foreign Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding
shares of capital stock of the Foreign Subsidiary are owned by
the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iii) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any
property or assets of the Foreign Subsidiary pursuant to, (i)
the charter or by-laws of the Foreign Subsidiary, (ii) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Foreign Subsidiary is a party or bound or to which their
property is subject and which is listed on Annex B, or (iii)
any statute, law, rule, regulation, judgment, order or decree
applicable to the Foreign Subsidiary of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Foreign
Subsidiary or any of its properties.
(e) Xxxxxxxxx & Osha L.L.P., intellectual property counsel for
the Company, shall have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) the Company owns or has obtained licenses for all
applications relating to the Intellectual Property (as defined
below) owned or used by or licensed to the Company;
"Intellectual Property" means patents, patent applications,
trademarks, service marks, trade secrets and other proprietary
information and materials;
(ii) except as described in the Prospectus, (A) there
are no rights of third parties to any Intellectual Property
owned by or licensed to the
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Company or that is necessary for the conduct of its business;
(B) there is no infringement by third parties of any such
Intellectual Property; (C) there is no pending or threatened
action, suit, proceeding or claim by others challenging the
rights of the Company in or to such Intellectual Property, and
such counsel is unaware of any facts which would form a
reasonable basis for any such claim; (D) there is no pending
or threatened action, suit, proceeding or claim by others
challenging the validity or scope of such Intellectual
Property, and such counsel is unaware of any facts which would
form a reasonable basis for any such claim; (E) there is no
pending or threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other
proprietary right of others, and such counsel is unaware of
any facts which would form a reasonable basis for any such
claim; (F) there is no patent or patent application which
contains claims that dominate or may dominate any such
Intellectual Property or that interferes with the issued or
pending claims of any such Intellectual Property; and (G)
there is no prior art that may render any patent held by the
Company invalid or any patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office;
(iii)(A) the statements in the Prospectus under the
captions "Risk Factors -- Risks Relating to Our Business --
Limitations on our ability to protect our intellectual
property rights could cause a loss in revenues and any
competitive advantage we hold" and "Business -- Our Emphasis
on Research and Development" and (B) other references in the
Prospectus to patent and licensing matters (collectively, the
"Statements"), insofar as such Statements constitute a summary
of legal matters, documents or proceedings referred to
therein, are accurate and fairly present the information
purported to be shown;
(iv) the Statements, as of the date thereof, do not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make such Statements not
misleading in the context in which they are made; and
(v) Schedule A to such opinion is a listing of all of
the Company's Intellectual Property, and, with respect to the
patent applications listed on such Schedule A, such counsel is
unaware of any defects in the prosecution of any such
applications that would irrevocably foreclose pursuit of the
patent rights thereunder.
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(f) O'Melveny and Xxxxx LLP, counsel for the Selling
Stockholders shall have furnished to the Representatives their opinion
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) this Agreement and the Custody Agreement and
Power of Attorney have been duly authorized, executed and
delivered by each of the Selling Stockholders listed on
Schedule IV hereto (collectively, the "Named Stockholders"),
the Custody Agreement is valid and binding on the Named
Stockholders and each Named Stockholder has full legal right
and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the
Securities being sold by such Named Stockholder hereunder;
(ii) assuming that each Underwriter acquires its
interest in the Securities it has purchased from each Selling
Stockholder without notice of any adverse claim (within the
meaning of Section 8-105 of the [New York] [California]
Uniform Commercial Code), each Underwriter that has purchased
such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by
making payment therefor as provided herein, and that has had
such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section
8-102(a)(17) of the [New York] [California] Uniform Commercial
Code) to such Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of
Section 8-105 of the [New York] [California] Uniform
Commercial Code) may be asserted against such Underwriter with
respect to such Securities; and based solely on an examination
of the stock ledger of the Company and the certificates
representing such Securities, each Selling Stockholder is the
record and beneficial owner of the Securities to be sold by it
hereunder free and clear of all liens, encumbrances, equities
and claims, other than pursuant to the Custody Agreement;
(iii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by any Named Stockholder of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such
other approvals (specified in such opinion) as have been
obtained; and
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(iv) neither the sale of the Securities being sold by
any Named Stockholder nor the consummation of any other of the
transactions herein contemplated by any Named Stockholder or
the fulfillment of the terms hereof by any Named Stockholder
will conflict with, result in a breach or violation of, or
constitute a default under any law or, as applicable, the
charter or By-laws of the Named Stockholder or the terms of
any indenture or other agreement or instrument known to such
counsel and to which any Named Stockholder or, as applicable,
any of its subsidiaries is a party or bound, or any judgment,
order or decree known to such counsel to be applicable to any
Named Stockholder or, as applicable, any of its subsidiaries
of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over any
Named Stockholder or, as applicable, any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of California, New York and, the General Corporation
Law of the State of Delaware or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders or responsible officers
thereof and public officials.
(g) Xxxx Xxxxxx, Esq., counsel for Pepperdine University (the
"University"), shall have furnished to the Representatives their
opinion dated the Closing Date and addressed to the Representatives, to
the effect that:
(i) this Agreement and the Custody Agreement and
Power of Attorney have been duly authorized, executed and
delivered by the University, the Custody Agreement is valid
and binding on the University and the University has full
legal right and authority to sell, transfer and deliver in the
manner provided in this Agreement and the Custody Agreement
the Securities being sold by the University hereunder;
(ii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the University of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such
other approvals (specified in such opinion) as have been
obtained; and
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(iii) neither the sale of the Securities being sold
by the University nor the consummation of any other of the
transactions herein contemplated by the University or the
fulfillment of the terms hereof by the University will
conflict with, result in a breach or violation of, or
constitute a default under any law or, as applicable, the
charter or By-laws of the University or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the University or, as applicable, any of
its affiliates is a party or bound, or any judgment, order or
decree known to such counsel to be applicable to the
University or, as applicable, any of its affiliates of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the University or,
as applicable, any of its affiliates.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of California, New York and, the General Corporation
Law of the State of Delaware or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of the University or responsible officers thereof and
public officials.
(h) Xxxxxx, Xxxxxxx & X'Xxxxxx, counsel for Pomona College
(the "College"), shall have furnished to the Representatives their
opinion dated the Closing Date and addressed to the Representatives, to
the effect that:
(i) this Agreement and the Custody Agreement and
Power of Attorney have been duly authorized, executed and
delivered by the College, the Custody Agreement is valid and
binding on the College and the College has full legal right
and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the
Securities being sold by the College hereunder;
(ii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the College of the transactions contemplated
herein, except such as may have been obtained under the Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(iii) neither the sale of the Securities being sold
by the College nor the consummation of any other of the
transactions herein contemplated by
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the College or the fulfillment of the terms hereof by the
College will conflict with, result in a breach or violation
of, or constitute a default under any law or, as applicable,
the charter or By-laws of the College or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the College or, as applicable, any of its
affiliates is a party or bound, or any judgment, order or
decree known to such counsel to be applicable to the College
or, as applicable, any of its affiliates of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the College or, as
applicable, any of its affiliates.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of California, New York and, the General Corporation
Law of the State of Delaware or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of the College or responsible officers thereof and public
officials.
(i) The Representatives shall have received from Cravath,
Swaine & Xxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require,
and the Company and each Selling Stockholder shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(j) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
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(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse effect
on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(k) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder or
the Chairman of the Board or the President and the principal financial
or accounting officer thereof, dated the Closing Date, to the effect
that the representations and warranties of such Selling Stockholder in
this Agreement are true and correct in all material respects on and as
of the Closing Date to the same effect as if made on the Closing Date.
(l) The Representatives shall have received certified copies
of the charter, bylaws or any other constitutive documents of each
Selling Stockholder listed on Schedule V hereto as well as certified
copies of any corporate action, such as resolutions, or any other
action authorizing the consummation of the transactions contemplated
herein and the fulfillment of the terms hereof by such Selling
Stockholder.
(m) Deloitte & Touche LLP shall have furnished to the
Representatives letters, at the Execution Time and at the Closing Date,
dated respectively as of the Execution Time and as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and
the applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the six-month period
ended June 30, 2000 and as at June 30, 2000, in accordance with
Statement on Auditing Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Prospectus and reported on by them comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related rules and
regulations adopted by the Commission;
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(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
six-month period ended June 30, 2000, and as at June 30, 2000;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and all committees of the Company and
the Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to December 31, 1999, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of
the Act and with the related rules and regulations
adopted by the Commission with respect to
registration statements on Form S-1; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
June 30, 2000, there were any changes, at a specified
date not more than five days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the Company
or decreases in working capital of the Company and
its subsidiaries as compared with the amounts shown
on the June 30, 2000, consolidated balance sheet
included in the Registration Statement and the
Prospectus, or for the period from July 1, 2000 to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding [year] [quarter] in revenues or increases
in gross loss, operating loss or in total or per
share amounts of net loss of the Company and its
subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the
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significance thereof unless said explanation is not
deemed necessary by the Representatives;
(3) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information), and
Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
The Company shall have received from Deloitte & Touche LLP
(and furnished to the Representatives) a report with respect to a
review of unaudited interim financial information of the Company for
the eight quarters ending December 31, 1999, in accordance with
Statement on Auditing Standards No. 71.
(n) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(h) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(o) The Securities shall have been duly authorized for trading
on the Nasdaq National Market, and satisfactory evidence of such
actions shall have been provided to the Representatives.
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(p) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer and director of the Company, the relatives of
Xxxxx X. Xxxxxx and from each stockholder named in Schedule III hereto
addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Stockholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & Xxxxx, counsel for the
Underwriters, at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Xxxxxxx Xxxxx Barney on demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities. If the Company is required to make any
payments to the Underwriters under this Section 7 because of any Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling Stockholders
so refusing, unable or failing to satisfy any such condition pro rata in
proportion to the percentage of Securities to be sold by each shall reimburse
the Company on demand for all amounts so paid unless such refusal, inability or
failure to satisfy any such condition is attributable to any action or inaction
by the Company which makes the satisfaction of such condition commercially
unreasonable.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or
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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 Securities as originally filed or in any
amendment thereof, or in any 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 necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon 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 any Underwriter through the Representatives
specifically for inclusion therein; provided further, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Representatives, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such person, a copy of the Prospectus. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Company agrees to indemnify and hold harmless Xxxxxxx
Xxxxx Xxxxxx Inc., the directors, officers, employees and agents of Xxxxxxx
Xxxxx Barney Inc. and each person, who controls Xxxxxxx Xxxxx Xxxxxx Inc. within
the meaning of either the Act or the Exchange Act ("Xxxxxxx Xxxxx Barney Inc.
Entities"), from and against any and all losses, claims, damages and liabilities
to which they may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim), insofar
as such losses, claims damages or liabilities (or actions in respect thereof)
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the prospectus wrapper material
prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the
Prospectus or any preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein, when considered
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in conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the securities which immediately following the Effective Date of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon 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 Xxxxxxx
Xxxxx Xxxxxx Inc. specifically for inclusion therein.
(c) Each Selling Stockholder severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act and each
other Selling Stockholder, if any, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Selling Stockholder may otherwise have.
(d) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
Selling Stockholder, each of its officers, directors and each person who
controls such Selling Stockholder within the meaning of the Act, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the Company by
or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and each Selling Stockholder acknowledge that
the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting" or "Plan of
Distribution", (i) the list of underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(e) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in
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respect thereof is to be made against the indemnifying party under this Section
8, notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b), (c) or (d) above 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 from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a), (b), (c) or (d) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding
and does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of the indemnified party. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to Section 8(b) hereof in respect of such action or proceeding, then in addition
to such separate firm for the indemnified parties, the indemnifying party shall
be liable for the reasonable fees and expenses of not more than one separate
firm (in addition to any local counsel) for Xxxxxxx Xxxxx Barney Inc., the
directors, officers, employees and agents of Xxxxxxx Xxxxx Xxxxxx Inc., and all
persons, if any, who control Xxxxxxx Xxxxx Barney Inc. within the meaning of
either the Act or the Exchange Act for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program.
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(f) In the event that the indemnity provided in paragraph (a),
(b), (c) or (d) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the Selling
Stockholders and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, one or more of the Selling
Stockholders and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, by the Selling Stockholders on the one hand and by the Underwriters on
the other from the offering of the Securities; provided, however, that in no
case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
Company, the Selling Stockholders and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company, of the Selling
Stockholders on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company and by
the Selling Stockholders shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by each of them, and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company, the Selling Stockholders on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (f), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company or a Selling Stockholder within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company and each director, officer, employee
and agent of the
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Selling Stockholder shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(f).
(g) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the initial public offering
price (after deduction of underwriting discount or commission) of the Securities
sold by such Selling Stockholder to the Underwriters. The Company and the
Selling Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company and Xxxxx X. Xxx and Xxxxxxx X. Xxxxxx, as Attorneys-in-Fact for
the Selling Stockholders prior to delivery of and payment for the Securities, if
at any time prior to such time (i) trading in the Company's Common Stock shall
have been suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on the Nasdaq National
Market, (ii) a banking moratorium shall have been
39
39
declared either by Federal or New York State authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers, of each Selling Stockholder and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel
(fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx
Xxxxxx Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Hydril Company, Chief Financial Officer, (fax no.: (000) 000-0000))
and confirmed to it at Hydril Company, 0000 Xxxxx Xxx Xxxxxxx Xxxxxxx X,
Xxxxxxx, XX 00000, attention of the Chief Financial Officer; or if sent to any
Selling Stockholder, will be mailed, delivered or telefaxed and confirmed to it
at the address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
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40
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or
any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended
or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
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"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
HYDRIL COMPANY,
by
-------------------------------
Name:
Title:
[Selling Stockholder],
by
-------------------------------
Name:
Title: Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxx Xxxxxxxx Incorporated
Xxxxxxx & Company International
By: Xxxxxxx Xxxxx Barney Inc.
By:
------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing Agreement.
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SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Xxxxxxx Xxxxx Xxxxxx Inc......................................
Credit Suisse First Boston Corporation........................
Xxxx Xxxxxxxx International...................................
Xxxxxxx & Company International...............................
---------
Total.................................................. 7,500,000
=========
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SCHEDULE II
MAXIMUM
NUMBER OF NUMBER OF
UNDERWRITTEN OPTION
SECURITIES TO BE SECURITIES TO
SELLING STOCKHOLDERS: SOLD BE SOLD
-------------------- ---------------- -------------
[names]
x/x X'Xxxxxxx & Xxxxx XXX
0000 Avenue of the Stars
Xxx Xxxxxxx, XX 00000-0000
attn: Xxxxxxx Xxxxxx, Esq.
telephone: (000) 000-0000
fax: (000) 000-0000
---------------- ------------
Total ................
================ ============
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SCHEDULE III
STOCKHOLDERS LOCK-UP PERIOD
46
SCHEDULE IV
SELLING STOCKHOLDERS
1. The Xxxxxx Institute
2. Trust under Paragraph V of the Will of Xxxxx X. Xxxxxx, Deceased
3. Xxxxxxx Xxxxx Xxxxxx Perpetual Trust
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SCHEDULE V
SELLING STOCKHOLDERS
4. Xxxx Xxxxxxx Trust
5. Xxxxxxx X. Xxxxxxxx
6. First Congregational Church of Los Angeles
7. Masonic Homes of California
8. Xxxxxxx X. Xxxxxxx
9. Harvard-Westlake School
10. Hospital of the Good Samaritan
11. The Xxxxxx of the Protestant Episcopal Church in Los Angeles
12. Los Angeles County Museum of Natural History Foundation
13. Xxx X. Xxxxx Trust
14. Xxxxxx Xxxxx Xxxxx
15. Xxxxxx X. Xxxx
16. Xxxxxxx Xxxxxx Xxxxxxxx Trust
17. St. Xxxxxxxx Episcopal Church
18. Xxxx X. Xxxx
19. Xxxx Xxxxxx
48
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
[LETTERHEAD OF OFFICER, DIRECTOR OR STOCKHOLDER OF
HYDRIL COMPANY]
Hydril Company
Public Offering of Common Stock
, 2000
---------
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston
Xxxx Xxxxxxxx Incorporated
Xxxxxxx & Company International
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Hydril
Company, a Delaware corporation (the "Company"), certain stockholders of the
Company and each of you as representatives of a group of Underwriters named
therein, relating to an underwritten public offering of Common Stock, $ 0.50 par
value (the "Common Stock" and together with the Class B common stock, the
"Capital Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with
49
respect to, any shares of Capital Stock of the Company or any securities
convertible into, or exercisable or exchangeable for such Capital Stock, or
publicly announce an intention to effect any such transaction, for a period of
[For the Company and the selling stockholders owning more than 5% of the
outstanding shares of the Company's Class B common stock prior to the IPO,
insert--210 days] [for directors, executive officers, relatives of Xxxxx X.
Xxxxxx and stockholders owning more than 0.5% but 5% or less of the Company's
Class B common stock prior to the IPO, insert--180 days] after the date of the
Underwriting Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc., shares of Capital Stock
transferred to a trust or family member of the undersigned, provided that such
transferee agrees in writing with the Underwriters to be bound by this letter,
and Class B common stock converted into Common Stock in accordance with the
Certificate of Incorporation of the Company.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
[SELLING STOCKHOLDER]
by_________________
Name:
Title: Attorney-in-Fact
