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EXHIBIT 1.01
DRAFT OF NOVEMBER 3, 1997
3,300,000 SHARES
RELIANCE STEEL & ALUMINUM CO.
COMMON STOCK
UNDERWRITING AGREEMENT
November 4, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reliance Steel & Aluminum Co., a California corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "UNDERWRITERS"), and certain shareholders of the Company named in
Schedule II hereto (the "SELLING SHAREHOLDERS") severally propose to sell to the
several Underwriters, an aggregate of 3,300,000 shares of the common stock, no
par value, of the Company (the "FIRM SHARES"), of which 3,100,000 shares are to
be issued and sold by the Company and 200,000 shares are to be sold by the
Selling Shareholders, each Selling Shareholder selling the amount set forth
opposite such selling Shareholder's name in Schedule II hereto. The Company also
proposes to issue and sell to the several Underwriters not more than 495,000
additional shares of its common stock, no par value (the "ADDITIONAL SHARES"),
if requested by the Underwriters as provided in Section 2 hereof. The Firm
Shares and the Additional Shares are hereinafter referred to collectively as the
"SHARES." The shares of common stock of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON
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STOCK." The Company and the Selling Shareholders are hereinafter sometimes
referred to collectively as the "SELLERS."
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"ACT,") a registration statement on Form S-3 including a prospectus relating to
the Shares. The registration statement as amended at the time it became
effective, including information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the Act, is
hereinafter referred to as the "REGISTRATION STATEMENT"; and the prospectus in
the form first used to confirm sales of Shares is hereinafter referred as the
"PROSPECTUS" (including, in the case of all references to the Registration
Statement or the Prospectus, documents incorporated therein by reference). If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock (a "RULE 462(b) REGISTRATION STATEMENT"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as used in this Agreement with
respect to the Registration Statement or the Prospectus shall include all
documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "EXCHANGE ACT") that are deemed to
be incorporated by reference in the Prospectus.
2. Agreements to Sell and Purchase and Lock-Up Agreements. On the basis
of the representations and warranties contained in this Agreement, and subject
to its terms and conditions, (i) the Company agrees to issue and sell 3,100,000
Firm Shares, (ii) each Selling Shareholder agrees, severally and not jointly, to
sell the number of Firm Shares set forth opposite such Selling Shareholder's
name in Schedule II hereto and (iii) each Underwriter agrees, severally and not
jointly, to purchase from each Seller at a price per Share of $______ (the
"PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Firm Shares to be sold by such Seller as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have a right to
purchase,
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severally and not jointly, up to an aggregate of 495,000 Additional Shares from
the Company at the Purchase Price. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. The Underwriters may exercise their right to purchase any
Additional Shares by giving written notice thereof to the Company at any time
within 30 days after the date of this Agreement. You shall give such notice on
behalf of the Underwriters and the notice shall specify the aggregate number of
Additional Shares to be purchased and the date for payment and delivery thereof.
The date specified in the notice shall be a business day (i) no earlier than the
Closing Date (as hereinafter defined), (ii) no later than ten business days
after such notice has been given and (iii) no earlier than two business days
after such notice has been given. If any Additional Shares are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase from the Company
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Additional Shares to be purchased from the Company as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
bears to the total number of Firm Shares.
Each Seller hereby agrees not to (i) offer, sell, contract to sell, sell
any option or contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
all or a portion of the economic consequences associated with the ownership of
any Common Stock (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of Common Stock, or such
other securities, in cash or otherwise), except to the Underwriters pursuant to
this Agreement, for a period of 180 days after the date of the Prospectus
without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation. Notwithstanding the foregoing, during such period (i) the Company
may grant stock options pursuant to the Company's existing stock option plan,
(ii) the Company may issue shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof and
(iii) each such stockholder may dispose of all or part of his/her shares by gift
provided the recipient of the shares agrees to be bound by the terms of such
agreement for the balance of such period. The Company also agrees not to file
any registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In addition,
each Selling Shareholder agrees that, for a period of 180 days after the date of
the Prospectus without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
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Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver an agreement executed by (i) each Selling Shareholder, (ii) each of the
directors and officers of the Company who is not a Selling Shareholder and (iii)
each Shareholder listed on Annex I hereto to the effect that such person will
not, during the period commencing on the date such person signs such agreement
and ending 180 days after the date of the Prospectus, without the prior written
consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the execution and delivery of this Agreement as in
your judgment is advisable and (ii) initially to offer the Shares upon the terms
set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on _______,
1997 (the "CLOSING DATE") at such place as you shall designate. The Closing Date
and the location of delivery of and the form of payment for the Firm Shares may
be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
exercise notice given by you pursuant to Section 2 (the "OPTION CLOSING DATE").
The Option Closing Date and the location of delivery of and the form of payment
for the Additional Shares may be varied by agreement between you and the
Company.
Certificates for the Shares shall be registered in such names and issued
in such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or the Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or the Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the
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respective Sellers, for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City.
5. Agreements of the Company. The Company agrees with you:
(a) To use its best efforts to cause the Registration Statement
to become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective,
(ii) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes,
(iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule
462(b) Registration Statement has become effective and (v) of the
happening of any event during the period referred to in paragraph (e)
below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at
the earliest possible time.
(c) To furnish to you, without charge, four (4) signed copies of
the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits and documents incorporated
therein by reference, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, without exhibits but
including documents incorporated therein by reference, as you may
reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective,
or to make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall reasonably
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object; and to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its
best efforts to cause the same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to
furnish to each Underwriter and dealer as many copies of the Prospectus
(and of any amendment or supplement to the Prospectus) and any documents
incorporated therein by reference and not previously furnished as such
Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented,
will not in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify,
such number of copies thereof as such Underwriter or dealers may
reasonably request.
(g) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares, unless exempt from the
requirements thereof, for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in
effect so long as required for distribution of the Shares and to file
such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification.
(h) To mail and make generally available to its shareholders as
soon as reasonably practicable an earnings statement covering the
twelve-month period ending December 31, 1998 which shall satisfy the
provisions
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of Section 11 (a) of the Act, and to advise you in writing when such
statement has been so made available.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end
of each fiscal year to the record holders of its Common Stock a
financial report of the Company and its subsidiaries on a consolidated
basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together
with comparable information as of the end of and for the preceding year,
certified by independent certified public accountants, and (ii) to mail
and make generally available as soon as practicable after the end of
each quarterly period (except for the last quarterly period of each
fiscal year) to such holders, a consolidated balance sheet, a
consolidated statement of operations and a consolidated statement of
cash flows (and similar financial reports of all unconsolidated
subsidiaries, if any) as of the end of and for such period, and for the
period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding
periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the holders of Common
Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to the
performance of its obligations under this Agreement, including: (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
each preliminary prospectus and all amendments and supplements to any of
them prior to or during the period specified in paragraph (e), (ii) the
printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in paragraph (e), (iii)
the printing and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection
with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing
and delivery), (iv)
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the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states (including in each
case the fees and disbursements of counsel for the Underwriters relating
to such registration or qualification and memoranda relating thereto),
(v) filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vi) the listing of the
Shares on the New York Stock Exchange ("NYSE") and (vii) furnishing such
numbers of copies of the Registration Statement, the Prospectus and all
amendments and supplements thereto as may be reasonably requested for
use in connection with the offering or sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold.
(l) To use its best efforts to list, subject to notice of
issuance, the Shares on the NYSE and to maintain the listing of the
Shares on the NYSE for a period of five years after the effective date
of the Registration Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or the Option Closing Date, as the
case may be, and to satisfy all conditions precedent to the delivery of
the Shares.
(n) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to
file a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b) by
10:00 P.M., New York City time, on the date of this Agreement and to pay
to the Commission the filing fee for such Rule 462(b) Registration
Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the Act.
6. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than
any Rule 462(b) Registration Statement to be filed by the Company after
the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date of
this Agreement; and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.
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(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act; (ii) the Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it became effective, did not
contain and, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; (iii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material
respects with the Act; (iv) if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any amendments thereto, when
they become effective (A) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Act and (v) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained in
this paragraph (b) shall not apply to statements or omissions in the
Registration Statement or the Prospectus (or any supplement or amendment
thereto) based upon information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act.
(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties,
and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing
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of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(e) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and nonassessable,
and, except for 3,000 shares of capital stock (representing less than 3%
of the issued and outstanding shares) of Valex Corp. ("VALEX") owned by
Xxxxxx Xxxxxx, an officer of Valex, are owned by the Company, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.
(f) All the outstanding shares of capital stock of the Company
(including the shares to be sold by the Selling Shareholders) have been
duly authorized and validly issued and are fully paid, nonassessable and
not subject to any preemptive or similar rights; and the Shares have
been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly
issued, fully paid and nonassessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(g) The authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof
contained in the Prospectus.
(h) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of the
business of the Company and its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a party or by which it or any
of its subsidiaries or their respective property is bound.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be required under the securities or Blue Sky laws of
the various states) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the charter or
by-laws of the Company
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or any of its subsidiaries or any agreement, indenture or other
instrument to which it or any of its subsidiaries is a party or by which
it or any of its subsidiaries or their respective property is bound, or
violate or conflict with any laws, administrative regulations or rulings
or court decrees applicable to the Company, any of its subsidiaries or
their respective property.
(j) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any of their
respective property is the subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No
contract or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement is not so described or filed as required.
(k) Except as otherwise set forth in the Prospectus, neither the
Company nor any of its subsidiaries has violated any foreign, federal,
state or local law or regulation relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), nor any
federal or state law relating to discrimination in the hiring, promotion
or pay of employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income Security Act
of 1974, as amended, or the rules and regulations promulgated
thereunder, which in each case might result in any material adverse
change in the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole.
(l) Each of the Company and its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("PERMITS"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, and
operate its respective properties and to conduct its business; each of
the Company and its subsidiaries have fulfilled and performed all of its
material obligations with respect to such Permits and no event has
occurred which allows or, after notice or lapse of time or both, would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit; and,
except as described in the Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company or any of its
subsidiaries.
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(m) In the ordinary course of its business, the Company from
time to time conducts a review of 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 on the Company and its subsidiaries, taken as a whole.
(n) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, each of the Company and its subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being
owned by it. All leases to which the Company or any of its subsidiaries
is a party are valid and binding and no default has occurred or is
continuing thereunder, which might result in any material adverse change
in the business, prospects, financial condition or results of operations
of the Company and its subsidiaries taken as a whole, and the Company
and its subsidiaries enjoy peaceful and undisturbed possession under all
such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the
Company or such subsidiary.
(o) Each of the Company and its subsidiaries maintains
reasonably adequate insurance.
(p) Ernst & Young LLP are independent public accountants with
respect to the Company as required by the Act.
(q) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles
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consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information
and data set forth in the Registration Statement and the Prospectus (and
any amendment or supplement thereto) is, in all material respects,
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(r) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "INVESTMENT COMPANY" or a
company "CONTROLLED" by an "INVESTMENT COMPANY" within the meaning of
the Investment Company Act of 1940, as amended.
(s) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company.
7. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to each Underwriter that:
(a) Such Selling Shareholder is the lawful owner of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement and
has, and on the Closing Date will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever.
(b) Such Selling Shareholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement signed by such Selling Shareholder and Xxx X. Xxxxxx and Xxxxx
X. Xxxxxx, as Custodians, relating to the deposit of the Shares to be
sold by such Selling Shareholder (the "CUSTODY AGREEMENT") and the Power
of Attorney of such Selling Shareholder appointing certain individuals
as such Selling Shareholder's attorneys-in-fact (the "ATTORNEYS") to the
extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement and the Custody Agreement (the
"POWER OF ATTORNEY") and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder in the manner provided
herein and therein.
(c) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
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(d) The Custody Agreement of such Selling Shareholder has been
duly authorized, executed and delivered by such Selling Shareholder and
is a valid and binding agreement of such Selling Shareholder,
enforceable in accordance with its terms.
(e) The Power of Attorney of such Selling Shareholder has been
duly authorized, executed and delivered by such Selling Shareholder and
is a valid and binding instrument of such Selling Shareholder,
enforceable in accordance with its terms, and, pursuant to such Power of
Attorney, such Selling Shareholder has, among other things, authorized
the Attorneys, or any one of them, to execute and deliver on such
Selling Shareholder's behalf this Agreement and any other document that
they, or any one of them, may deem necessary or desirable in connection
with the transactions contemplated hereby and thereby and to deliver the
Shares to be sold by such Selling Shareholder pursuant to this
Agreement.
(f) Upon delivery of and payment for the Shares to be sold by
such Selling Shareholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever.
(g) Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act,
the Selling Shareholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Shares.
(h) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney of such Selling
Shareholder by or on behalf of such Selling Shareholder, the compliance
by such Selling Shareholder with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and thereby
will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of
the various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the organizational
documents of such Selling Shareholder, if such Selling Shareholder is
not an individual, or any indenture, loan agreement, mortgage, lease or
other agreement or
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instrument to which such Selling Shareholder is a party or by which such
Selling Shareholder or any property of such Selling Shareholder is bound
or (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling Shareholder or any
property of such Selling Shareholder.
(i) The information in the Registration Statement under the
caption "Principal and Selling Shareholders" which specifically relates
to such Selling Shareholder does not, and will not on the Closing Date,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(j) At any time during the period described in Section 5(e), if
there is any change in the information referred to in Section 7(i), such
Selling Shareholder will immediately notify you of such change.
8. Indemnification. (a) The Sellers, jointly and severally, agree to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein.
Notwithstanding the foregoing, the aggregate liability of any Selling
Shareholder pursuant to this Section 8(a) shall be limited to an amount equal to
the total proceeds (before deducting expenses) received by such Selling
Shareholder from the Underwriters for the sale of the Shares sold by such
Selling Shareholder hereunder.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
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Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Shareholder and each person, if any, who controls such Selling Shareholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Sellers to such Underwriter
but only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, (ii)
the fees and expenses of more than one separate firm of attorneys (in addition
to any local counsel) for the Company, its directors, its officers who sign the
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Registration Statement and all persons, if any, who control the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
Selling Shareholders and all persons, if any, who control any Selling
Shareholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the Selling Shareholders and such control
persons of any Selling Shareholders, such firm shall be designated in writing by
the Attorneys. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 8(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred
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to in clause 8(d)(i) above but also the relative fault of the Sellers on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Sellers on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Sellers,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Shareholders on the one hand or the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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(f) Each Selling Shareholder hereby designates Reliance Steel & Aluminum
Co., 0000 X. 00xx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, as its authorized
agent, upon which process may be served in any action which may be instituted in
any state or federal court in the State of New York by any Underwriter, any
director or officer of any Underwriter or any person controlling any Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Selling Shareholder will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by applicable
law, any defense based upon lack of personal jurisdiction or venue. A copy of
any such process shall be sent or given to such Selling Shareholder, at the
address for notices specified in Section 12 hereof.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., New York City time, on the date of this Agreement or at such later
date and time as you may approve in writing; and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in
the ordinary course of business, of the Company, (ii) since the date of
the latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the
Registration Statement and Prospectus, (iii) the Company and its
subsidiaries shall have no liability or obligation, direct or
contingent, which is material to the Company and its subsidiaries, taken
as a whole, other than those reflected in the Registration Statement and
the Prospectus and (iv) on the
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Closing Date you shall have received a certificate dated the Closing
Date, signed by Xxx X. Xxxxxx and Xxxxx X. Xxxxxx, in their capacities
as Chief Executive Officer and President of the Company, respectively,
confirming the matters set forth in paragraphs (a), (b), and (c) of this
Section 9.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Xxxxx & Xxxxxx, counsel for the Company and the Selling
Shareholders to the effect that:
(i) each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as it is currently being conducted and to own, lease
and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's
subsidiaries have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except for 3,000
shares of capital stock (representing less than 3% of the issued
and outstanding shares) of Valex owned by Xxxxxx Xxxxxx, an
officer of Valex, are owned by the Company, free and clear of
any security interest, claim, lien, encumbrance or adverse
interest of any nature;
(iv) all the outstanding shares of Common Stock
(including the Shares to be sold by the Selling Shareholders)
have been duly authorized and validly issued and are fully paid,
nonassessable and not subject to any preemptive or similar
rights;
(v) the Shares have been duly authorized, and when
issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will have been validly
issued and
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will be fully paid and nonassessable, and the issuance of such
Shares is not subject to any preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed
and delivered by the Company and by or on behalf of each Selling
Shareholder and is a valid and binding agreement of the Company
and each Selling Shareholder enforceable in accordance with its
terms (except as rights to indemnity and contribution hereunder
may be limited by applicable law and except as the
enforceability of the Agreement may be subject to or limited by
bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws relating to or affecting the rights of
creditors generally);
(vii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Prospectus;
(viii) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has
been issued and no proceedings for that purpose are, to the
knowledge of such counsel, pending before or contemplated by the
Commission;
(ix) the statements under the captions "BUSINESS
GOVERNMENT REGULATION," and "CERTAIN U.S. TAX CONSEQUENCES TO
NON-U.S. SHAREHOLDERS" in the Prospectus, the statements under
the captions "ITEM 1 - BUSINESS - GOVERNMENT REGULATION" and
"ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
(regarding California indemnification law) in the Company's Form
10-K for the fiscal year ended December 31, 1996, the statements
under the caption "DESCRIPTION OF CAPITAL STOCK" in the
Company's registration statement on Form 8-A filed June 2, 1994
and Item 15 of Part II of the Registration Statement insofar as
such statements constitute a summary of legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings;
(x) neither the Company nor any of its subsidiaries is
in violation of its respective charter or by-laws and, to the
best of such counsel's knowledge after due inquiry, neither the
Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement or condition contained
in any bond,
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debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct
of the business of the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a
party or by which it or any of its subsidiaries or their
respective property is bound;
(xi) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all the
provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such
may be required under the Act or other securities or Blue Sky
laws) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, the charter
or by-laws of the Company or any of its subsidiaries, or any
agreement, indenture or other instrument to which the Company or
any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or their respective properties are
bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the
Company or any of its subsidiaries or their respective
properties;
(xii) after due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of their respective property is subject which is
required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or other
document which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an
exhibit to the Registration Statement which is not described or
filed as required;
(xiii) to the best of such counsel's knowledge, after
due inquiry, neither the Company nor any of its subsidiaries has
violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material
adverse change in
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the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole;
(xiv) to the best of such counsel's knowledge, after due
inquiry, except as otherwise set forth in the Prospectus or such
as are not material to the business, prospects, financial
condition or results of operation of the Company and its
subsidiaries, taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of
all liens, claims, encumbrances and restrictions except liens
for taxes not yet due and payable, to all property and assets
described in the Registration Statement as being owned by it;
(xv) to the best of such counsel's knowledge, after due
inquiry, all leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default has
occurred or is continuing thereunder, which might result in any
material adverse change in the business, prospects, financial
condition or results of operation of the Company and its
subsidiaries taken as a whole, and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all
such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by
the Company or such subsidiary;
(xvi) each of the Company and its subsidiaries has such
Permits as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner
described in the Prospectus; to the best of such counsel's
knowledge, after due inquiry, the Company and each of its
subsidiaries has fulfilled and performed all of its material
obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
Permit, subject in each case to such qualification as may be set
forth in the Prospectus; and, except as described in the
Prospectus, such Permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries;
(xvii) the Company is not and, after giving effect to
the offering and the sale of Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT
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COMPANY" within the meaning of the Investment Company Act of
1940, as amended;
(xviii) to the best of such counsel's knowledge, after
due inquiry, no holder of any security of the Company has any
right to require registration of shares of Common Stock or any
other security of the Company;
(xix) (A) each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus
(except for financial statements and other financial data
included therein as to which no opinion need be expressed)
complied when so filed as to form with the Exchange Act, (B) the
Registration Statement and the Prospectus and any supplement or
amendment thereto (except for financial statements as to which
no opinion need be expressed) comply as to form in all material
respects with the Act, and (C) such counsel believes that
(except for financial statements, as aforesaid) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and that the Prospectus, as
amended or supplemented, if applicable (except for financial
statements, as aforesaid) does not contain 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
(xx) each Selling Shareholder has full legal right,
power and authority, and all authorization and approval required
by law, to enter into this Agreement and the Custody Agreement
and the Power of Attorney of such Selling Shareholder and to
sell, assign transfer and deliver the Shares to be sold by such
Selling Shareholder in the manner provided herein and therein;
(xxi) the Custody Agreement of each Selling Shareholder
has been duly authorized, executed and delivered by such Selling
Shareholder and is a valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms;
(xxii) the Power of Attorney of each Selling Shareholder
has been duly authorized, executed and delivered by such Selling
Shareholder and is a valid and binding instrument of such
Selling
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Shareholder, enforceable in accordance with its terms, and,
pursuant to such Power of Attorney, such Selling Shareholder
has, among other things, authorized the Attorneys, or any one of
them, to execute and deliver on such Selling Shareholder's
behalf this Agreement and any other document they, or any one of
them, may deem necessary or desirable in connection with the
transactions contemplated hereby and thereby and to deliver the
Shares to be sold by such Selling Shareholder pursuant to this
Agreement;
(xxiii) each of the Selling Shareholer is the lawful
owner of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement; upon delivery of and payment for the
Shares to be sold by each Selling Shareholder pursuant to this
Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims
whatsoever; and
(xxiv) the execution, delivery and performance of this
Agreement and the Custody Agreement and Power of Attorney of
each Selling Shareholder by such Selling Shareholder, the
compliance by such Selling Shareholder with all the provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky
laws of the various states), (B) conflict with or constitute a
breach of any of the terms or provisions of, or a default under,
the organizational documents of such Selling Shareholder, if
such Selling Shareholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument
to which such Selling Shareholder is a party or by which any
property of such Selling Shareholder is bound or (C) violate or
conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body
or agency having jurisdiction over such Selling Shareholder or
any property of such Selling Shareholder.
In giving such opinions with respect to the matters covered by clause
(xix) of this section, such counsel for the Company and the Selling Shareholders
may state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and documents incorporated therein by reference and
review and discussion of the contents thereof, but is without independent check
or
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verification except as specified. In giving such opinion as to all clauses set
forth above, such counsel may rely as to matters of fact, to the extent they
deem proper, on certificates of officers of the Company and its subsidiaries and
public officials.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Boult, Cummings, Xxxxxxx & Xxxxx, Tennessee counsel for
the Company, to the effect that:
(i) Siskin Steel & Supply Company, Inc. ("SISKIN") and
AMI METALS, INC. ("AMI"), each a Tennessee corporation, have
been duly incorporated, are validly existing as corporations in
good standing under the laws of the State of Tennessee and have
the corporate power and authority required to carry on their
businesses as described in the Prospectus and to own, lease and
operate their properties;
(ii) Siskin is duly qualified and is in good standing as
a foreign corporation authorized to do business in Alabama,
Georgia, South Carolina and [ ] and AMI is duly qualified and
is in good standing as a foreign corporation authorized to do
business in California, Kansas, New Jersey, Texas, Washington
and [ ].
(iii) all the outstanding shares of capital stock of
Siskin and AMI (A) have been duly and validly authorized and
issued, (B) are fully paid and nonassessable, (C) are owned of
record, directly or indirectly, by the Company and (D) are, to
such counsel's knowledge, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any
nature.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of counsel for the Underwriters, as to the
matters referred to in clauses (v), (vi), (viii), (ix) (but only with
respect to the statements under the caption "DESCRIPTION OF CAPITAL
STOCK" and "UNDERWRITING") and (xix) of the foregoing paragraph (d). In
giving such opinions with respect to the matters covered by clause
(xix), counsel for the Underwriters may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto (other than the documents incorporated therein by reference) and
review and discussion of the contents thereof (including the documents
incorporated therein by reference), but are without independent check or
verification except as specified. In giving such opinion as to all
clauses set forth above, such
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counsel may rely as to matters of fact, to the extent they deem proper,
on certificates of officers of the Company and its subsidiaries and
public officials.
The opinions of Xxxxx & Hadden, Boult, Xxxxxxxx, Xxxxxxx & Xxxxx and
Xxxxx Xxxx & Xxxxxxxx described in paragraphs (d), (e) and (f) above shall be
rendered to you at the request of the Company and the Selling Shareholders and
shall so state therein.
(g) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Ernst & Young LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained in or incorporated by
reference into the Registration Statement and the Prospectus and
substantially in the form and substance of the letter delivered to you
by Ernst & Young LLP on the date of this Agreement.
(h) The Company shall have delivered to you the agreements
specified in Section 2 hereof.
(i) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company at or prior
to the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
10. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the execution of this Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or any of its subsidiaries or the earnings, affairs, or business
prospects of the Company or any of its subsidiaries, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus,
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(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus,
(iii) the suspension or material limitation of trading in common stock or
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market System or limitation on prices for securities on any such
exchange or National Market System, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any of its subsidiaries, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on the Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such
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Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Shareholders. In any such case which does not result in
termination of this Agreement, either you or the Sellers shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may be, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
11. Agreements of the Selling Shareholders. Each Selling Shareholder
agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Shareholder to the Underwriters.
(b) To pay or to cause to be paid such Selling Shareholder's pro
rata share (determined by dividing the number of Shares sold by such
Selling Shareholder by the total number of Shares sold by all Sellers)
of the filing fees incident to the filing of the Registration Statement
with the Commission and the fees payable in connection with the review
of the offering of the Shares by the National Association of Securities
Dealers, Inc.
(c) To do and perform all things to be done and performed by
such Selling Shareholder under this Agreement prior to the Closing Date
and to satisfy all conditions precedent to the delivery of the Shares to
be sold by such Selling Shareholder pursuant to this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company or to the Selling
Shareholders, to Reliance Steel & Aluminum Co., 0000 X. 00xx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: President and (b) if to any Underwriter or
to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall
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remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or by or on behalf
of the Sellers, the officers or directors of the Company or any controlling
person of the Sellers, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them in connection with this
Agreement and the offering of Shares.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "SUCCESSORS AND ASSIGNS" shall not include a purchaser of any of the Shares
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
RELIANCE STEEL & ALUMINUM CO.
By:
----------------------------------
Name:
Title:
THE SELLING SHAREHOLDERS
NAMED IN SCHEDULE II HERETO,
ACTING SEVERALLY
By:
----------------------------------
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------------
Name:
Title:
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SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
Prudential Securities Incorporated
---------
Total 3,300,000
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SCHEDULE II
SELLING SHAREHOLDERS
NUMBER OF FIRM SHARES
NAME BEING SOLD
---- ---------------------
Xxx X. Xxxxxx 50,000
Xxxxxx Xxxxxxxx 150,000
-------
Total 200,000
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ANNEX I
LIST OF SHAREHOLDERS
Xxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxx X. XxXxxxxx
Xxxxxxx X. Sales, Jr.
Xxxxxxx X. Xxxxx
Xxxxxx Xxxxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxx