EXHIBIT 1.2
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FLEXIBLE UNDERWRITTEN EQUITY FACILITY (FUEL(R)) AGREEMENT
BETWEEN
RAMIUS SECURITIES, LLC
AND
U.S. CONCRETE, INC.
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EXECUTION COPY FUEL(R) AGREEMENT
FUEL(R) PATENTS PENDING RAMIUS SECURITIES, LLC
TABLE OF CONTENTS
I. DEFINITIONS........................................................................................................ 1
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II. SALE OF COMMON STOCK............................................................................................... 5
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2.1 Underwriting Commitment.......................................................................... 5
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2.2 Limitation on Underwriting Amount................................................................ 6
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2.3 Mechanics of Notification........................................................................ 6
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2.4 Closings and Settlements......................................................................... 6
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2.5 Underwriter's Commission and Stand-by Fee........................................................ 7
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2.6 Termination, Suspension and Modification of Underwriting Obligation.............................. 8
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III. CONDITIONS PRECEDENT............................................................................................... 9
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3.1 Conditions Precedent to the Obligation of the Underwriter to Sell Common Stock
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Pursuant to a Capital Demand Notice.............................................................. 9
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3.2 Due Diligence Review............................................................................. 11
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3.3 Occurrence of Material Event..................................................................... 11
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IV. REPRESENTATIONS AND WARRANTIES OF UNDERWRITER...................................................................... 12
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4.1 Authorization; Enforcement....................................................................... 12
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4.2 Not an Affiliate................................................................................. 12
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4.3 Organization and Standing........................................................................ 12
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4.4 Absence of Conflicts............................................................................. 12
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4.5 Broker-Dealer.................................................................................... 13
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V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................................... 13
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5.1 Corporate Organization........................................................................... 13
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5.2 Capitalization and Indebtedness.................................................................. 13
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5.3 Authorization; Enforcement; Compliance with Other Instruments.................................... 13
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5.4 Absence of Conflicts............................................................................ 14
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5.5 Compliance with Applicable Law; Regulatory Permits............................................... 14
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5.6 Absence of Litigation............................................................................ 15
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5.7 SEC Documents: Financial Statements.............................................................. 15
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5.8 No Undisclosed or Contingent Liabilities......................................................... 16
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5.9 Employment and ERISA Matters..................................................................... 16
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5.10 Absence of Certain Changes....................................................................... 16
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5.11 Environmental Laws............................................................................... 17
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5.12 Absence of Defaults.............................................................................. 18
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5.13 Insurance........................................................................................ 18
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5.14 Leased Properties................................................................................ 18
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5.15 Intellectual Property............................................................................ 18
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5.16 Brokers.......................................................................................... 18
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5.17 Acknowledgment Regarding the Underwriter's Sale of the Common Stock.............................. 18
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5.18 Investment Company Status........................................................................ 18
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VI. COVENANTS ................................................................................................. 19
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6.1 Reservation of Common Stock...................................................................... 19
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6.2 Listing of Common Stock.......................................................................... 19
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6.3 Exchange Act Registration........................................................................ 19
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6.4 Legends.......................................................................................... 19
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FUEL(R) PATENTS PENDING i RAMIUS SECURITIES, LLC
6.5 Corporate Existence.............................................................................. 19
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6.6 Securities Laws.................................................................................. 19
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6.7 SEC Registration................................................................................. 19
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6.8 State Registration Requirements.................................................................. 20
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6.9 Registration Procedure........................................................................... 20
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6.10 Information by Underwriter....................................................................... 21
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6.11 Similar Standby Equity Facility Agreements....................................................... 21
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6.12 No Short Selling................................................................................. 21
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VII. ASSIGNMENT, ENTIRE AGREEMENT, AMENDMENT, AND TERMINATION........................................................... 21
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7.1 Assignment....................................................................................... 21
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7.2 Entire Agreement; Amendment...................................................................... 21
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7.3 Publicity........................................................................................ 21
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7.4 Termination...................................................................................... 21
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VIII. NOTICES, COSTS AND EXPENSES........................................................................................ 22
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8.1 Notices.......................................................................................... 22
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8.2 Costs and Expenses............................................................................... 23
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IX. INDEMNIFICATION AND CONTRIBUTION................................................................................... 24
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9.1 Indemnification.................................................................................. 24
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9.2 Contribution..................................................................................... 26
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X. GOVERNING LAW AND MISCELLANEOUS.................................................................................... 26
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10.1 Governing Law.................................................................................... 26
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10.2 Counterparts..................................................................................... 26
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10.3 Headings......................................................................................... 26
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10.4 Severability..................................................................................... 26
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10.5 Survival......................................................................................... 26
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10.6 No Third-Party Beneficiaries..................................................................... 26
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10.7 Further Assurances............................................................................... 27
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10.8 Construction..................................................................................... 27
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10.9 Consent to Jurisdiction.......................................................................... 27
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FUEL(R) PATENTS PENDING ii RAMIUS SECURITIES, LLC
FLEXIBLE UNDERWRITTEN EQUITY FACILITY (FUEL(R)) AGREEMENT
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FLEXIBLE UNDERWRITTEN EQUITY FACILITY (FUEL(R)) AGREEMENT dated as of
January 7, 2002 (the "Agreement"), between Ramius Securities, LLC, a limited
liability company organized and existing under the laws of the State of Delaware
("Underwriter"), and U.S. Concrete, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company");
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company may elect from time to time to issue and sell through the
Underwriter the number of shares of the Common Stock (as defined below) that
would result in Aggregate Gross Proceeds (as defined below) up to the Maximum
Aggregate Amount (as defined below), provided, however, that the number of
shares of Common Stock to be issued and sold hereunder shall not exceed
1,800,000;
NOW, THEREFORE, the parties hereto agree as follows:
I. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" shall mean, with respect to a specified Person, a Person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified Person.
"Aggregate Gross Proceeds" shall mean the aggregate of the proceeds
from any sale of shares of Common Stock by the Underwriter pursuant to this
Agreement, before the deduction of Commissions and Placement Fees payable with
respect to those shares.
"Agreement" shall have the meaning set forth in the preamble hereto.
"Best Efforts Amount" shall have the meaning set forth in Section 2.1
of this Agreement.
"Block Trades" shall mean block trades greater than 5,000 shares.
"Blocking Event" shall mean an event described in Section 2.6(a) of
this Agreement.
"By-Laws" shall have the meaning set forth in Section 5.2.
"Capital Demand Amount" shall mean the amount requested in any Capital
Demand Notice; provided, however, that each Capital Demand Amount shall be
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subject to the limitation in Section 2.3(a).
"Capital Demand Notice" shall have the meaning set forth in Section
2.3(a).
"Capital Raising Period" shall mean the period following the delivery
of a Capital Demand Notice and commencing at the opening of the first Trading
Day following the expiration of the Due Diligence Period relating to that
Capital Demand Notice and ending at the closing of the tenth Trading Day
thereafter.
"Certificate of Incorporation" shall have the meaning set forth in
Section 5.2.
FUEL(SM) PETENTS PENDING RAMIUS SECURITIES, LLC
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
any and all equivalent ownership interests in a Person (other than a
corporation).
"Change of Control" shall mean (i) the consolidation, merger or other
business combination of the Company with or into another Person, except for a
consolidation, merger or other business combination in which holders of the
Company's voting power immediately prior to the transaction continue after the
transaction to hold, directly or indirectly, the voting power of the surviving
entity or entities necessary to elect a majority of the members of the board of
directors (or their equivalent if other than a corporation) of such entity or
entities, (ii) the sale or transfer of all or substantially all of the Company's
assets, or (iii) a purchase, tender or exchange offer made to and accepted by
the holders of more than 50% of the aggregate voting power of the outstanding
Common Stock.
"Closing Date" shall mean, with respect to each sale of Common Stock
subject to the conditions contained herein, each Trading Day that the
Underwriter delivers an Underwriter Sales Notice to the Company.
"Commission" shall have the meaning set forth in Section 2.5(a).
"Commitment Period" shall mean the period commencing on the date the
SEC declares the Registration Statement effective and expiring on the earliest
to occur of: (a) termination of this Agreement pursuant to Section 7.4; (b) the
date that the Underwriter has sold the Maximum Aggregate Amount pursuant to
Capital Demand Notices; (c) the date the Underwriter has sold 1,800,000 shares
of Common Stock pursuant to Capital Demand Notices; (d) the second anniversary
of the date a post-effective amendment to the Registration Statement is filed
with the SEC disclosing this Agreement; or (e) a Change of Control.
"Common Stock" shall mean the common stock, par value $.001 per share,
of the Company.
"Company" shall have the meaning set forth in the preamble hereto.
"Condition Precedent Date" shall have the meaning set forth in Section
3.1.
"Deemed Receipt" shall have the meaning set forth in Section 3.3(b).
"Designated Officer" shall mean the Chief Executive Officer, the
President, or the Chief Financial Officer of the Company or such other person as
designated by any of them in writing.
"DTC" shall mean The Depository Trust Company.
"Due Diligence Materials" shall have the meaning set forth in Section
3.2.
"Due Diligence Period" shall mean: (a) with respect to the first
Capital Raising Notice delivered hereunder, the period commencing fourteen
calendar days prior to the commencement of sales pursuant to the first Capital
Demand Notice delivered by the Company; or (b) with respect to each subsequent
Capital Demand Notice, the period commencing on the Trading Day that the Company
delivers or makes available the Due Diligence Materials to the Underwriter and
its representatives and ending on the second Trading Day thereafter or, if there
have been more than 45 days since the end of the immediately preceding Capital
Raising Period, the fifth Trading Day after the beginning of such Due Diligence
Period.
FUEL(SM) PATENTS PENDING 2 RAMIUS SECURITIES, LLC
"Due Diligence Request List" shall mean: (a) with respect to the
initial due diligence review to be conducted by the Underwriter, its advisors
and representatives, the initial due diligence request list (which may be
supplemented by the Underwriter or its counsel during the initial Due Diligence
Period) delivered to the Company by the Underwriter; or (b) with respect to each
subsequent due diligence review to be conducted by the Underwriter, its advisors
and representatives following the Underwriter's receipt of a Capital Demand
Notice, the subsequent due diligence request list delivered to the Company by
the Underwriter on or before 5:00 p.m. Eastern Time on the Trading Day next
succeeding the day on which the Underwriter receives that Capital Demand Notice.
"DWAC" shall mean the DTC's Deposit and Withdrawal at Custodian
system.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Finder's Fees" shall mean the finder's fees payable by the Company to
Credit Lyonnais Securities (USA) Inc. pursuant to the Company's separate
agreement with Credit Lyonnais Securities (USA) Inc.
"Firm Commitment Amount" shall mean, with respect to any Capital
Raising Period, the lesser of: (a) the sum of the Qualified Daily Trading Limit
for each Trading Day during such Capital Raising Period; provided, however, that
the Firm Commitment Amount may be deemed to be zero, at the Underwriter's sole
option, if the VWAP shall be below the Minimum Offering Price for four
consecutive Trading Days during such Capital Raising Period; provided further,
that the Underwriter's obligation to sell shares of Common Stock pursuant to the
Capital Demand Notice relating to that Capital Raising Period shall be null and
void if the Firm Commitment Amount is less than $100,000; or (b)$1,000,000.
"First Year Stand-by Fee" shall have the meaning set forth in Section
2.5(b)(i).
"Float" shall mean the number of outstanding shares of Common Stock
held by Persons who are not Affiliates of the Company.
"GAAP" shall have the meaning set forth in Section 5.7(d)
"Governmental Entity" shall mean any federal, state, local or foreign
legislative body, court, government, department or instrumentality, or
governmental, administrative or regulatory authority or agency.
"Knowledge" shall mean, with respect to the Company, the actual
knowledge without independent inquiry of the executive officers of the Company.
"Material Adverse Effect" shall mean any effect on the business,
results of operations, properties or financial condition of the Company which is
material and adverse to the Company and its Subsidiaries, taken as a whole, or
any condition or situation which could prohibit, impair or otherwise interfere
with the ability of the Company to enter into and perform its obligations under
this Agreement.
"Maximum Aggregate Amount" shall mean $12,255,168 based on the last
sale price of the Common Stock on January 4, 2002.
"Minimum Offering Price" shall be set by the Company in its sole
discretion in each Capital Demand Notice and such Minimum Offering Price may be
different in each Capital Demand Notice; provided, however, that the Minimum
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Offering Price may not be less than the minimum bid price necessary for initial
listing or inclusion on the Principal Market.
"Notice of Blocking Period" shall have the meaning set forth in
Section 3.3.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or subdivision thereof.
FUEL(SM) PATENTS PENDING 3 RAMIUS SECURITIES, LLC
"Principal Market" shall mean, as of any time, the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market, whichever is at that time the principal trading exchange or
market for the Common Stock.
"Preferred Stock" shall have the meaning set forth in Section 5.2.
"Prospectus" shall mean the prospectus included in the Registration
Statement, as amended by a post-effective amendment or supplemented by any
Prospectus supplement, including all material incorporated by reference in such
Prospectus.
"Qualified Daily Trading Limit" shall mean, with respect to a Trading
Day in any Capital Raising Period, the lesser of: (a) 10% of the Capital
Demand Amount set forth in the related Capital Demand Notice; or (b) 15% of the
dollar trading volume of Common Stock (excluding Block Trades) traded at or
above the Minimum Offering Price on that Trading Day, as reported by Bloomberg
Financial LP using the AQR function; provided, that the Qualified Daily Trading
Limit shall be zero for any Trading Day that the VWAP is below the Minimum
Offering Price.
"Registrable Securities" shall mean any shares of Common Stock issued
or issuable pursuant to this Agreement.
"Registration Statement" shall mean the registration statement of the
Company on Form S-3 (Registration No. 333-42860), and any subsequent
registration statement relating to the offering of shares of Common Stock to be
sold pursuant to this Agreement, as amended or supplemented from time to time.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Filings" shall mean the Company's Form 10-K for the fiscal year
ended December 31, 2000, and its Forms 10-Q and Forms 8-K filed with the SEC
since December 31, 2000 through the date hereof, and all other filings made by
the Company after the date hereof pursuant to the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Settlement" shall mean the delivery, on the Settlement Date, of
shares of Common Stock into the Company's DTC account, pursuant to the
provisions of this Agreement.
"Settlement Date" shall mean, with respect to each purchase and sale
of Common Stock hereunder, subject to the conditions contained herein, the
Trading Day no later than three Trading Days (or such lesser time period as is
mandated under "regular way" settlement on the Principal Market) following each
Closing Date.
"Stand-by Fees" shall have the meaning set forth in Section
2.5(b)(ii).
"Subsidiaries" means, with respect to any Person, any corporation,
partnership, limited liability company, trust or unincorporated organization of
which securities or other ownership interests representing more than 50% or more
of the voting power thereof are, at the time as of which any determination is
being made, owned directly or indirectly, by such Person.
FUEL(SM) PATENTS PENDING 4 RAMIUS SECURITIES, LLC
"Trading Day" shall mean any day (from 9:30 a.m. to 4:00 p.m. Eastern
Time) during which the Principal Market shall be open for business and on which
trading of the Common Stock on the Principal Market shall not have been
suspended or limited; provided, however, that scheduled partial trading days
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(e.g., trading days other than those described above) shall be excluded and the
Capital Raising Period shall be extended for one additional day for every
partial day excluded.
"Transfer Agent" shall mean American Stock Transfer & Trust Company.
"Underwriter" shall have the meaning set forth in the preamble hereto.
"Underwriter's Clearing Broker" shall mean Bear Xxxxxxx Securities
Corp.
"Underwriter Sales Notice" shall have the meaning set forth in Section
2.3(b).
"Underwriting Price" shall mean, for any Trading Day, 95.75% to 96% of
the VWAP on that Trading Day pursuant to the matrix below, depending upon the
Company's market capitalization (as calculated on the date of the Capital Demand
Notice) on each Trading Day during the Capital Raising Period; provided that if
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the VWAP on any Trading Day during the Capital Raising Period is at or below the
Minimum Offering Price, the VWAP on such day shall be deemed to be the Minimum
Offering Price.
Company's Market Capitalization Underwriting Price
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Greater than or equal to $400 million 96.00%
Less than $400 million 95.75%
"VWAP" shall mean the daily volume weighted average price per share on
any Trading Day of the Common Stock on the Principal Market as reported by
Bloomberg Financial LP using the AQR function and eliminating any Block Trades;
provided that if a Blocking Event occurs on a Trading Day during a Capital
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Raising Period, then the VWAP for such Trading Day shall be adjusted such that
the volume weighted average price per share shall only take into consideration
trades that occurred between 9:30 a.m. and the time of such Blocking Event.
II. SALE OF COMMON STOCK.
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2.1 Underwriting Commitment. Subject to the terms and conditions set
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forth herein, during the Commitment Period the Company may elect to deliver one
or more Capital Demand Notices to the Underwriter. Upon the Company's delivery
of any such Capital Demand Notice, the Underwriter agrees, during the Capital
Raising Period relating to such Capital Demand Notice, to sell on behalf of the
Company, on a firm-commitment basis, the number of shares of Common Stock whose
Aggregate Gross Proceeds to the Company equal the Firm Commitment Amount (the
"Firm Commitment Shares") and, on a best efforts basis, the number of shares of
Common Stock whose Aggregate Gross Proceeds to the Company equal the difference
between the Capital Demand Amount specified in such Capital Demand Notice and
the Firm Commitment Amount (the "Best Efforts Amount"). If the Underwriter does
not, for any reason, sell any part of the Firm Commitment Shares during the
Capital Raising Period, the Underwriter shall be obligated to purchase the
unsold Firm Commitment Shares from the Company on the last day of the Capital
Raising Period at the greater of (a) the VWAP on the last day of Capital Raising
Period or (b) the Minimum Offering Price, unless (i) the Underwriter terminates
its firm commitment to sell those shares on or before the last day of the
Capital Raising Period in accordance with the provisions of Section 2.2, (ii)
the obligation of the Underwriter to sell shares of Common Stock during the
Capital Raising Period is cancelled pursuant to the provisions of Section
2.6(c)(i)(B) or (iii) the Underwriter terminates this Agreement on or before the
last day of the Capital Raising Period in accordance with the provisions of
Section 2.4(c) or 7.4. The parties acknowledge that in any particular
FUEL(SM) PATENTS PENDING 5 RAMIUS SECURITIES, LLC
Capital Raising Period, the Underwriter may not be able to sell such number of
shares that comprise the Best Efforts Amount.
2.2 Limitation on Underwriting Amount. If during any Capital Raising
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Period the Company shall issue any shares of Common Stock (other than shares of
Common Stock issued (i) under this Agreement, (ii) on the exercise of stock
options granted pursuant to the Company's approved stock option plans, (iii) on
the exercise of warrants outstanding as of the date hereof, or (iv) pursuant to
the Company's incentive or employee stock purchase plans), the Underwriter may
in its sole discretion elect to terminate its firm commitment to sell all or any
portion of the Firm Commitment Amount as well as any efforts to sell the Best
Efforts Amount and may cancel the then current Capital Raising Period at any
time during such period through and including the last Trading Day immediately
preceding the last Closing Date for such period. The Underwriter shall notify
the Company of such election by facsimile.
2.3 Mechanics of Notification.
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(a) Capital Demand Notice. On any Trading Day during the
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Commitment Period, a Designated Officer may deliver a written notice, in
substantially the form attached hereto as Exhibit 2.3(a), by facsimile, to the
Underwriter (a "Capital Demand Notice"). The Capital Demand Notice must specify
both the Capital Demand Amount and the Minimum Offering Price. A Capital Demand
Notice shall be irrevocable. The Company may issue as many Capital Demand
Notices as it may elect during the Commitment Period; provided, however, that
the Aggregate Gross Proceeds for shares of Common Stock sold by the Company
hereunder shall not exceed the Maximum Aggregate Amount and the aggregate number
of shares of Common Stock sold by the Company hereunder shall not exceed
1,800,000; provided, further, that the Company may not deliver a new Capital
Demand Notice during an existing Capital Raising Period. Each Capital Demand
Amount may not be less than $1,500,000 or more than $6,000,000.
(b) Underwriter Sales Notice. Prior to 8:00 p.m. Eastern Time
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on each Trading Day during the Capital Raising Period when the Underwriter has
sold shares of Common Stock, the Underwriter shall deliver a notice to the
Company and to the Transfer Agent in substantially the form of Exhibit 2.3(b)
attached hereto (an "Underwriter Sales Notice") setting forth the number of
shares of Common Stock that the Underwriter has sold and the Underwriting Price
on such Trading Day.
(c) Date/Method of Delivery of Notices. Except as otherwise
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provided herein, any notices delivered by the Company to the Underwriter or by
the Underwriter to the Company hereunder shall be in accordance with the terms
set forth in Section 8.1.
2.4 Closings and Settlements.
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(a) Brokerage Account. The Company must have a brokerage
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account with the Underwriter prior to the date on which the Company delivers the
first Capital Demand Notice, into which account the daily gross proceeds of
sales of Common Stock hereunder shall be deposited on each Closing Date in a
Capital Demand Period. The Company may request that money be wired to any
account it specifies at any time after the applicable Settlement Date; provided,
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however, that the Underwriter shall not be obligated to wire monies more often
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than once per any five consecutive Trading Days.
(b) Deliveries on Settlement Date. The Company shall credit the
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number of shares of Common Stock set forth in the Underwriter Sales Notice on
the Settlement Date to the Underwriter's or its designee's account with the DTC
through its DWAC system or shall effect delivery by such other means as may be
mutually agreed upon by the Company and the Underwriter. In addition, on or
prior to each Settlement Date, both the Company and the Underwriter shall
deliver all documents,
FUEL(SM) PATENTS PENDING 6 RAMIUS SECURITIES, LLC
instruments and writings required to be delivered by them, respectively,
pursuant to this Agreement in order to implement and effect the transactions
contemplated herein.
(c) Company's Failure to Deliver Shares. If the Company shall
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fail to deliver the shares of Common Stock to the Underwriter by the Settlement
Date, the Underwriter shall notify the Company advising the Company that such
shares have not been received. If, after such notice, the Company shall fail to
issue the shares of Common Stock by the fifth Trading Day after the Settlement
Date for such shares, the Company shall pay damages to the Underwriter equal to
any actual damages incurred by the Underwriter because of the Company's failure
to deliver such required shares, including damages resulting from the
Underwriter's need, as determined by the Underwriter in its sole discretion, to
"unwind" any and all sales of Common Stock made during the Capital Raising
Period, to reimburse any and all purchasers for their completed purchases of
Common Stock, to borrow securities to cover short positions, and interest and
other charges related to net capital compliance. Moreover, if the shares have
not been delivered by such date, the Underwriter will not be obligated to pay
the Company (unless the Company has already paid the Underwriter's actual
damages, if any, incurred during such Capital Raising Period) for any shares
sold by the Underwriter or that the Underwriter agreed to sell or was obligated
to sell during the Capital Raising Period, nor will the Underwriter be obligated
to engage in any further efforts to sell Common Stock during the remainder of
the Capital Raising Period. In addition, if the shares have not been delivered
by the Company by the fifth Business Day after the Settlement Date, at the
Underwriter's sole option, it may terminate this Agreement.
2.5 Underwriter's Commission and Stand-by Fee.
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(a) Underwriter's Commission. During each Capital Raising
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Period, the Company will pay the Underwriter, at the end of each Trading Day
during that Capital Raising Period, a commission (the "Commission") equal to the
amount, if any, by which (i) the daily gross proceeds from sales of shares
hereunder on such Trading Day (the "Daily Gross Proceeds") exceeds (ii) the
aggregate number of shares sold during such Trading Day multiplied by the
Underwriting Price (the "Daily Net Amount"); provided, however, that in no event
will the total of the Commissions and the Finder's Fees payable during any
Capital Raising Period exceed 7% of the Aggregate Gross Proceeds attributable to
sales of shares of Common Stock hereunder during that Capital Raising Period.
Such Commission will be deducted from the Company's account at the end of each
Trading Day during a Capital Raising Period. If, on any Trading Day during any
Capital Raising Period, the Daily Net Amount shall exceed the Daily Gross
Proceeds (any such excess being a "Deficit Amount"), such Deficit Amount shall
not be paid by the Underwriter to the Company at the end of such Trading Day,
but rather shall be accumulated and credited against the next Commission(s)
payable by the Company to the Underwriter during that Capital Raising Period.
Immediately following the Capital Raising Period, the Underwriter shall pay to
the Company any accumulated Deficit Amounts relating to that Capital Raising
Period that have not been so credited against Commissions.
(b) Underwriter's Stand-by Fee.
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(i) If the Company has not raised an aggregate of at least
$1,000,000 pursuant to Capital Demand Notices within one year of the date of
this Agreement, the Company will pay the Underwriter an amount equal to 5% of
the difference between $1,000,000 and the amount raised during such one-year
period as a stand-by fee for its costs in connection with this Agreement ("First
Year Stand-by Fee").
(ii) If the Company has not raised an aggregate of at least
$2 million pursuant to Capital Demand Notices within two years of the date of
this Agreement, the Company will pay the Underwriter an additional amount equal
to (A) 5% of the difference between the $2 million and the aggregate amount
raised over such two-year period, less (B) the
FUEL(SM) PATENTS PENDING 7 RAMIUS SECURITIES, LLC
amount, if any, of the First Year Stand-by Fee (together with the First Year
Stand-by Fee, the "Stand-by Fees"); provided, however, that the aggregate Stand-
by Fees paid under the provisions of (i) and (ii) of this Section 2.5(b) shall
not exceed $100,000.
(iii) If the Company raises at least $2 million pursuant to
Capital Demand Notices within two years of the date of this Agreement, the
Underwriter will refund to the Company any previously paid Stand-by Fees.
(iv) Notwithstanding anything to the contrary in this
Section 2.5(b), the Company shall not be required to make any then-remaining
payments of Stand-by Fees following the occurrence of a Change of Control.
(v) Any payment by the Company of any Stand-by Fee
hereunder may be paid in cash or, at the Company's sole election to the extent
permitted under NASD Rule 2710, in a number of shares of Common Stock as are
equal to (A) the amount of Stand-by Fees that the Company elects to pay in
shares of Common Stock divided by (B) the last reported per share sales price of
the Common Stock on the Principal Market on the second to last Trading Day
preceding the date of such payment.
2.6 Termination, Suspension and Modification of Underwriting Obligation.
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(a) Blocking Events. The Underwriter shall not be obligated to
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sell any shares of Common Stock from the Company pursuant to any Capital Demand
Notice, nor Commitment Period, when there shall exist any one or more of the
following:
(i) the withdrawal or suspension of the effectiveness of a
registration statement for the registration of not less than the number of
shares of Common Stock equal to, for any Capital Demand Notice, the Capital
Demand Amount divided by the Minimum Offering Price;
(ii) the failure of the Common Stock issuable hereunder to
be validly listed or included on the Principal Market;
(iii) the Company's failure to satisfy any of the
requirements of Section 3.1 or 3.2 or an event described in Section 3.3(a) of
this Agreement;
(iv) any failure in the compliance by the Company with any
of the covenants provided in Article VI;
(v) any merger or consolidation of the Company into
another entity (where the Company is not the surviving entity), or a transfer of
all or substantially all of the assets of the Company to another entity;
(vi) receipt or Deemed Receipt (as provided in Section 3.3)
by the Underwriter of a Notice of Blocking Period (each of (i), (ii), (iii),
(iv), (v) or (vi) a "Blocking Event").
(b) Notification. The Company shall be obligated to notify the
------------
Underwriter in writing using the form attached hereto as Exhibit 3.3 immediately
upon the occurrence of a Blocking Event.
FUEL(SM) PATENTS PENDING 8 RAMIUS SECURITIES, LLC
(c) Reduction or Elimination of Underwriter's Obligation to Sell
------------------------------------------------------------
During Any Capital Raising Period or Extension of Capital Raising Period.
------------------------------------------------------------------------
(i) In the event that a Blocking Event occurs during a
Capital Raising Period, at the option of the Underwriter, (A) the Capital
Raising Period, and therefore the Underwriter's obligations, shall be extended
by the number of Trading Days that such Blocking Event exists or (B) unless such
Blocking Event is waived in writing by the Underwriter, the obligation of the
Underwriter to sell any shares of Common Stock during such Capital Raising
Period shall be canceled for such Capital Raising Period and the Underwriter
shall be entitled to rescind any sales made during such Capital Raising Period,
and the Company shall be liable for all actual damages incurred by the
Underwriter resulting from the occurrence of the Blocking Event.
(ii) If the Underwriter has sold shares of Common Stock
during the Capital Raising Period and the Settlement of such sales has not
occurred prior to the occurrence of a Blocking Event, the Company shall use its
reasonable efforts to take all actions necessary to cure such Blocking Event, if
curable, within 24 hours; provided, however, that the Company shall not be
-------- -------
required to disclose any material information relating to a proposed transaction
or event that constitutes a Blocking Event prior to such time as the Company
would generally, based on advice from its counsel, disclose such transaction or
event.
III. CONDITIONS PRECEDENT.
--------------------
3.1 Conditions Precedent to the Obligation of the Underwriter to Sell
-----------------------------------------------------------------
Common Stock Pursuant to a Capital Demand Notice. Company's Underwriter,
------------------------------------------------
pursuant to a Capital Demand Notice is subject to the satisfaction, on each
applicable Closing Date (each a "Condition Precedent Date") of each of the
following conditions, which conditions cannot be waived without the prior
written consent of the Underwrite r:
(a) Effective Registration Statement. The Registration
--------------------------------
Statement shall be in effect and shall remain effective on each Condition
Precedent Date and (i) neither the Company nor the Underwriter shall have
received notice that the SEC has issued or intends to issue a stop order with
respect to the Registration Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened to do so; and (ii) no other order,
ruling or decree of any Governmental Entity suspending the use of the
Registration Statement or related Prospectus in any applicable jurisdiction
shall be in effect.
(b) Amended Prospectus. An amendment shall have been filed
------------------
to the Registration Statement disclosing this Agreement and disclosing the name
of the Underwriter in compliance with SEC Rule 415(a)(4)(iv).
(c) Rule 424(b) Prospectus. If the Company and the
----------------------
Underwriter shall mutually agree that a prospectus supplement related to any
Capital Demand Notice is required to be filed, the prospectus supplement shall
have been filed with the SEC pursuant to Rule 424(b) within the applicable time
period prescribed for such filing under the Securities Act.
(d) No Suspension of Trading or Delisting of Common
-----------------------------------------------
Stock/Market Disruption/Hostilities. The trading of the Common Stock shall not
-----------------------------------
have been suspended by the SEC or the Principal Market and shall not have been
delisted from the Principal Market. The issuance of shares of Common Stock with
respect to the applicable Closing Date shall not violate any stockholder
approval requirements of the Principal Market. Trading in securities generally
on the Principal Market shall not have been suspended or materially limited. No
general moratorium on or material disruption of
FUEL(SM) PATENTS PENDING 9 RAMIUS SECURITIES, LLC
commercial banking activities or securities clearance and settlement services
shall have been declared by either Federal or New York State authorities. There
shall not be a material outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war that, in the reasonable judgment of the Underwriter, makes it impracticable
to proceed with the offering or the delivery of the Common Stock on the
Settlement Date.
(e) NASD Filings. The National Association of Securities
------------
Dealers, Inc. ("NASD") shall have issued an oral or written statement to the
effect that it has no objections to the proposed underwriting terms and
arrangements pursuant to its rules prior to the first Capital Demand Notice.
(f) Accuracy of the Company's Representations and
---------------------------------------------
Warranties. The representations and warranties of the Company, as set forth in
----------
this Agreement, shall be true and correct in all material respects as of each
Condition Precedent Date as though made at each such time (except for
representations and warranties made as of a specific date).
(g) Performance by the Company. The Company shall have
--------------------------
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to each Condition Precedent Date.
(h) No Injunction. No statute, rule, regulation, executive
-------------
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or Governmental Entity of competent
jurisdiction which prohibits or materially adversely affects any of the
transactions contemplated by this Agreement, and no proceeding shall have been
commenced which may have the effect of prohibiting or materially adversely
affecting any of the transactions contemplated by this Agreement.
(i) Adverse Changes. Except as disclosed pursuant to
---------------
public filings under the Exchange Act, since the date through which the most
recent quarterly report of the Company on Form 10-Q (or annual report on Form
10-K if more recent) has been prepared and filed with the SEC, no event which
had or would reasonably be expected to have a Material Adverse Effect shall have
occurred.
(j) Legal Opinions. The Company shall have caused to be
--------------
delivered to the Underwriter, on the Trading Day immediately prior to the first
Trading Day of each Capital Raising Period, legal opinions substantially similar
to those set forth in Exhibit 3.1(j) hereto, which opinions must be reasonably
satisfactory to the Underwriter.
(k) Accountant's Letter. On the Trading Day immediately
-------------------
prior to the first Trading Day of the first Capital Raising Period and on the
Trading Day immediately prior to the first Trading Day of the first Capital
Raising Period following the filing of any SEC filing (other than any Form 8-K
filing that is not material or that does not include any financial statements)
to be incorporated by reference into the Registration Statement or any amendment
thereto, the Company shall have caused its independent public accountants to
furnish to the Underwriter a comfort letter in customary form and substance
reasonably satisfactory to the Underwriter, including confirmation that they are
independent public accounts with respect to the Company and the Company's
Subsidiaries within the meaning of the Securities Act and Exchange Act and a
statement to the effect they have performed the procedures in accordance with
the provisions of Statement on Auditing Standards No. 71, as amended, and
reports thereon as shall have been reasonably requested by the Underwriter with
respect to certain financial information contained in the Registration
Statement; and on the Trading Day immediately prior to the first Trading Day of
each other Capital Raising Period, if a comfort letter is not otherwise being
delivered on that day pursuant to the foregoing provisions, the Company's
independent public accountants shall
FUEL(SM) PATENTS PENDING 10 RAMIUS SECURITIES, LLC
have furnished to the Underwriter a bring-down comfort letter in customary form
and substance reasonably satisfactory to the Underwriter.
(l) Officer's Certificate. The Company shall have delivered
---------------------
to the Underwriter, on the Trading Day immediately prior to the first Trading
Day of each Capital Raising Period, a certificate in substantially the form
attached hereto as Exhibit 3.1(l) executed by an executive officer of the
Company and to the effect that all conditions to such Closing shall have been
satisfied as of the date of such certificate.
(m) Clearing Broker Instructions. The Company shall have
----------------------------
issued instructions to the Underwriter's Clearing Broker (in substantially the
form attached hereto as Exhibit 3.1(m)) to release the Commission at the
Underwriter's request. The Company shall also cooperate with the Underwriter to
provide the Underwriter's Clearing Broker with any additional documentation
requested thereby in connection with payment of Commissions to the Underwriter.
(n) Transfer Agent Instructions. The Company shall have
---------------------------
issued instructions to its Transfer Agent (in substantially the form attached
hereto as Exhibit 3.1(n)) to issue such shares in accordance with the provisions
of Section 2.4(b).
(o) Brokerage Account. The Company must have a brokerage
-----------------
account open with the Underwriter.
(p) Limitation on "At the Market" Sales. The dollar value
-----------------------------------
of the Common Stock subject to the Capital Demand Notice, when aggregated with
the dollar value of any relevant prior sales of Common Stock that are included
in the Registration Statement, shall not exceed the 10% limitation on "at the
market" sales in SEC Rule 415(a)(4)(ii), which shall be calculated based on the
Company's Float as set forth in Section 5.2.
3.2 Due Diligence Review.
--------------------
The Company shall also deliver or make available, during
normal business hours, for inspection and review by the Underwriter and its
representatives, all such information reasonably requested in the applicable Due
Diligence Request List (the "Due Diligence Materials") (including, without
limitation, responses to all questions and other inquiries reasonably made or
submitted therein), for the sole purpose of enabling the Underwriter and such
representatives to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of the disclosure contained in the Registration
Statement.
3.3 Occurrence of Material Event.
----------------------------
(a) If the Company's management determines in its good
faith judgment (i) that it is required or advisable to do so or (ii) that any
fact exists or any event has occurred that makes any statement of a material
fact made in the Registration Statement, the prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein untrue in
any material respect, or that 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 in any material respect, the Company shall notify the
Underwriter using substantially the form attached hereto as Exhibit 3.3 (a
"Notice of Blocking Period") that the Underwriter may not sell the Registrable
Securities pursuant to any Registration Statement or prospectus.
(b) If the Underwriter reasonably believes, after advice
from its attorneys and notice to and consultation with the Company and its
attorneys, that a fact exists or an event has
FUEL(SM) PATENTS PENDING 11 RAMIUS SECURITIES, LLC
occurred that makes any statement of a material fact made in the Registration
Statement, the prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue in any material respect, or that
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 in any
material respect, then the Company shall have been deemed to have delivered a
Notice of Blocking Period to the Underwriter ("Deemed Receipt").
(c) The Underwriter agrees that, upon receipt of a Notice
of Blocking Period from the Company of the existence of any fact of the kind
described in this Section 3.3, the Underwriter shall not dispose of, sell or
offer for sale the Registrable Securities pursuant to the Registration Statement
until such Underwriter receives (i) copies of the supplemented or amended
prospectus, unless the Company shall have determined that such disclosure is not
required due to subsequent events, (ii) notice in writing from the Company that
the use of the prospectus may be resumed and (iii) copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company in connection with any such notice, each Underwriter
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Underwriter's possession, of the prospectus
covering such Registrable Securities that was current immediately prior to the
time of receipt of such notice.
IV. REPRESENTATIONS AND WARRANTIES OF UNDERWRITER.
---------------------------------------------
The Underwriter represents and warrants to the Company as follows:
4.1 Authorization; Enforcement. The Underwriter has full power and
--------------------------
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Underwriter.
No other proceedings on the part of Underwriter are necessary to approve and
authorize the execution and delivery of this Agreement, and the consummation of
the transactions contemplated hereby in accordance with the terms hereof. This
Agreement has been validly executed and delivered by the Underwriter and is a
valid and binding agreement of the Underwriter enforceable against it in
accordance with the terms hereof, except as that enforceability may be subject
to the effect of (i) any applicable bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether that
enforceability is considered in a proceeding in equity or at law), and (iii) any
implied covenant of good faith or fair dealing; and except as rights to
indemnity and contribution hereunder may be limited by federal or state law.
4.2 Not an Affiliate. The Underwriter is not an officer, director or
----------------
Affiliate of the Company.
4.3 Organization and Standing. The Underwriter is a limited liability
-------------------------
company duly organized, validly existing, and in good standing under the laws of
the State of Delaware, and has all requisite power and authority to carry on its
business as now being conducted, and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business conducted
by it makes such qualifications necessary, except where the failure to be so
qualified or in good standing would not have a material adverse effect.
4.4 Absence of Conflicts. The execution and delivery of this Agreement and
--------------------
any other document or instrument executed in connection herewith, and the
consummation of the transactions contemplated hereby and thereby, and compliance
with the requirements hereof and thereof, will not violate the provision of any
indenture, instrument or agreement to which the Underwriter is a party or is
subject, or by which the Underwriter or any of its assets is bound, or conflict
with or constitute a material default thereunder, or result in the creation or
imposition of any lien pursuant to the terms of any such
FUEL(SM) PATENTS PENDING 12 RAMIUS SECURITIES, LLC
indenture, instrument or agreement, or constitute a breach of any fiduciary duty
owed by the Underwriter to any third party.
4.5 Broker-Dealer. The Underwriter is a registered broker-dealer under the
-------------
Exchange Act and is a member in good standing of the NASD.
V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
---------------------------------------------
Except as disclosed in the Prospectus, the Company represents and
warrants to the Underwriter as follows:
5.1 Corporate Organization. Each of the Company and its Subsidiaries is a
----------------------
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized, and has
the requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation or other
entity to do business and is in good standing in every jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect. Each of the Company's Subsidiaries
are listed in Annex A to Exhibit 3.1(j).
5.2 Capitalization and Indebtedness. As of the date hereof, the authorized
-------------------------------
capital stock of the Company consists of 60,000,000 shares of Common Stock, of
which as of the date hereof, 26,549,830 shares are issued and outstanding, and
10,000,000 shares of preferred stock (the "Preferred Stock") of the Company, of
which as of the date hereof, none are issued or outstanding. All of the
outstanding shares have been validly issued and are fully paid and
nonassessable. Further, the Company's Float as of the date hereof is not less
than 17,608,000 shares of Common Stock. No shares of Common Stock outstanding or
Common Stock to be issued and sold by the Company hereunder are subject to (i)
any preemptive rights or any other similar rights under the Certificate of
Incorporation or Bylaws or any agreement to which the Company is a party or is
bound or (ii) any liens suffered or permitted by the Company. There are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of any of the Common Stock pursuant to this
Agreement. The Company has made available to the Underwriter true and correct
copies of the Company's Restated Certificate of Incorporation, as amended and as
in effect on the date hereof (the "Certificate of Incorporation"), and the
Company's Amended and Restated Bylaws, as amended and as in effect on the date
hereof (the "Bylaws"), and the terms of all securities convertible into or
exercisable for Common Stock and the material rights of the holders thereof in
respect thereto.
5.3 Authorization; Enforcement; Compliance with Other Instruments.
-------------------------------------------------------------
(a) The Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and to issue and
sell and perform its obligations with respect to the Common Stock in accordance
with the terms hereof.
(b) The execution and delivery of this Agreement by the Company
and the consummation by it of the transactions contemplated hereby, including,
without limitation, the reservation for issuance and the issuance of the Common
Stock pursuant to the terms of this Agreement, have been duly authorized by the
Company's Board of Directors (or a duly appointed committee thereof) and, to the
Knowledge of the Company, no further consent or authorization is required by the
Company's Board of Directors, any committee thereof or the stockholders of the
Company.
FUEL(SM) PATENTS PENDING 13 RAMIUS SECURITIES, LLC
(c) Upon the issuance of the Common Stock issuable in accordance
with the terms of this Agreement and payment of the Underwriting Price therefor,
such Common Stock will be duly and validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the Prospectus.
(d) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding agreement of the Company enforceable
against it in accordance with the terms hereof, except as that enforceability
may be subject to the effect of (i) any applicable bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law), and
(iii) any implied covenant of good faith or fair dealing; and except as rights
to indemnity and contribution hereunder may be limited by federal or state law.
5.4 Absence of Conflicts.
--------------------
(a) The execution, delivery and performance of this Agreement by
the Company, and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Certificate of
Incorporation or Bylaws or the organizational charter and/or bylaws of any of
its Subsidiaries, or (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under (or, as of the date hereof, give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on or against any of the properties of the
Company or any of its Subsidiaries under), any note, bond, mortgage, agreement,
license indenture or instrument to which the Company or any of its Subsidiaries
is a party, or result in a violation of any statute, law, rule, regulation,
writ, injunction, order, judgment or decree (including U.S. federal and state
securities laws and regulations and the rules and regulations of the Principal
Market on which the Common Stock is traded or listed) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries is bound or affected, except where such violation,
conflict, breach or default would not have a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is in
violation of any term of its Certificate of Incorporation or Bylaws or its
organizational charter or bylaws, respectively.
(c) Except as specifically contemplated by this Agreement and as
required under the Securities Act, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
Governmental Entity in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement in accordance with the terms
hereof.
(d) The Company is not in violation of the listing requirements
of the Principal Market and, to its Knowledge, is not aware of any facts that
would cause it to be delisted by the Principal Market.
5.5 Compliance with Applicable Law; Regulatory Permits. The businesses of
--------------------------------------------------
the Company are not being conducted in violation of any law, ordinance, rule,
regulation, judgment, decree or order of any Governmental Entity, except for
violations which, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the Company and its Subsidiaries possesses all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals and orders issued by Governmental Entities that are
necessary to own, lease and operate its properties and to conduct its business
as currently being conducted (collectively, the "Company Permits"), except where
the failure to possess any of such Company Permits would not have a Material
Adverse Effect. There is no action
FUEL(SM) PATENTS PENDING 14 RAMIUS SECURITIES, LLC
pending or, to the Knowledge of the Company, threatened by or before any
Governmental Entity regarding the suspension or cancellation of any of the
Company Permits. Neither the Company nor any of its Subsidiaries is in conflict
with, or in default or violation of, any of the Company Permits.
5.6 Absence of Litigation. There is no (i) action, suit, proceeding,
---------------------
inquiry or investigation before or by any Governmental Entity or arbitrator
pending, or, to the Knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries or (ii) judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against the
Company or any of its Subsidiaries that, in the case of either clause (i) or
(ii), has had, or would reasonably be expected in the future to have, a Material
Adverse Effect or which reasonably could be expected to materially adversely
affect the transactions contemplated by this Agreement.
5.7 SEC Documents: Financial Statements.
-----------------------------------
(a) The Common Stock is registered pursuant to Section 12(b) or
(g) of the Exchange Act and the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act (all of the foregoing, and all
other documents and registration statements, whether heretofore or hereafter
filed by the Company with the SEC, and the Registration Statement, when declared
effective, and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC Documents"). The Common Stock is currently
listed or quoted on the Principal Market which is, as of the date hereof, the
Nasdaq National Market. The Company (i) has delivered or made available to the
Underwriter or its advisor or representative (including via the SEC's XXXXX
system) true and complete copies of the SEC Documents as have been filed as of
the date hereof and as the Underwriter or its advisor or representative has
requested from the Company and (ii) agrees to make available or, if requested,
deliver to the Underwriter or its advisor or representative true and complete
copies of any SEC Documents filed after the date hereof, upon request.
(b) As of their respective dates, the SEC Documents that are
incorporated by reference into the Registration Statement and the Prospectus
(collectively, the "Incorporated Documents") complied as to form in all material
respects with the requirements of the Securities Act and the Exchange Act
applicable to the Incorporated Documents, and none of the Incorporated
Documents, at the time they were filed with the SEC (except for those
Incorporated Documents that were subsequently amended prior to the date hereof)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) The Registration Statement and the Prospectus contained in
the Registration Statement, including any post-effective amendment and
prospectus supplement, in such form as it may be as of the date of delivery of
such Prospectus, amendment or prospectus supplement by the Underwriter in
connection with sales of Common Stock by the Underwriter, will comply as to form
in all material respects with the requirements of the Securities Act and 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
(in the case of the Prospectus, in the light of the circumstances under which
they were made) not misleading; provided, that this representation and warranty
--------
does not apply to statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with information relating
to the Underwriter furnished to the Company in writing by or on behalf of the
Underwriter expressly for use therein. At the time the Registration Statement
was filed with the SEC, the Company was eligible to register securities,
including a primary offering of the Common Stock sold pursuant to this Agreement
on a Registration Statement on Form S-3 under the Securities Act.
FUEL(SM) PATENTS PENDING 15 RAMIUS SECURITIES, LLC
(d) As of their respective dates, the financial statements of
the Company included (or incorporated by reference) in the Incorporated
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the
extent they may exclude footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company
and its Subsidiaries as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as disclosed in the
Prospectus, since the date of the latest audited financial statements included
in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of operations of
the Company and its Subsidiaries taken as a whole, and except as disclosed in or
contemplated by the Prospectus, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(e) During the three years preceding the date hereof, the SEC
has not issued an order preventing or suspending the use of any prospectus
relating to the offering of any shares of Common Stock or instituted proceedings
for that purpose.
5.8 No Undisclosed or Contingent Liabilities. Neither the Company nor any
----------------------------------------
of its Subsidiaries has any claims, liabilities or obligations of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due) that would be required to be reflected or reserved against on
a consolidated balance sheet of the Company and its consolidated Subsidiaries
under GAAP, except for claims, liabilities or obligations (i) disclosed in the
Company's most recent Form 10-K or any Incorporated Document filed subsequent to
such Form 10-K or (ii) incurred by the Company or any of its Subsidiaries since
the date of filing the most recent Incorporated Document, which are in the
ordinary course of business or that, individually or in the aggregate, would not
have a Material Adverse Effect.
5.9 Employment and ERISA Matters.
----------------------------
(a) ERISA Compliance. The Company and its Subsidiaries are in
----------------
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours except where failure to be in compliance would
not have, individually or in the aggregate, a Material Adverse Effect.
(b) Absence of Labor Dispute. No organized labor dispute with
------------------------
the employees of the Company or any Subsidiary exists or, to the Knowledge of
the Company, is imminent, except for such disputes as would not, individually
or in the aggregate, have a Material Adverse Effect.
5.10 Absence of Certain Changes.
--------------------------
(a) Since the later of September 30, 2001 or the end of the most
recent fiscal quarter before the delivery of the most recent Capital Demand
Notice, if any, the business of the Company and its Subsidiaries has been
conducted in the ordinary course, and except in the ordinary course of business,
there has not been:
(i) any event, occurrence, development or state of
circumstances or facts which, individually or in the aggregate, has had or would
have a Material Adverse Effect;
FUEL(SM) PATENTS PENDING 16 RAMIUS SECURITIES, LLC
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of Capital Stock of
the Company or any repurchase, redemption or other acquisition by the Company of
any outstanding shares of Capital Stock or other securities of, or other
ownership interests in, the Company;
(iii) any amendment of any material term of any
outstanding security of the Company that impacts the rights of holders of the
Common Stock in any material respect;
(iv) any incurrence, assumption or guarantee by the
Company or any Subsidiary of any material amount of indebtedness for borrowed
money, other than revolving lines of credit or borrowings under the financing
arrangements of the Company or any of its Subsidiaries described or referred to
in the Prospectus;
(v) any creation or assumption by the Company or any
Subsidiary of any lien on any material asset other than pursuant to the
financing arrangements of the Company or any of its Subsidiaries described or
referred to in the Prospectus;
(vi) any making of any loan, advance or capital
contribution to or investment in any Person in excess of $5,000,000, other than
loans, advances or capital contributions to or investments in wholly owned
Subsidiaries;
(vii) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has had or
will have a Material Adverse Effect;
(viii) any transaction or commitment made, or any contract
or agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of assets) or any
relinquishment by the Company or any Subsidiary of any contract or other right,
in any such case, material to the Company and the Subsidiaries, taken as a
whole, other than transactions and commitments in the ordinary course of
business and those contemplated by this Agreement; or
(ix) any material change in any method of accounting or
accounting practice by the Company.
(b) None of the Company or its Subsidiaries have taken any
steps, and do not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company have any Knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings against it or any of its Subsidiaries.
5.11 Environmental Laws. Except as would not, singly or in the aggregate,
------------------
result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) are in violation of any statute, rule, regulation, decision or
order of any Governmental Entity relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), (ii) owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, (iii)
are liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or (iv) are subject to or know of any pending investigation
that might lead to any claim against the Company or any of its Subsidiaries
relating to any violation of Environmental Laws.
FUEL(SM) PATENTS PENDING 17 RAMIUS SECURITIES, LLC
5.12 Absence of Defaults. Except as disclosed in the SEC Filings, neither
-------------------
the Company nor any of its Subsidiaries are in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its Subsidiaries may be
subject, except for any such defaults that would not result in a Material
Adverse Effect.
5.13 Insurance. All current primary, excess and umbrella policies of
---------
insurance owned or held by or on behalf of or providing insurance coverage to
the Company or any of its Subsidiaries are in full force and effect. The Company
and each of its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company deems to be prudent for a corporation of the Company's size and
line of business.
5.14 Leased Properties. All of the leases and subleases of real property
-----------------
material to the business of the Company and its Subsidiaries are in full force
and effect and neither the Company nor any Subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to or
questioning the rights of the Company or any of its Subsidiaries to the
continued possession of the premises under any such lease or sublease.
5.15 Intellectual Property. The Company and its Subsidiaries own or
---------------------
possess or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how, trademarks, service marks, trade
names or other intellectual property rights (collectively, "Intellectual
Property") that are material to the conduct of the business now operated by the
Company and its Subsidiaries taken as a whole, and neither the Company nor any
of its Subsidiaries has received any notice of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property that
has not been resolved and that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a Material Adverse
Effect.
5.16 Brokers. The Company has taken no action which would give rise to any
-------
claim by any Person (other than Credit Lyonnais Securities (USA) Inc.) for
brokerage commissions, finder's fees or similar payments by the Underwriter
relating to this Agreement or the transactions contemplated hereby.
5.17 Acknowledgment Regarding the Underwriter's Sale of the Common Stock.
-------------------------------------------------------------------
The Company acknowledges and agrees that the Underwriter is acting solely as the
Company's Underwriter with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the Underwriter is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by the Underwriter or any of its respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to the Underwriter's sale of the Common
Stock hereunder. The Company further represents to the Underwriter that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives.
5.18 Investment Company Status. The Company is not, and upon consummation
-------------------------
of the sale of the Common Stock will not be, an "investment company," a company
controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
FUEL(SM) PATENTS PENDING 18 RAMIUS SECURITIES, LLC
VI. COVENANTS.
---------
6.1 Reservation of Common Stock. The Company shall reserve, prior to the
---------------------------
commencement of any Capital Raising Period, such number of shares of Common
Stock, free of preemptive rights, equal to (i) the quotient of the Capital
Demand Amount divided by the Minimum Offering Price. The number of shares so
reserved from time to time, as theretofore increased or reduced as hereinafter
provided, may be reduced by the number of shares actually delivered hereunder
and the number of shares so reserved shall be increased to reflect stock splits
and stock dividends and distributions.
6.2 Listing of Common Stock. During the term of this Agreement, the
-----------------------
Company hereby agrees to use its reasonable efforts to maintain the listing or
inclusion of the Common Stock on a Principal Market and, as soon as reasonably
practicable, to list or include any additional shares of Common Stock issued
under this Agreement. The Company further agrees to use reasonable efforts to
comply in all material respects with the Company's reporting, filing and other
obligations under the rules of the Principal Market. The Company further agrees
that, if the Company applies to have the Common Stock traded on any other
Principal Market, it will include in such application the Common Stock issued
under this Agreement, and will take such other action as is necessary or
desirable to cause the Common Stock issued hereunder to be listed or included on
such other Principal Market as promptly as possible.
6.3 Exchange Act Registration. During the term of this Agreement, the
-------------------------
Company will cause its Common Stock to continue to be registered under Section
12(b) or (g) of the Exchange Act, will comply in all respects with its reporting
and filing obligations under the Exchange Act, and will not take any action or
file any document (whether or not permitted by the Exchange Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under the Exchange Act.
6.4 Legends. The certificates evidencing the Common Stock to be issued on
-------
each Closing shall be free of legends relating to transfer restrictions or stop
transfer or other restrictions.
6.5 Corporate Existence. During the term of this Agreement, the Company
-------------------
will take all reasonable steps necessary to preserve and continue the corporate
existence of the Company; provided, however, that the provisions of this Section
6.5 shall not be construed to limit the ability of the Company to partake in any
merger, asset sale or acquisition transaction involving the Company, subject to
the Company complying with the other terms of this Agreement.
6.6 Securities Laws. The Company will comply with all applicable federal
---------------
and state securities laws in connection with the offer, issuance and sale of the
shares of Common Stock hereunder at the time of each Capital Demand Notice.
Prior to the completion of the sale of the shares of Common Stock by the
Underwriter, the Company will not distribute any offering material in connection
with the offer and sale of the Common Stock purchased pursuant to this Agreement
other than the Registration Statement, the Prospectus or other materials, if
any, permitted by the Securities Act.
6.7 SEC Registration. The Company shall use reasonable efforts to effect
----------------
and maintain the registration of the Registrable Securities with the SEC on Form
S-3, including, without limitation, the filing of any post-effective amendments
to the Registration Statement and the filing of any report required by the
Exchange Act that relates to the transactions contemplated by this Agreement,
and will not voluntarily take any action that would suspend or terminate its
ability to register or maintain registration on Form S-3 until the termination
of this Agreement, except to the extent a Blocking Event occurs pursuant to
Section 3.3. If a Blocking Event occurs pursuant to Section 3.3, the Company
shall use reasonable efforts to remove such Blocking Event as soon as possible,
including the filing with the SEC of a Prospectus supplement or post-effective
amendment to the Registration Statement, as applicable; provided, however, that
-------- -------
the Company shall not be required to disclose any material information relating
FUEL(SM) PATENTS PENDING 19 RAMIUS SECURITIES, LLC
to a proposed transaction or event that constitutes a Blocking Event prior to
such time as the Company would generally disclose such transaction or event.
6.8 State Registration Requirements. The Company shall use reasonable
-------------------------------
efforts to effect the registration of the Registrable Securities (including,
without limitation, the execution of an undertaking to file post-effective
amendments) under applicable United States state securities laws as would permit
or facilitate the sale or distribution of all the Registrable Securities in the
manner (including manner of sale) and in all states reasonably requested by the
Underwriter for purposes of maximizing the proceeds realizable by the
Underwriter from such sale or distribution; provided, however, that the Company
-------- -------
shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6.8, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction.
6.9 Registration Procedure. At its expense, the Company will use its
----------------------
reasonable best efforts to:
(a) Permit the Underwriter to review and comment upon any
registration statement registering shares of Common Stock pursuant to this
Agreement and all amendments and supplements thereto, any prospectus supplement
or post-effective amendment to the Registration Statement that relates to the
transactions contemplated by this Agreement and any report to be filed pursuant
to the Exchange Act that relates to the transactions contemplated by this
Agreement at least two days prior to their filing with the SEC, and not file any
such document in a form to which the Underwriter reasonably objects and the
Company will also advise the Underwriter promptly of the filing of any such
amendment or supplement and of the institution by the SEC of any stop order
proceedings in respect of a Registration Statement and will use reasonable
efforts to prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued;
(b) If reasonably requested by the Underwriter, incorporate as
soon as practicable in a Prospectus supplement, a post-effective amendment to
the Registration Statement or an Exchange Act filing such information as the
Underwriter requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being issued,
the Underwriting Price being paid therefor and any other terms of the
underwritten offering of the Registrable Securities to be sold in such offering;
and make all required filings of such Prospectus supplement, post-effective
amendment, or Exchange Act filing as soon as practicable after notification of
the matters to be incorporated in such document;
(c) Furnish such number of Prospectuses and amendments and
supplements thereto, and other documents incident thereto, as soon as available
and in such quantities as the Underwriter from time to time may reasonably
request;
(d) Notify the Underwriter and its counsel (as designated in
writing by the Underwriter) promptly, and confirm such notice in writing (i)
when a Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to the Registration Statement or any post-
effective amendment thereto, when the same has become effective, and (ii) of any
request by the SEC for amendments or supplements to the Registration Statement
or the Prospectus or for additional information; and
(e) If, at any time when a prospectus relating to the Common
Stock offered pursuant to the terms of this Agreement is required to be
delivered under the Securities Act in connection with sales by the Underwriter,
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made,
FUEL(SM) PATENTS PENDING 20 RAMIUS SECURITIES, LLC
not misleading, or if it is necessary at any time to amend the Prospectus to
comply with the Securities Act, promptly notify the Underwriter of such event
and promptly prepare and file with the SEC, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance. Neither the Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 3.1.
6.10 Information by Underwriter. The Underwriter shall promptly furnish
--------------------------
to the Company such information regarding the Underwriter and the distribution
proposed by such Underwriter as the Company may reasonably request and as shall
be reasonably required in connection with any registration, qualification or
compliance referred to in Sections 6.7, 6.8, and 6.9. All information provided
to the Company by the Underwriter shall be accurate and complete in all material
respects and the Underwriter shall promptly notify the Company if any such
information becomes incorrect or incomplete.
6.11 Similar Standby Equity Facility Agreements. During the term of this
------------------------------------------
Agreement, the Company shall refrain from entering into any other similar
standby equity facility agreements, arrangements or understandings granting to
the Company the right to issue shares of its Common Stock to one or more
underwriters through a series of transactions similar to the transactions
contemplated by this Agreement.
6.12 No Short Selling. During the term of this Agreement, the Underwriter
----------------
and its Affiliates shall not engage in any put, call, short-sale, hedge,
straddle, collar or similar transaction with respect to any shares of Common
Stock.
VII. ASSIGNMENT, ENTIRE AGREEMENT, AMENDMENT, AND TERMINATION.
--------------------------------------------------------
7.1 Assignment. Neither this Agreement nor any rights of the Underwriter
----------
or the Company hereunder may be assigned by either party to any other Person
without the prior written consent of the other party.
7.2 Entire Agreement; Amendment. This Agreement constitutes the full and
---------------------------
entire understanding and agreement between the parties with regard to the
subjects hereof, and supercedes all other prior oral or written agreements
between the parties, their Affiliates, or persons acting on their behalf. No
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought.
7.3 Publicity. Except as may be required by law or applicable
---------
regulation, each of the Company and the Underwriter shall consult with the other
before issuing any press release or otherwise making any public statements with
respect to this Agreement and, except as required by law, any applicable
regulation of any Governmental Entity or the requirements of the Principal
Market, shall not issue any such press release or make any such public statement
without the prior written consent of the other party (which consent shall not be
unreasonably withheld).
7.4 Termination.
-----------
(a) The Underwriter may (in its sole and absolute discretion)
terminate this Agreement and its firm commitment to sell all or any portion of
the Firm Commitment Amount as well as any efforts to sell the Best Efforts
Amount, as a result of (i) a material breach by the Company of any
representation, warranty, covenant or other obligation in connection with this
Agreement, (ii) failure by
FUEL(SM) PATENTS PENDING 21 RAMIUS SECURITIES, LLC
the Company to comply with any of the requirements of Article VI, (iii) the
Company, at any date after the date hereof, effecting any merger or
consolidation of the Company with or into, or transferring all or substantially
all of the assets of the Company to, another entity, or (iv) the Underwriter
reasonably determining, at any time that the adoption of, or change in, or any
change in the interpretation or application of, any law, regulation, rule,
guideline or treaty (including, but not limited to, laws, regulations, rules or
guidelines with respect to changes of capital adequacy) makes it illegal or
materially impracticable for the Underwriter to fulfill its commitment pursuant
to this Agreement, but in the case of (i) or (iv) above, the Underwriter may
terminate this Agreement only after a 30-day period beginning when the
Underwriter gives the Company notice of its intentions to terminate this
Agreement (but the Underwriter's right to terminate its obligation to purchase
any shares of Common Stock pursuant to a Capital Demand Notice shall not be
subject to any delay or contingency) in which, in the case of (i), the Company
has not cured such breach as provided above, or, in the case of (iv), the
parties negotiate in good faith a reasonable alternative manner not illegal or
impracticable for the Underwriter to fulfill its commitment pursuant to this
Agreement. If the Underwriter elects to terminate this Agreement pursuant to
clause (ii) above, it must first give the Company notice of such election and
then may terminate this Agreement only after a 10-day period in which the
Company has not cured its failure to comply with such covenants.
(b) The Underwriter may also, in its sole and absolute
discretion, terminate this Agreement if the Company shall fail to maintain the
listing or inclusion of the Common Stock on at least one Principal Market, or if
trading of the Common Stock on a Principal Market shall have been suspended for
a period of ten (10) consecutive Trading Days.
(c) The Company may, in its sole discretion, terminate this
Agreement at any time.
(d) Any termination pursuant to this Section 7.4 shall not
affect the survival of the provisions of this Agreement referred to in Section
10.4.
(e) This Agreement will terminate on such date that the
Underwriter has sold the Maximum Aggregate Amount or 1,800,000 shares of Common
Stock pursuant to Capital Demand Notices.
VIII. NOTICES, COSTS AND EXPENSES.
---------------------------
8.1 Notices. All notices, demands, requests, consents, approvals or
-------
other communications required or permitted to be given hereunder or which are
given with respect to this Agreement shall be in writing and shall be (i)
personally served, (ii) deposited in the U.S. mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable
overnight courier service with charges prepaid, or (iv) transmitted by
facsimile, addressed as set forth below, or to such other address as such party
shall have specified most recently by written notice:
If to the Company, to:
Xxxxxxx X. Xxxxxx
U.S. Concrete, Inc.
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
FUEL(SM) PATENTS PENDING 22 RAMIUS SECURITIES, LLC
With a copy (which shall not constitute notice) to:
Xxx X. Xxxxx
Xxxxx Xxxxx L.L.P.
3000 One Shell Plaza
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Underwriter, to:
Xxxxxxx X. Xxxxxxx
Vice President
Ramius Securities, LLC
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Telephone No. (000) 000-0000
Facsimile No.: (000) 000-0000
Any notice (including, without limitation, a Capital Demand Notice,
but excluding any Underwriter Sales Notice, which Underwriter Sales Notice shall
be deemed to be delivered on the Trading Day it is delivered, if delivered via
facsimile prior to 8:00 p.m. Eastern Time) sent by one party to another with
confirmation of acceptance or otherwise received in writing via a reputable
overnight courier service, shall be deemed to be delivered on the immediately
succeeding Trading Day. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by facsimile during normal
business hours of the recipient; provided, that in the case of transmission by
facsimile, such facsimile shall have been confirmed received. Notice otherwise
sent as provided herein shall be deemed given on the third business day
following the date mailed.
8.2 Costs and Expenses. Upon the first Capital Demand Notice in any
------------------
quarter, the Company shall advance all estimated reasonable out-of-pocket costs
and expenses relating to due diligence, up to $8,000. Any amount remaining after
the actual costs and expenses for due diligence have been paid for the quarter
will be reimbursed to the Company. Notwithstanding anything contained in this
Section 8.2 to the contrary, the Company shall not be responsible for any costs
and expenses pursuant to this Section 8.2 in any calendar quarter in which there
were no Capital Demand Notices delivered. The Company agrees to pay the
Underwriter the amounts due under this Section 8.2 (including expenses for due
diligence) that have not yet been paid within 30 days following the
Underwriter's request therefor. In the event payment is not received within such
30-day period, the Underwriter shall have the right to deduct any such amounts
owed by the Company to the Underwriter from any amounts owed by the Underwriter
to the Company pursuant hereto. The Underwriter acknowledges that the Company
has advanced the Underwriter $50,000 for out-of-pocket expenses (including
reasonable attorney's fees and costs incurred
FUEL(SM) PATENTS PENDING 23 RAMIUS SECURITIES, LLC
in connection with the Underwriter's initial due diligence investigation) and
that any fees not incurred will be returned to the Company within 60 days
following the date of this Agreement.
IX. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
9.1 Indemnification.
---------------
(a) Subject to the following provisions of this Section 9.1, to
the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend the Underwriter, the directors, officers,
employees and agents of the Underwriter and each Person, if any, who controls
the Underwriter within the meaning of the Securities Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "Claims"), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC or
NASD, whether pending or threatened, whether or not such Indemnified Person is
or may be a party thereto ("Indemnified Damages"), to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in the
Registration Statement or any post-effective amendment thereto or in any filing
by the Company made in connection with the qualification of the offering under
the securities laws of any jurisdiction in which Registrable Securities are
offered, or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which the statements therein were made, not misleading;
or (ii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading (the matters in the foregoing
clauses (i) and (ii) being, collectively, "Violations"). Subject to the
provisions of Section 9.1(c), the Company shall reimburse the Underwriter and
each such controlling person, promptly as such expenses are incurred and are due
and payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 9.1(a): (i) shall not apply to a Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto and
(ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Underwriter.
(b) Subject to the following provisions of this Section 9.1, in
connection with any Registration Statement or any amendment or supplement
thereto in which the Underwriter is participating, the Underwriter agrees to
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in Section 9.1(a), the Company, each of its directors, officers
and employees and each Person, if any, who controls the Company within the
meaning of the Securities Act (each, an "Indemnified Party"), against any Claim
or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Underwriter expressly for use in connection with any
Registration Statement covering Registrable Securities and, subject to the
provisions of Section 9.1(c), the
FUEL(SM) PATENTS PENDING 24 RAMIUS SECURITIES, LLC
Underwriter will reimburse such Indemnified Parties promptly as such expenses
are incurred and are due and payable for any legal or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 9.1(b)
and the agreement with respect to contribution contained in Section 9.2 shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Underwriter, which consent
shall not be unreasonably withheld; provided, further, however, that the
Underwriter shall be liable under this Section 9.1(b) for only that amount of a
Claim or Indemnified Damages as does not exceed the aggregate Commissions and
Stand-by Fees paid hereunder. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Underwriter.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 9.1 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
9.1, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right (at its expense) to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel reasonably satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that such indemnifying party shall diligently pursue such
defense and that an Indemnified Person or Indemnified Party shall have the right
to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
Indemnified Person or Indemnified Party, as the case may be, the representation
by such counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential differing
interests between such Indemnified Person or Indemnified Party and any other
party represented by such counsel in such proceeding. The indemnifying party
shall pay reasonable fees for only one separate legal counsel for all
Indemnified Persons or Indemnified Parties (as applicable). The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall respond to the
reasonable inquiries of the Indemnified Party as to the status of the defense or
any settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its written consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 9.1, except to the extent that the indemnifying party
is prejudiced in its ability to defend such action.
(d) The indemnification required by this Section 9.1 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
FUEL(SM) PATENTS PENDING 25 RAMIUS SECURITIES, LLC
(e) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
9.2 Contribution. To the extent any indemnification by an indemnifying
------------
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 9.1 to the fullest extent permitted by law; provided,
however, that: (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 9.1; (ii) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
X. GOVERNING LAW AND MISCELLANEOUS.
-------------------------------
10.1 Governing Law. This Agreement shall be governed by and interpreted
-------------
in accordance with the laws of the State of New York, without giving effect to
any principles of conflict of laws thereof that would result in the application
of the laws of any other jurisdiction.
10.2 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party.
10.3 Headings. The headings of this Agreement are for convenience of
--------
reference and shall not affect the interpretation of this Agreement.
10.4 Severability. If any provision of this Agreement shall be invalid or
------------
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
10.5 Survival. The representations, warranties and agreements of the
--------
parties hereto shall survive each Closing hereunder and the termination of this
Agreement or the Commitment Period for one year following the termination of
this Agreement or the Commitment period. The indemnity and contribution
agreements contained in Sections 9.1 and 9.2 shall survive and remain operative
and in full force and effect regardless of (i) any termination of this Agreement
or of the Commitment Period, (ii) any investigation made by or on behalf of any
indemnified party or by or on behalf of the Company and (iii) the consummation
of the sale or successive resales of the Common Stock. Further, termination of
this Agreement or the Commitment Period shall not affect the survival of (i)
obligations relating to costs and expenses pursuant to Section 8.2, (ii) all
obligations pursuant to Article II, to the extent such termination shall occur
at any time from the beginning of a Capital Raising Period to the last
Settlement Date of such Capital Raising Period, except in the case of any
termination pursuant to Section 2.2, or (iii) the provisions of Articles VII and
X.
10.6 No Third-Party Beneficiaries. This Agreement is intended for the
----------------------------
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person, except as provided in Article IX.
FUEL(SM) PATENTS PENDING 26 RAMIUS SECURITIES, LLC
10.7 Further Assurances. Each party shall do and perform, or cause to be
------------------
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
10.8 Construction. Unless the context of this Agreement otherwise clearly
------------
requires, references to the plural include the singular, the singular the plural
and the part the whole and "or" has the inclusive meaning represented by the
phrase "and/or". Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) the words "herein," "hereof," and "hereunder," and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision of this Agreement, and (iii) all references herein to
Articles, Sections and Exhibits shall be construed to refer to Articles and
Sections of, and Exhibits to, this Agreement.
10.9 Consent to Jurisdiction. The parties hereto expressly submit
-----------------------
themselves to the exclusive jurisdiction of the state and federal courts of New
York, New York in any action or proceeding relating to this Agreement or any of
the other documents contemplated hereby or any of the transactions contemplated
hereby or thereby. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any such action, suit or proceeding brought in such a court and any
claim that any such action, suit or proceeding brought in such a court has been
brought in an inconvenient forum. The parties hereto hereby irrevocably waive
any and all right to a trial by jury with respect to any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. The parties hereto irrevocably and unconditionally consent to the
service of process of any of the aforementioned courts in any such action, suit
or proceeding by the mailing of copies thereof by registered or certified mail,
return receipt requested, postage prepaid, at their respective addresses set
forth or provided for herein, such service to become effective ten (10) days
after such mailing. Nothing herein shall affect the right of any party to serve
process in any manner permitted by law or to commence legal proceedings or
otherwise proceed against the other parties in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
RAMIUS SECURITIES, LLC
By: /S/ XXXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Partner
U.S. CONCRETE, INC..
By: /S/ XXXXXX XXXXX
----------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
FUEL(SM) PATENTS PENDING 27 RAMIUS SECURITIES, LLC
EXHIBIT 2.3(a)
--------------
CAPITAL DEMAND NOTICE
---------------------
Reference is made to the Flexible Underwritten Equity FaciLity
("FUEL(R)")Agreement dated as of January 7, 2002 (the "Underwriting Agreement")
between U.S. Concrete, Inc. (the "Company") and Ramius Securities, LLC (the
"Underwriter"). Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Underwriting Agreement.
In accordance with and pursuant to Section 2.3(a) of the Underwriting
Agreement, the Company hereby issues this Capital Demand Notice for the Capital
Demand Amount indicated below.
--------------------------------------------------------------------
Capital Demand Amount:/1/ $
--------------------------------------------------------------------
Minimum Offering Price: $
--------------------------------------------------------------------
Market Capitalization $
--------------------------------------------------------------------
The Capital Raising Period shall begin on __________________ and end
on _________________.
Dated: ___________________ U.S. CONCRETE, INC.
By: ________________________________________
Name:___________________________________
Title:__________________________________
Facsimile No.:__________________________
Agreed and Acknowledged:
RAMIUS SECURITIES, LLC
By: _______________________________
Name:______________________________
Title:_____________________________
Facsimile No.: 000-000-0000
_______________________
/1/ The Capital Demand Amount may not be less than $1,500,000 or more than
$6,000,000.
EXHIBIT 2.3(b)
--------------
UNDERWRITER SALES NOTICE
------------------------
Reference is made to the Flexible Underwritten Equity FaciLity
("FUEL(R)") Agreement dated as of January 7, 2002 (the "Underwriting Agreement")
between U.S. Concrete, Inc. (the "Company") and Ramius Securities, LLC (the
"Underwriter").
In accordance with and pursuant to Section 2.3(b) of the Underwriting
Agreement, the Underwriter hereby delivers this Underwriter Sales Notice to the
Company for the share amount and price indicated below.
-------------------------------------------------------------------
Number of Shares:
-------------------------------------------------------------------
Underwriting Price:
-------------------------------------------------------------------
Volume:
-------------------------------------------------------------------
Gross Proceeds:
-------------------------------------------------------------------
Commission:
-------------------------------------------------------------------
Net Proceeds:
------------------------------------------------------ ------------
Dated: ______________________ RAMIUS SECURITIES, LLC
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT 3.1(j)
--------------
FORM OF IN-HOUSE COUNSEL'S OPINION
----------------------------------
[Letterhead of Xxxxxx Xxxxx, General Counsel of U.S. Concrete, Inc.]
_____ __, 200__
Ladies and Gentlemen:
This opinion is being furnished pursuant to Section 3.1(j) of the
Flexible Underwritten Equity FaciLity ("FUEL(R)") Agreement dated as of January
7, 2002 (the "Underwriting Agreement") between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and Ramius Securities, LLC (the "Underwriter"), in
connection with the issuance and sale of _______ shares (the "Shares") of the
Company's common stock, par value $0.001 per share ("Common Stock"), under the
Underwriting Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-42860)
relating to the registration under the Securities Act of 1933, as amended, and
the offering thereof from time to time in accordance with the rules and
regulations of the Commission thereunder (collectively, the "1933 Act"), of
securities of the Company, including the Shares. That registration statement,
as amended by a post-effective amendment that the Company filed with the
Commission on __________ ___, 2002, at the time that post-effective amendment
became effective, including all documents filed as part thereof or incorporated
by reference therein, is hereinafter referred to as the "Registration
Statement," and the Company's prospectus dated __________ ___, 2002, together
with the Company's prospectus supplement dated _____ __, 200_, each as filed
with the Commission pursuant to Rule 424(b) under the 1933 Act, including all
documents incorporated by reference therein, are hereinafter collectively
referred to as the "Prospectus."
I am the Vice President, General Counsel and Corporate Secretary of
the Company. In that capacity, I have examined the originals, or copies
certified or otherwise identified, of the restated certificate of incorporation
and bylaws, each as amended to date, of the Company, the Registration Statement,
the Prospectus, the Underwriting Agreement, corporate records of the Company,
including minute books of the Company, certificates of public officials and of
representatives of the Company, oral representations of the Company's employees,
statutes and other instruments and documents, as a basis for the opinions
hereinafter expressed. In giving these opinions, I have relied on statements of
representatives of the Company with respect to the accuracy of all factual
matters, and I have assumed that all signatures on documents examined by me are
genuine, all documents submitted to me as originals are authentic, all documents
submitted to me as certified or photostatic copies conform to the original
copies of those documents and those original copies are authentic.
On the basis of the foregoing and subject to the limitations and
assumptions set forth herein, I am of the following opinions:
1. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware and has full
corporate power and authority to own its properties and to conduct its business
as described in the Prospectus.
2. The authorized capital stock of the Company is comprised of
60,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par
value $0.001 per share ("Preferred Stock"). [No] [_____] shares of Preferred
Stock have been issued. As of the date of the Underwriting Agreement, _____
shares of Common Stock were issued and are outstanding and the Company's Float
(as defined in the Underwriting Agreement) was more than 17,608,000 shares of
Common Stock .
3. All the outstanding shares of [capital stock of the Company]
[Common Stock] have been duly authorized and validly issued, and are fully paid,
nonassessable and, to my knowledge, not subject to any preemptive or similar
rights.
4. Each subsidiary of the Company listed on Annex A hereto (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and each Subsidiary has full corporate power
and authority to own its properties and to conduct its business as described in
the Prospectus. All the outstanding shares of capital stock of each of the
Subsidiaries are owned by the Company, directly or indirectly through one or
more Subsidiaries, to my knowledge free and clear of any perfected security
interest other than the security interests granted in connection with the
Amended and Restated Credit Agreement dated as of August 31, 2001, as amended,
the parties to which include the Company, the Guarantors named therein, the
Lenders named therein and The Chase Manhattan Bank, as administrative agent.
5. To my knowledge, except as described in or contemplated by the
Prospectus and except for stock options granted pursuant to the Company's
incentive plans and shares of Common Stock issuable under the Company's employee
stock purchase plan, neither the Company nor any Subsidiary has granted any
outstanding option, warrant or other right calling for the issuance of any share
of capital stock of the Company or any Subsidiary.
6. To my knowledge, there are no contracts, agreements or
understandings between the Company and any person restricting the voting or
transfer of any of the Shares except as described in the Prospectus or
Prospectus Supplement or granting that person the right to require the Company
to include securities with the Shares to be sold pursuant to the Prospectus
Supplement except as described therein (other than those contracts, agreements
and understandings the relevant provisions of which have been waived).
7. I do not know of any pending or threatened legal or governmental
proceedings involving the Company that are required to be disclosed in the
Prospectus (or any amendment or supplement thereto) that are not described as
required.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and your representatives at which the contents of the
Registration Statement and the Prospectus and related matters were discussed.
Although I have not undertaken to determine independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, I advise you that, on
the basis of the foregoing (relying as to materiality to a large extent on
statements and other representations of officers and other representatives of
the Company), no facts have come to my attention that lead me to believe that
the Registration Statement (other than (a) the financial statements (including
the notes thereto and the auditors' reports thereon) included or incorporated by
reference therein or omitted therefrom and (b) the other accounting, financial
and statistical information contained or incorporated by reference therein or
omitted therefrom, as to which I have not been asked to comment, and it being
understood that I am making no statement as to the accuracy of any statement or
representation in any exhibit to the Registration Statement), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (other than
(a) the financial statements (including the notes thereto and the auditors'
reports thereon) included or incorporated by reference therein or omitted
therefrom and (b) the other accounting, financial and statistical information
contained or incorporated by reference therein or omitted therefrom, as to which
I have not been asked to comment), as of its issue date or the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In the opinions set forth above, phrases such as "to my knowledge" and
those with equivalent wording refer to my conscious awareness without any
independent investigation.
I am licensed to practice law only in the State of Texas. The
opinions set forth above are limited in all respects to matters of the laws of
the State of Texas and the corporation law of the State of Delaware. This
opinion is provided in my capacity as General Counsel of the Company and not in
my individual capacity as an attorney.
The opinions set forth above are solely for the benefit of the
Underwriter in connection with the transactions consummated on the date hereof
pursuant to the Underwriting Agreement and may not be relied on by any other
person or for any other purpose.
Very truly yours,
FORM OF OUTSIDE COUNSEL'S OPINION
---------------------------------
[Letterhead of Xxxxx Xxxxx L.L.P.]
_____ __, 200__
Ladies and Gentlemen:
This opinion is being furnished pursuant to Section 3.1(j) of the
Flexible Underwritten Equity FaciLity ("FUEL(R)") Agreement dated as of January
7, 2002 (the "Underwriting Agreement") between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and Ramius Securities, LLC (the "Underwriter"),
relating to the issuance and sale of __________ shares (the "Shares") of the
Company's common stock, par value $0.001 per share ("Common Stock"), under the
Underwriting Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-42860)
relating to the registration under the Securities Act of 1933, as amended, and
the offering thereof from time to time in accordance with the rules and
regulations of the Commission thereunder (collectively, the "1933 Act"), of
securities of the Company, including the Shares. That registration statement,
as amended by a post-effective amendment that the Company filed with the
Commission on __________ ___, 2002, at the time that post-effective amendment
became effective, including all documents filed as part thereof or incorporated
by reference therein, is hereinafter referred to as the "Registration
Statement," and the Company's prospectus dated __________ ___, 2002, together
with the Company's prospectus supplement dated _____ __, 200_, each as filed
with the Commission pursuant to Rule 424(b) under the 1933 Act, including all
documents incorporated by reference therein, are hereinafter collectively
referred to as the "Prospectus."
We have examined the originals, or copies certified or otherwise
identified, of the restated certificate of incorporation and bylaws, each as
amended to date, of the Company (the "Charter Documents"), the Registration
Statement, the Prospectus, the Underwriting Agreement , corporate records of the
Company, including minute books of the Company as furnished to us by the
Company, certificates of public officials and of representatives of the Company,
statutes and other instruments and documents, as a basis for the opinions
hereinafter expressed. In giving these opinions, we have relied on certificates
of officers of the Company with respect to the accuracy of the factual matters
contained in those certificates, and we have assumed that all signatures on
documents examined by us are genuine, all documents submitted to us as originals
are authentic, all documents submitted to us as certified or photostatic copies
conform to the original copies of those documents and those original copies are
authentic.
On the basis of the foregoing and subject to the limitations and
assumptions set forth herein, we are of the following opinions:
1. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware and has full
corporate power and authority to own its properties and to conduct its business
as described in the Prospectus.
2. The Common Stock conforms in all material respects as to legal
matters to the description thereof contained in the Prospectus. The authorized
capital stock of the Company is comprised of 60,000,000 shares of Common Stock
and 10,000,000 shares of preferred stock, par value $0.001 per share.
3. The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in accordance with the
terms of the Underwriting Agreement, will be validly issued, fully paid and
nonassessable and will not have been issued in violation of the preemptive or
other similar rights of any holder of any securities of the Company existing
under the Charter Documents, the corporation law of the State of Delaware or, to
our knowledge, otherwise.
4. To our knowledge, no litigation or governmental proceedings are
pending or threatened against the Company that would reasonably be expected to
materially and adversely affect the Company's ability to perform its obligations
under the Underwriting Agreement.
5. The Registration Statement has become effective under the 1933 Act
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending before or threatened by the Commission. Any required filing of the
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b).
6. The Company has the corporate power and authority to enter into
the Underwriting Agreement and to issue, sell and deliver the Shares to be sold
by it to the Underwriter as provided in the Underwriting Agreement. The
Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
7. The execution and delivery of the Underwriting Agreement by the
Company, the consummation by the Company of the transactions contemplated by the
Underwriting Agreement (including the issuance, delivery and sale of the Shares
pursuant to the Underwriting Agreement) and compliance by the Company with the
terms of the Underwriting Agreement (a) do not and will not result in any
violation of the Charter Documents and (b) to our knowledge, do not and will not
conflict with, result in a breach of any of the terms of, constitute a default
under or result in the creation of any lien, charge or encumbrance on any
property or assets of the Company under (i) any agreement, indenture, lease or
other instrument (A) to which the Company is a party or by which the Company or
any of its properties is bound and (B) which has been described in or filed as
an exhibit to the Registration Statement or (ii) any existing applicable law,
rule or regulation (other than securities or "blue sky" laws of the various
states or other jurisdictions, as to which we have not been asked to comment),
except, in each case referred to in this clause (b), for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole.
8. No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official is required on the part of the
Company (except as have been obtained under the 1933 Act, or such as may be
required under state or foreign securities or "blue sky" laws governing the
purchase and distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriter as contemplated by the Underwriting Agreement.
9. The Charter Documents do not restrict, in the case of the Shares,
the voting rights or rights of transfer which they afford shares of Common Stock
generally.
10. The Registration Statement and the Prospectus and any supplements
or amendments thereto (other than (a) the financial statements (including the
notes thereto and the auditors' reports thereon) included or incorporated by
reference therein or omitted therefrom, (b) the exhibits included or
incorporated by reference therein or omitted therefrom and (c) the other
accounting, financial and statistical information contained or incorporated by
reference therein or omitted therefrom, as to
which we have not been asked to comment), as of their respective effective or
issue dates, appear on their face to have been appropriately responsive in all
material respects to the requirements of the 1933 Act.
11. Each document previously filed pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference
in the Prospectus, at the time it was filed or last amended (other than (a) the
financial statements (including the notes thereto and the auditors' reports
thereon) included or incorporated by reference therein or omitted therefrom, (b)
the exhibits included or incorporated by reference therein or omitted therefrom
and (c) the other accounting, financial and statistical information contained or
incorporated by reference therein or omitted therefrom, as to which we have not
been asked to comment), appeared on its face to have been appropriately
responsive in all material respects to the requirements of the 1934 Act.
12. We do not know of any agreement, contract, indenture, lease or
other instrument of a character required to be described or referred to in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement which has
not been described or referred to or filed as required.
13. The Shares have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance. The form of
certificate used to evidence the Shares complies in all material respects with
the applicable requirements of the Delaware General Corporation Law and the
Charter Documents.
14. 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" as that term is defined in
the Investment Company Act of 1940, as amended.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and your representatives at which the contents of the
Registration Statement and the Prospectus and related matters were discussed.
Although we have not undertaken to determine independently, and do not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, we advise you that,
on the basis of the foregoing (relying as to materiality to a large extent on
statements and other representations of officers and other representatives of
the Company), no facts have come to our attention that lead us to believe that
the Registration Statement (other than (a) the financial statements (including
the notes thereto and the auditors' reports thereon) included or incorporated by
reference therein or omitted therefrom and (b) the other accounting, financial
and statistical information contained or incorporated by reference therein or
omitted therefrom, as to which we have not been asked to comment, and it being
understood that we are making no statement as to the accuracy of any statement
or representation in any exhibit to the Registration Statement), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than (a) the
financial statements (including the notes thereto and the auditors' reports
thereon) included or incorporated by reference therein or omitted therefrom and
(b) the other accounting, financial and statistical information contained or
incorporated by reference therein or omitted therefrom, as to which we have not
been asked to comment), as of its issue date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In the opinions set forth above, phrases such as "to our knowledge,"
"known to us" and those with equivalent wording refer to the conscious awareness
of information by the lawyers of this Firm who have prepared this opinion,
signed this letter or been actively involved in assisting and advising the
Company in connection with the preparation of the Registration Statement, the
Prospectus and the
execution and delivery of the Underwriting Agreement, without any independent
investigation by any lawyer of this Firm.
The opinions set forth above are limited in all respects to matters of
the laws of the States of New York and Texas, the corporation law of the State
of Delaware and applicable federal law.
The opinions set forth above are solely for the benefit of the
Underwriter in connection with the transactions consummated on the date hereof
pursuant to the Underwriting Agreement and may not be relied on by any other
person or for any other purpose.
Very truly yours,
EXHIBIT 3.1(l)
---------------
U.S. CONCRETE, INC.
OFFICER'S CERTIFICATE
I, ________________, the ___________________ of U.S. Concrete, Inc.
(the "Company"), do hereby certify that:
1. This Certificate is provided pursuant to Section 3.1(l) of the Flexible
Underwritten Equity FaciLity ("FUEL(R)") Agreement dated as of January 7,
2002 (the "Underwriting Agreement"), by and among the Company and Ramius
Securities, LLC.
2. As of the closing under the Underwriting Agreement being effected on the
date hereof (the "Closing"), all the conditions to the Closing required by
the Underwriting Agreement to be performed or satisfied by the Company at
or prior to the Closing have been performed and satisfied in all material
respects and all representations and warranties of the Company as set forth
in the Underwriting Agreement are true and correct in all material
respects.
3. The Company's Board of Directors (or a duly appointed committee thereof)
has duly authorized the issuance of the Common Stock delivered by the
Company at Closing and no further consent or authorization is required by
the Company's Board of Directors or any committee thereof or the
stockholders of the Company.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
___ day of ____________, 200_.
U.S. CONCRETE, INC.
By:__________________________________
Name:_____________________________
Title:____________________________
EXHIBIT 3.1(m)
-------------
U.S. CONCRETE, INC.
CLEARING BROKER INSTRUCTIONS
Date:_________________
Bear Xxxxxxx Securities Corporation
Xxx Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Flexible Underwritten Equity FaciLity
("FUEL(R)") Agreement dated as of January 7, 2002 (the ""Underwriting
Agreement") between U.S. Concrete, Inc. (the "Company") and Ramius Securities,
LLC ("Ramius").
This letter shall serve as our irrevocable authorization and direction
to you (provided that you are acting as the clearing broker for Ramius at such
time) to deduct from the Company's account with Ramius (Account No.
_____________) the amount of commission that Ramius notifies you in writing,
from time to time, is due to Ramius pursuant to the Underwriting Agreement from
any proceeds of sales made by Ramius on our behalf.
The Company hereby agrees to hold you harmless from any liability
resulting from the payment of any commission from the Company's account to
Ramius pursuant to written instructions by Ramius.
Please be advised that Ramius is relying upon this letter as an
inducement to enter into the Underwriting Agreement and, accordingly, Ramius is
a third party beneficiary to these instructions.
Should you have any questions concerning this matter, please contact:
Name: ________________________________
Telephone Number: ____________________
U.S. CONCRETE, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
cc: Xxxxxxx X. Xxxxxxx, Ramius Securities, LLC
Xxxxxxx X. Xxxxxxxx, Esq., Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
EXHIBIT 3.1(n)
--------------
TRANSFER AGENT INSTRUCTIONS
U.S. CONCRETE, INC.
___________ ___, 200_
American Stock Transfer and Trust Company
[Address]
Ladies and Gentlemen:
Reference is made to the Flexible Underwritten Equity FaciLity
("FUEL(R)") Agreement dated as of January 7, 2002 (the "Underwriting Agreement")
by and among U.S. Concrete, Inc. (the "Company") and Ramius Securities, LLC (the
"Underwriter").
This letter shall serve as our authorization and direction to you
(provided that (i) you are acting as the transfer agent of the Company at such
time and (ii) we have not terminated this authorization subsequent to the date
hereof) to issue up to 1,800,000 shares of Common Stock, par value $.001 per
share of the Company ("Common Stock") to, or upon the order of, the Underwriter
from time to time upon the Underwriter's delivery to you of Transfer Agent
Instructions in the form attached hereto as Exhibit A.
---------
You acknowledge and agree that so long as the Registration Statement
covering sales of the Common Stock by the Underwriter on behalf of the Company
remains effective under the Securities Act of 1933, as amended, then you shall
issue, within three business days of any order referred to in the immediately
preceding paragraph, shares of Common Stock in accordance with such order and
the certificates representing such shares of Common Stock shall not bear any
legend restricting transfer of the Common Stock represented thereby and should
not be subject to any stop-order transfer restriction.
Please be advised that the Underwriter is relying upon this letter as
an inducement to enter into the Agreement and, accordingly, the Underwriter is a
third party beneficiary to these instructions.
Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you have any
questions concerning this matter, please contact:
Name: ________________________________
Telephone Number: ____________________
U.S. CONCRETE, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
THE FOREGOING INSTRUCTIONS
ARE ACKNOWLEDGED AND AGREED TO
this ___ day of ____________, 200_
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:________________________________________
Name:___________________________________
Title:__________________________________
Enclosure
cc: Xxxxxxx X. Xxxxxxx, Ramius Securities, LLC
Xxxxxxx X. Xxxxxxxx, Esq., Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
EXHIBIT A
TRANSFER AGENT INSTRUCTIONS
The undersigned hereby requests that __________ shares of Common
Stock, par value $.001 per share, of U.S. Concrete, Inc. be electronically
issued and delivered as follows:
ISSUE TO:______________________________________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_______________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:____________________________________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_______________________________________________________________________________
(INSTRUCTIONS FOR ELECTRONIC DELIVERY)
RAMIUS SECURITIES, LLC
By:_____________________________________
Name:___________________________________
Title:__________________________________
Dated:____________________
EXHIBIT 3.3
-----------
NOTICE OF BLOCKING PERIOD
-------------------------
[Letterhead of Company]
__________ __, 200_
Xx. Xxxxxxx X. Xxxxxxx
Ramius Securities, LLC
Chrysler Center
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
Reference is made to the Flexible Underwritten Equity FaciLity
"FUEL(R)") Agreement (the "Underwriting Agreement"), dated as of January 7,
2002, by and among U.S. Concrete, Inc. (the "Company") and Ramius Securities,
LLC (the "Underwriter"). Capitalized terms which are defined in the
Underwriting Agreement are used herein as so defined.
This letter shall serve as our notice to you that [the effectiveness
of the Registration Statement has been withdrawn or suspended] [the Common Stock
issuable under the Agreement is no longer validly listed or included on the
Principal Market] [we have failed to satisfy the requirements of Section 3.1 or
3.2 of the Agreement] [we have failed to comply with one or more of the
covenants set forth in Article VI of the Agreement] [there has been a merger or
consolidation of the Company, or a transfer of all or substantially all of the
assets of the Company to, another entity][the Company believes that a fact
exists or an event has occurred that makes any statement of material fact in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue in any material respect,
or that requires changes in any such document in order to make the statements
therein not misleading in any material respect] (the "Blocking Event") and that
you are not obligated to sell any shares on our behalf under the Agreement so
long as the Blocking Event is continuing.
Please execute this letter in the space indicated to acknowledge your
receipt of this notice. Should you have any questions concerning this matter,
please contact:
Name: _______________________________
Telephone Number: ___________________
U.S. CONCRETE, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
RECEIPT OF THE FOREGOING NOTICE IS
HEREBY ACKNOWLEDGED AND AGREED TO
this ___ day of _________, 200_
RAMIUS SECURITIES, LLC
By:_______________________________________
Name:__________________________________
Title:_________________________________
cc: Xxxxxxx X. Xxxxxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
