EXHIBIT 10.20
LONE STAR TECHNOLOGIES, INC.
9.00% SENIOR SUBORDINATED NOTES
DUE 2011
UNCONDITIONALLY GUARANTEED AS TO THE PAYMENT OF PRINCIPAL, PREMIUM,
IF ANY, AND INTEREST BY THE GUARANTORS NAMED IN SCHEDULE II HERETO
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PURCHASE AGREEMENT
May 23, 2001
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
CIBC World Markets Corp.
Dresdner Kleinwort Xxxxxxxxxxx Securities LLC
RBC Dominion Securities Corporation
The Xxxxxxxx-Xxxxxxxx Company, LLC
As representatives of the several Purchasers
named in Schedule I hereto,
c/x Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Lone Star Technologies, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$150 million principal amount of the Senior Subordinated Notes specified above
(the "Notes"). The Securities will be unconditionally guaranteed on a senior
subordinated basis as to the payment of principal, premium, if any, and interest
(the "Guarantees") by each of the subsidiaries of the Company named in Schedule
II hereto (collectively, the "Guarantors"). The Notes and the Guarantees are
hereinafter collectively called the "Securities."
1. The Company and each Guarantor, jointly and severally, represents
and warrants to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated May 14, 2001 (the
"Preliminary Offering Circular") and an offering circular, dated May
23, 2001 (the "Offering Circular", in each case including the
international supplement thereto, have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary
Offering Circular or the Offering Circular shall be deemed to refer to
and include the Company's most recent Annual Report on Form 10-K and
all subsequent documents filed by the Company with the United States
Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a), 13(c)
or 15(d) of the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or prior to the date of the
Preliminary Offering Circular or the Offering Circular, as the case
may be, and any reference to the Preliminary Offering Circular or
the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include
(i) any documents filed with the Commission pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Circular or the Offering Circular, as the case
may be, and prior to such specified date and (ii) any Additional
Issuer Information (as defined in Section 5(f)) furnished by the
Company prior to the completion of the distribution of the
Securities, and all documents filed under the Exchange Act and
included or incorporated by reference in the Preliminary Offering
Circular or the Offering Circular, as the case may be, or any
amendment or supplement thereto are hereinafter called the "Exchange
Act Reports". The Exchange Act Reports, when they were or are filed
with the Commission, conformed or will conform in all material
respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder. The
Preliminary Offering Circular or the Offering Circular and any
amendments or supplements thereto and the Exchange Act Reports did
not and will not, as of their respective dates, contain an 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 this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a
Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(b) None of the Company, the Guarantors nor any of their
respective subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Offering Circular any loss or interference with its business
material to any of Lone Star Technologies, Inc., Fintube Technologies,
Inc., Lone Star Steel Company or Bellville Tube Corporation from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company, the Guarantors and their
respective subsidiaries, otherwise than as set forth or contemplated in
the Offering Circular and otherwise than as set forth on Schedule III
hereto;
(c) Each of the Company, the Guarantors and their respective
subsidiaries has good and marketable title to all real property and
good and marketable title to all personal property owned by it, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Offering Circular or such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company, the
Guarantors or their respective subsidiaries; and any real property and
buildings held under lease by the Company, the Guarantors or their
respective subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
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(d) Each of the Company and each Guarantor other than Fintube
Technologies, Inc., (the "Delaware and Texas Guarantors") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective state of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular, and each such entity
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which the failure so to qualify would have a material
adverse effect on such entity; and each subsidiary of the Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
(e) Fintube Technologies, Inc. has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Oklahoma, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which the failure so to qualify would
have a material adverse effect on such entity;
(f) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each direct or indirect subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares and except
.as otherwise set forth in the Offering Circular) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims (other than the pledge of certain stock of Aletas y
Birlos, S.A. de C.V. and Xxxxxx y Birlos Mexicana, S.A. de C.V.);
(g) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of May 29, 2001 (the
"Indenture") among the Company, the Guarantors and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee (the "Trustee"), under
which they are to be issued, which will be substantially in the form
previously delivered to you; the Indenture has been duly authorized
and, when executed and delivered by the Company, the Guarantors and the
Trustee, the Indenture will constitute a valid and legally binding
instrument, enforceable against the Company and the Guarantors in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(h) Each of the Guarantees has been duly authorized and, upon
the due authorization, issuance and delivery of the related Notes and
the due endorsement of such Guarantee thereon, will have been duly
executed, authenticated, issued and delivered and will constitute a
valid and legally binding obligation of the respective Guarantor
entitled to the benefits provided by the Indenture under which they are
to be issued and enforceable against the respective Guarantor in
accordance with its terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or
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affecting creditors' rights and to general equity principles, and the
Guarantees will conform in all material respects to the description
thereof in the Offering Circular and will be in substantially the form
previously delivered to you;
(i) The exchange and registration rights agreement, to be dated
as of May 29, 2001 (the "Registration Rights Agreement"), among the
Company, the Guarantors and the Purchasers has been duly authorized by
the Company and each of the Guarantors and, when executed and delivered
by the Company and each Guarantor, the Registration Rights Agreement
will constitute a valid and legally binding instrument of the Company
and each Guarantor, enforceable against the Company and the Guarantors
in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. Pursuant to the Registration Rights Agreement, the
Company and the Guarantors will agree to file with the Commission,
under the circumstances set forth therein, (i) a registration statement
under the United States Securities Act of 1933, as amended (the "Act"),
relating to another series of debt securities of the Company with terms
substantially identical to the Securities (the "Exchange Securities")
to be offered in exchange for the Securities (the "Exchange Offer"),
(ii) to the extent required by the Registration Rights Agreement, a
shelf registration statement pursuant to Rule 415 of the Act relating
to the resale by certain holders of the Securities and (iii) to the
extent required by the Registration Rights Agreement, a market making
prospectus, and in each case, to use its reasonable best efforts to
cause such registration statements to be declared effective. The
Exchange Securities have been duly authorized for issuance by the
Company, and when issued and authenticated in accordance with the terms
of the Indenture will be the valid and legally binding obligations of
the Company, entitled to the benefits provided by the Indenture,
enforceable against the Company in accordance with their terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles. The Guarantees with respect to
the Exchange Securities have been duly authorized for issuance by each
Guarantor, and when issued in accordance with the terms of the
Indenture will be the valid and legally binding obligations of such
Guarantor, entitled to the benefits provided by the Indenture,
enforceable against the respective Guarantors in accordance with their
terms subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles. The
Registration Rights Agreement, the Exchange Securities and the
Guarantees with respect to the Exchange Securities will conform, in all
material respects, to the descriptions thereof in the Offering Circular
and will be in substantially the form previously delivered to you;
(j) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U, and X of the Board of
Governors of the Federal Reserve System;
(k) Prior to the date hereof, none of the Company, the
Guarantors or any of their respective affiliates has taken any action
which is designed to or which has constituted or which might have been
expected to cause or result in stabilization or manipulation of the
price of any security of the Company or any Guarantor in connection
with the offering of the Securities and the Guarantees;
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(l) The issue and sale of the Securities and the compliance by
the Company and the Guarantors with all of the provisions of the
Securities, the Guarantees, the Registration Rights Agreement, the
Indenture and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other material agreement or instrument to which the Company, the
Guarantors or any of their respective subsidiaries is a party or by
which the Company, the Guarantors or any of their respective
subsidiaries is bound or to which any of the property or assets of the
Company, the Guarantors or any of their respective subsidiaries is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or any
Guarantor or any statute or any material order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company, the Guarantors or any of their respective subsidiaries or any
of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or
the consummation by the Company or the Guarantors of the transactions
contemplated by this Agreement, the Registration Rights Agreement or
the Indenture, except for the filing of a registration statement by the
Company with the Commission pursuant to the United States Securities
Act of 1933, as amended (the "Act"), pursuant to Section 5(k) hereof
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(m) None of the Company, the Guarantors or any of their
respective subsidiaries is in violation of its Certificate of
Incorporation or By-laws or in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(n) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions "Certain
United States Federal Income Tax Considerations," "Certain
Relationships and Related Transactions," "Description of Other
Indebtedness" and "Underwriting," insofar as they purport to describe
the provisions of the laws and documents referred to therein, fairly
summarize such provisions in all material respects;
(o) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company, the
Guarantors or any of their respective subsidiaries is a party or of
which any property of the Company, the Guarantors or any of their
respective subsidiaries is the subject which would reasonably be
expected to have a material adverse effect on the current or future
financial position, shareholders' equity or results of operations of
the Company, the Guarantors and their respective subsidiaries, taken as
a whole (a "Material Adverse Effect"); and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(p) When the Securities and the Guarantees are issued and
delivered pursuant to this Agreement, neither the Securities nor the
Guarantees will be of the same class (within the meaning of Rule 144A
under the United States Securities Act of 1933, as amended (the "Act"))
as securities of the Company or any Guarantor which are listed on a
national
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securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
(q) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
(r) Neither the Company nor any of the Guarantors is, and after
giving effect to the offering and sale of the Securities, none will be
an "investment company", as such term is defined in the United States
Investment Company Act of 1940, as amended (the "Investment Company
Act");
(s) None of the Company, the Guarantors, or any person acting on
its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Securities sold outside the
United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Securities Act and the Company, any affiliate of the
Company or any Guarantor and any person acting on its or their behalf
has complied with and will implement the "offering restriction" within
the meaning of such Rule 902;
(t) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Purchasers hereunder. The Company and
the Guarantors will take reasonable precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Act) of any Securities or
any substantially similar security issued by the Company, within six
months subsequent to the date on which the distribution of the
Securities has been completed (as notified to the Company by Xxxxxxx,
Sachs & Co.), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of
the Securities in the United States and to U.S. persons contemplated by
this Agreement as transactions exempt from the registration provisions
of the Securities Act;
(u) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries, and Xxxxxx and Xxxxxxx
Company who have certified certain financial statements of Bellville
Tube Corporation, are each independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(v) None of the Company or any of its subsidiaries is in
violation of any provisions of the Employee Retirement Income Security
Act of 1974, as amended, except for such violations which would not,
singly or in the aggregate, result in a Material Adverse Effect;
(w) Except as described in the Offering Circular and except as
such matters as would not, singly or in the aggregate, result in a
Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to
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the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (ii) the Company and
its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or to
the Company's knowledge threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Laws against the Company or any of its
subsidiaries and (iv) there are no events or circumstances that
might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency against or affecting
the Company or any of its subsidiaries relating to Hazardous
Materials or Environmental Laws; and
(x) The jurisdictions listed on Exhibit IV hereto are the only
jurisdictions where the Company owns or leases property or conducts any
business so as to require the Company to be qualified as a foreign
corporation in such jurisdiction, and there are no other jurisdictions
where the Company would be subject to material liability or disability
by reason of the failure to be so qualified.
2. Subject to the terms and conditions herein set forth, the Company
and each Guarantor agrees to issue and sell to each of the Purchasers, and each
of the Purchasers agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97.25% of the principal amount thereof, plus
accrued interest, if any, from May 29, 2001 to the Time of Delivery hereunder,
the principal amount of Securities set forth opposite the name of such Purchaser
in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons whom it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A or, (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co. for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer in Federal (same day) funds, by causing DTC to credit the Securities to
the account of Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the
certificates representing the Securities to be made available to Xxxxxxx, Xxxxx
& Co. for checking at least twenty-four hours
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prior to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on May 29, 2001
or such other time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree
upon in writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(j) hereof, will be delivered at such time and
date at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 12:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company and each Guarantor agrees, jointly and severally, with
each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Company nor
any Guarantor shall be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish the Purchasers with copies of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
written and electronic copies thereof in such quantities as you may from time to
time reasonably request, and if, at any time prior to the expiration of nine
months after the date of the Offering Circular, any event shall have occurred as
a result of which the Offering Circular as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Offering Circular is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering Circular,
to notify you and upon your request to prepare and furnish without charge to
each Purchaser and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended Offering
Circular or a supplement to the Offering Circular which will correct such
statement or omission or effect such compliance;
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(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company or any Guarantor that are substantially similar to the
Securities;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of Securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act;
(g) If requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), to make available to the holders of the Securities
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(i) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to holders of the Securities, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities or any class of securities of the Company or any
Guarantor is listed; and (ii) such additional public information concerning the
business and financial condition of the Company and the Guarantors as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders generally
or to the Commission);
(j) During the period of two years after the Time of Delivery, the
Company will not, and will use its best efforts not to permit any of its
"affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of
the Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them;
(k) To file and use its best efforts to cause to be declared or become
effective under the Securities Act, on or prior to 180 days after the Time of
Delivery, a registration statement on Form S-4 providing for the registration of
the Exchange Securities (including the Guarantees thereon), and the exchange of
the Securities for the Exchange Securities, all in a manner which will permit
persons who acquire the Exchange Securities to resell the Exchange Securities
pursuant to Section 4(1) of the Securities Act; and
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(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds."
6. Each of the Company and the Guarantors, jointly and severally,
covenants and agrees with the several Purchasers that the Company will pay or
cause to be paid the following: (i) the reasonable fees, disbursements and
expenses of the Company's counsel and accountants in connection with the issue
of the Securities and all other expenses in connection with the preparation,
printing and filing of the Preliminary Offering Circular and the Offering
Circular and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Purchasers and dealers; (ii) the cost of
printing or producing any Agreement among Purchasers, this Agreement, the
Indenture, the Registration Rights Agreement, the Blue Sky and Legal Investment
Memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all reasonable expenses in connection with the qualification
of the Securities and the Exchange Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and Legal Investment Memoranda
and the Exchange Securities; (iv) any fees charged by securities rating services
for rating the Securities and the Exchange Securities; (v) the cost of preparing
the Securities and the Exchange Securities; (vi) the reasonable fees and
expenses of the Trustee and any agent of the Trustee and the reasonable fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities and the Exchange Securities; (vii) any cost incurred in
connection with the designation of the Securities for trading in PORTAL; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and each of the Guarantors herein are, at and as
of the Time of Delivery, true and correct, the condition that the Company and
each of the Guarantors shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect to the
matters covered in paragraphs (i), (iii), (iv), (v), (vi), (vii), (x), (xiii)
and (xiv) of subsection (b) below, limited as to matters of Federal, New York
and Delaware General Corporate law only, as well as such other related matters
as you may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such
matters;
(b) Xxxxxxxxx & Xxxxxxxx LLP, counsel for the Company and the
Guarantors, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company and each of the Delaware and Texas Guarantors
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the
10
State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Offering Circular;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction listed on Schedule IV;
(iii) This Agreement has been duly authorized by the Company and
each of the Delaware and Texas Guarantors, and duly executed and
delivered by the Company and each of the Guarantors;
(iv) The Notes have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture and enforceable against the Company in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Notes and the Indenture conform to the descriptions thereof in the
Offering Circular in all material respects;
(v) The Guarantees have been duly authorized by each of the
Delaware and Texas Guarantors, and have been duly executed, issued and
delivered by each of the Guarantors and constitute valid and legally
binding obligations of the Guarantors entitled to the benefits provided
by the Indenture and enforceable against the Guarantors in accordance
with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Guarantees conform in all material respects to the
descriptions thereof in the Offering Circular;
(vi) The Exchange Securities have been duly authorized by the
Company;
(vii) The Guarantees with respect to the Exchange Securities
have been duly authorized by the Delaware and Texas Guarantors;
(viii) The Indenture has been duly authorized by the Company and
each of the Delaware and Texas Guarantors, and executed and delivered
by the Company and each of the Guarantors and constitutes a valid and
legally binding instrument, enforceable against such parties in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ix) The Registration Rights Agreement has been duly authorized
by the Company and each of the Delaware and Texas Guarantors, and
executed and delivered by the Company and each of the Guarantors and
constitutes a valid and legally binding instrument, enforceable against
such parties in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(x) The issue and sale of the Securities and the Guarantees and
the compliance by the Company and the Guarantors with all of the
provisions of the Securities and the Guarantees, the Indenture, the
Registration Rights Agreement and this Agreement and the
11
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject and, in each such case, identified to such
counsel in an Officer's Certificate, nor will such actions result in
any violation of the provisions of the Certificate of Incorporation
or By-laws of the Company or any statute, rule or regulation, or to
such counsel's knowledge, any order of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
(xi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the
consummation by the Company and the Guarantors of the transactions
contemplated by this Agreement or the Indenture except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(xii) The statements set forth in the Offering Circular under
the caption "Description of Notes", and, insofar as they purport to
constitute a summary of the terms of the Securities under the captions
"Certain United States Federal Income Tax Considerations," "Certain
Relationships and Related Transactions," "Description of Other
Indebtedness" and "Underwriting," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(xiii) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939 with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Purchasers in the manner
contemplated by this Agreement;
(xiv) Such counsel have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements therein and any statistical data included within such
financial statements, as to which such counsel need express no opinion)
contained as of its date or contains as of the Time of Delivery an
untrue statement of a material fact or omitted or omits, as the case
may be, to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and
(xv) Each of the Company and the Guarantors is not an
"investment company", as such term is defined in the Investment
Company Act;
(c) Xxxxxxx, Xxxxx, Stamper, Nally, Fallis & Xxxxxxxxx, Inc., special
Oklahoma counsel to the Company and the Guarantors, (or other Oklahoma counsel
reasonably satisfactory to you) shall have furnished to you their written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
that:
12
(i) Fintube Technologies, Inc. has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Oklahoma, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Offering Circular;
(ii) all of the issued shares of capital stock of Fintube
Technologies, Inc. have been duly and validly authorized and issued and
are fully paid and non-assessable;
(iii) this Agreement has been duly authorized by Fintube
Technologies, Inc.;
(iv) the Guarantee by Fintube Technologies, Inc. with respect to
the Notes has been duly authorized by Fintube Technologies, Inc.;
(v) the Guarantee by Fintube Technologies, Inc. with respect to
the Exchange Securities has been duly authorized by Fintube
Technologies, Inc.;
(iv) the Indenture has been duly authorized by Fintube
Technologies, Inc.; and
(iv) the Registration Rights Agreement has been duly authorized
by Fintube Technologies, Inc.;
(d) Xxxxxx X. Xxxxxx, Vice President, General Counsel and Secretary of
the Company, shall have furnished to you his written opinion, dated the Time of
Delivery, in form and substance satisfactory to you that:
(i) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(ii) all of the issued shares of capital stock of each United
States subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares and except as otherwise set forth in the
Offering Circular) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iii) other than as set forth in the Offering Circular, there
are no legal or governmental proceedings pending to which the Company,
the Guarantors or any of their respective subsidiaries is a party or of
which any property of the Company, the Guarantors or any of their
respective subsidiaries is the subject which, if determined adversely
to the Company, the Guarantors or any of their respective subsidiaries,
would individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company, any Guarantor or any of
their respective subsidiaries; and no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
and
(iv) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound.
13
(e) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, each of Xxxxxx Xxxxxxxx LLP and
Xxxxxx and Xxxxxxx Company shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II and Xxxxx XXX hereto,
respectively;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement and in
the Offering Circular;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's and any Guarantor's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
and any Guarantor's debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Offering
Circular; or (v) the occurrence of any material adverse change in the existing,
financial, political or economic conditions in the United States or elsewhere
which, in the judgment of the Representatives, would materially and adversely
affect the financial markets or the markets for the Securities and other debt
securities;
(i) The Securities have been designated for trading on PORTAL; and
(j) The Company and the Guarantors shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the Company
and the Guarantors satisfactory to you as to the accuracy of the representations
and warranties of the Company and the Guarantors herein at and as of such Time
of Delivery, as to the performance by the Company and the Guarantors of all of
their respective obligations hereunder to be performed at or prior to such Time
of Delivery, as to the matters set forth in subsections (b)(x), (f) and (g) of
this Section and as to such other matters as you may reasonably request.
14
8. (a) The Company and each of the Guarantors will, jointly and
severally, indemnify and hold harmless each Purchaser against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company and the Guarantors shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company and
each of the Guarantors against any losses, claims, damages or liabilities to
which the Company and any Guarantor may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Circular or the Offering Circular, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Offering Circular or the Offering Circular or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use
therein; and will reimburse the Company and the Guarantors for any legal or
other expenses reasonably incurred by the Company and the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel selected by the indemnifying party and satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or
15
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above and provided the indemnifying party was not
prejudiced by such failure, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and the Purchasers on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors on the one hand and the Purchasers on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Purchasers, in
each case as set forth in the Offering Circular. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Purchasers on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, each of the Guarantors and the Purchasers agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to investors were offered to
investors exceeds the amount of any damages which such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Purchasers' obligations in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Act; and the obligations of the Purchasers under this Section 8
shall be in addition to any liability which the respective Purchasers may
otherwise have and shall extend, upon
16
the same terms and conditions, to each officer and director of the Company
and the Guarantors and to each person, if any, who controls the Company or
any Guarantor within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company or the Guarantors, except for the expenses to be borne
by the Company, the Guarantors and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Guarantors and the several
Purchasers, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Purchaser or any controlling person of any
Purchaser, or the Company, the Guarantors or any officer or director or
controlling person of the Company or a Guarantor, and shall survive delivery of
and payment for the Securities.
17
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; PROVIDED, HOWEVER, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company, the Guarantors and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and the Guarantors and each person who controls the Company, a Guarantor or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
18
If the foregoing is in accordance with your understanding, please sign
and return to us one counterpart hereof for the Company and each of the
Representatives plus one for each counsel, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Lone Star Technologies, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary
Environmental Holdings, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Zinklahoma, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Lone Star Steel Company
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Lone Star Logistics, Inc.
19
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Lone Star Steel International, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Lone Star Steel Sales Company
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Rotac, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
T & N Lone Star Warehouse Co.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Texas & Northern Railway Company
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Lone Star ST Holdings, Inc.
20
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Fintube Technologies, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Fintube Canada, Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Bellville Tube Corporation
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
CIBC World Markets Corp.
Dresdner Kleinwort Xxxxxxxxxxx Securities LLC
RBC Dominion Securities Corporation
The Xxxxxxxx-Xxxxxxxx Company, LLC
By: /s/ XXXXXXX, XXXXX & CO.
------------------------------------------------
(Xxxxxxx, Xxxxx & Co.)
21
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- ------------
Xxxxxxx, Xxxxx & Co..................................... $82,500,000
Xxxxxxx Xxxxx Xxxxxx Inc................................ 30,000,000
Banc of America Securities LLC.......................... 7,500,000
CIBC World Markets Corp. ............................... 7,500,000
Dresdner Kleinwort Xxxxxxxxxxx Securities LLC........... 7,500,000
RBC Dominion Securities................................. 7,500,000
The Xxxxxxxx-Xxxxxxxx Company, LLC...................... 7,500,000
-----------------
Total................................. $150,000,000
=================
22
SCHEDULE II
GUARANTORS
Environmental Holdings, Inc.
Zinklahoma, Inc.
Lone Star Steel Company
Lone Star Logistics, Inc.
Lone Star Steel International, Inc.
Lone Star Steel Sales Company
Rotac, Inc.
T & N Lone Star Warehouse Co.
Texas & Northern Railway Company
Lone Star ST Holdings, Inc.
Fintube Technologies, Inc.
Fintube Canada, Inc.
Bellville Tube Corporation
23
SCHEDULE III
Changes per Section 1(b)
24
SCHEDULE IV
Foreign Qualifications
25
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, each Purchaser agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Securities, except with its affiliates or with the prior written
consent of the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article
A-1
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document
may otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
A-2
ANNEX II
Pursuant to Section 7(e) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(iv) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles
applied on the basis substantially consistent with the basis
for the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived
any unaudited condensed financial statements referred to in
clause (A) and any unaudited income statement data and balance
sheet items included in the Offering Circular and referred to
in clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated
financial statements included in the Offering Circular;
A-3
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Circular do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance
sheet included in the Offering Circular except in each case
for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred
or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
A-4
ANNEX III
Pursuant to Section 7(e) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The audited selected financial information with respect to
the consolidated results of operations and financial position of
Bellville Tube Corporation for the three-month period ended on March
31, 2000 and the year ended December 31, 1999 included in the Offering
Circular agrees with the corresponding amounts in the audited
consolidated financial statements for such period.
A-5
