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Exhibit 1.1
2,200,000 Shares
XXXXXX STEEL COMPANY
Common Stock
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UNDERWRITING AGREEMENT
June __, 1997
Principal Financial Securities, Inc.
Cruttenden Xxxx Incorporated
As Representatives of the Several Underwriters
c/o Principal Financial Securities, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Dear Sirs:
Xxxxxx Steel Company, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule I annexed hereto (the
"Underwriters") an aggregate of 2,200,000 shares of Common Stock, par value
$.001 per share (the "Common Stock"), of the Company. The aggregate of 2,200,000
shares to be purchased from the Company are herein called the "Firm Shares." In
addition, the Company has agreed to sell to the Underwriters, upon the terms and
conditions set forth herein, up to 330,000 additional shares of Common Stock
(the "Additional Shares") to cover over-allotments by the Underwriters, if any.
The Firm Shares and, to the extent such option is exercised, the Additional
Shares are hereinafter collectively referred to as the "Shares."
The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several Underwriters, on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1, including a
prospectus subject to completion, relating to the Shares. Such registration
statement (including all financial schedules and exhibits), as amended at the
time when it
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becomes effective and as thereafter amended by any post-effective amendment, is
referred to in this Agreement as the "Registration Statement." The term
"Prospectus" as used in this Agreement means (i) the prospectus in the form
included in the Registration Statement, or (ii) if the prospectus included in
the Registration Statement omits information in reliance upon Rule 430A under
the Act and such information is included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act or as part of a post-effective
amendment to the Registration Statement after the Registration Statement becomes
effective, the prospectus as so filed, or (iii) if the prospectus included in
the Registration Statement omits information in reliance upon Rule 430A under
the Act and such information is included in a term sheet (as described in Rule
434(b) under the Act) filed with the Commission pursuant to Rule 424(b) under
the Act, the prospectus included in the Registration Statement and such term
sheet, taken together. The Prospectus subject to completion in the form included
in the Registration Statement dated May 8, 1997, and as such prospectus is
amended from time to time until the date upon which the Registration Statement
is declared effective by the Commission is referred to in this Agreement as the
"Prepricing Prospectus." The term "Registration Statement" shall include any
registration statement filed by the Company pursuant to Rule 462(b) of the Act
to register a portion of the Common Stock.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees
to sell 2,200,000 Firm Shares to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company at a purchase
price of $____ per Share (the "purchase price per Share"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares as adjusted pursuant to Section 10 hereof).
The Company also agrees to sell up to 330,000 Additional Shares to the
Underwriters and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, the Underwriters shall have the right for 30 days
from the date of this Agreement to purchase from the Company up to 330,000
Additional Shares at the purchase price per Share for the Firm Shares. The
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments as you may determine to avoid factional shares) which bears the same
proportion to the number of Additional Shares to be sold as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares as adjusted pursuant to Section 10 hereof) bears to
2,200,000.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company has been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
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SECTION 4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
Delivery or registry of and payment for the Firm Shares shall be made at the
offices of Principal Financial Securities, Inc., 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx, at 10:00 a.m., Dallas, Texas time, on the fourth full business
day following the date of this Agreement (the "Closing Date"). The place of
delivery for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery or registry of and payment for any Additional Shares shall be
made at the offices of Principal Financial Securities, Inc., 0000 Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx, at 10:00 a.m., Dallas, Texas time, on such date or
dates (the "Additional Closing Date") (which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor earlier than three
nor later than ten business days after the giving of the notice hereinafter
referred to) as shall be specified in a written notice from you on behalf of the
Underwriters to the Company of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be given
to the Company by you at any time within 30 days after the date of this
Agreement. The place of delivery for the Additional Shares and the Additional
Closing Date may be varied by agreement between you and the Company.
Firm Shares shall be registered in the name of the nominee of the
Depository Trust Company ("DTC"), Cede & Co., and credited to the accounts of
such Underwriters as the Representatives shall request, upon notice to the
Company at least 48 hours prior to the Closing Date, with any transfer taxes
payable in connection with the transfer of the Firm Shares to the Underwriters
duly paid, against payment by or on behalf of the Underwriters to the account of
the Company of the aggregate purchase price therefor by wire transfer in
immediately available funds. The Company will make the certificate or
certificates for the Firm Shares available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's transfer
agent or registrar or of the Representatives at least 24 hours prior to the
Closing Date. One or more certificates in definitive form representing any
Additional Shares purchased shall be delivered, or, if such Additional Shares
are to be held through DTC, such Additional Shares shall be registered and
credited, on the Additional Closing Date in the same manner, and upon the same
terms and conditions set forth for the delivery and payment for Firm Shares.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a) The Company will use commercially reasonable efforts to
cause the Registration Statement to become effective and will advise
you promptly and, if requested by you, will confirm such advice in
writing (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective, (ii) if
Rule 430A under the Act is employed, when the Prospectus or term sheet
(as described in Rule 434(b) under the Act) has been timely filed
pursuant to Rule 424(b) under the Act, (iii) of any request by the
Commission for amendments or supplements to the Registration Statement,
any Prepricing Prospectus or the Prospectus or for additional
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information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation (or threatened initiation) of any
proceeding for such purposes, and (v) within the period of time
referred to in Section 5(e) below, of any change in the Company's
condition (financial or other), business, backlog of contracts,
prospects, leases, properties, net worth or results of operations, or
of any event that comes to the attention of the Company that makes any
statement made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue in any material respect or that
requires the making of any additions thereto or changes therein in
order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, the Company will use commercially
reasonable efforts to obtain the withdrawal of such order at the
earliest possible time.
(b) The Company will furnish to you, without charge, three
signed copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you,
without charge, such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto as you may
reasonably request.
(c) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus of which you shall not previously have been advised (with a
reasonable opportunity to review such amendment or supplement) or to
which you have reasonably objected after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such
quantities as you have requested or may hereafter reasonably request,
copies of each form of the Prepricing Prospectus. The Company consents
to the use, in accordance with the provisions of the Act and with the
securities or "Blue Sky" laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Prepricing Prospectus so furnished by
the Company.
(e) As soon after the execution and delivery of this Agreement
as is reasonably practicable and thereafter from time to time for such
period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or a dealer, the Company will deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the
provisions of the Act and with the securities
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or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and
for such period of time thereafter as the Prospectus is required by the
Act to be delivered in connection with sales by any Underwriter or
dealer. If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Act or any other
law, the Company will forthwith prepare and file with the Commission an
appropriate supplement or amendment thereto, and will furnish to each
Underwriter and to each dealer who has previously requested
Prospectuses, without charge, a reasonable number of copies hereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with any filings and notifications regarding
the offering and sale of Shares by the several Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as
you may reasonably designate and will file such consents to service of
process or other documents as may be reasonably necessary in order to
effect such registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified, to subject itself to
taxation as a result of doing business in any jurisdiction where it is
not now so subject to taxation, to qualify as a dealer in securities in
any jurisdiction or to take any action which would subject it to
service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(g) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited,
covering a period of at least twelve months commencing after the
effective date of the Registration Statement and ending not later than
15 months thereafter, as soon as reasonably practicable after the end
of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(h) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of
the Company filed with the Commission under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") or mailed to stockholders and
(ii) from time to time such other information concerning the Company as
you may reasonably request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (other than as a
result of a failure by the Representatives or any Underwriter to
fulfill their or its obligations hereunder) or if this Agreement shall
be terminated by the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or fulfill any of the
conditions of this
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Agreement, the Company agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) reasonably incurred by you in connection herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance with
the description set forth in the Prospectus under the caption "Use of
Proceeds."
(k) If Rule 430A under the Act is employed, the Company will
timely file a Prospectus or term sheet (as described in Rule 434(b)
under the Act) pursuant to Rule 424(b) under the Act.
(l) Except as provided in this Agreement, the Company will not
offer, sell, contract to sell or otherwise dispose of any Common Stock
or rights to purchase Common Stock, or any securities convertible into
or exercisable or exchangeable for shares of Common Stock except to the
Underwriters pursuant to this Agreement, for a period of 180 days from
the date of the Prospectus without the prior written consent of the
Representatives; provided, however, that the Company may issue options
to purchase shares of Common Stock pursuant to the Company's 1997 Stock
Option Plan, and options to purchase that number of shares of Common
Stock set forth in the Registration Statement may be granted to
non-employee directors upon their appointment to the Board of Directors
of the Company.
(m) The Company will not, directly or indirectly, take any
action that would constitute, or any action designed or that might
reasonably be expected to cause or result in or constitute, under the
Act, the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares.
(n) If at any time during the 25-day period after the first date that
any of the Shares are released by you for sale to the public, any
publication or event relating to or affecting the Company shall occur
as a result of which in your opinion the market price of the Common
Stock (including the Shares) has been or is likely to be materially
affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising the Company to the
effect set forth above, forthwith consult with you concerning the
advisability and substance of, and, if appropriate, disseminate, a
press release or other public statement responding to or commenting on
such publication or event.
(o) The Company will list the Shares which it agrees to sell
under this Agreement, subject to notice of issuance, on the Nasdaq
National Market on or before the date the Registration Statement
becomes effective.
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(p) The Company will file a revocation of its election to be
taxed under subchapter S of the Internal Revenue Code and such election
shall have become effective prior to the Closing Date.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, as the case may be, that:
(a) Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424(a) under the Act,
complied when so filed with the provisions of the Act.
(b) The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus, and the Prepricing
Prospectus included as part of the Registration Statement declared
effective by the Commission complies as to form with the requirements
of the Act. The Registration Statement, in the form in which it becomes
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective, and the Prospectus, and any
supplement or amendment thereto when filed with the Commission under
Rule 424(b) under the Act, will comply with the provisions of the Act
and will not at any such times contain an 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 light of the
circumstances under which they were made, not misleading, except that
this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any
amendment or supplement thereto) made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through you
expressly for use therein.
(c) The authorized and outstanding capital stock of the
Company conforms to the description thereof in the Registration
Statement and the Prospectus as of the date set forth therein. All the
outstanding shares of Common Stock of the Company have been duly
authorized by all necessary corporate action on the part of the Company
and validly issued, are fully paid and nonassessable and were not
issued in violation of or subject to any preemptive rights arising
under the Company's Certificate of Incorporation or Bylaws or under the
Delaware General Corporation Law or similar rights; the Shares to be
issued and sold to the Underwriters by the Company hereunder have been
duly authorized by all necessary corporate action on the part of the
Company and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and will not have been issued in
violation of or subject to any preemptive rights arising under the
Company's Certificate of Incorporation or Bylaws or under the Delaware
General Corporation Law or similar rights; the capital stock of the
Company conforms in all material respects to the description thereof in
the Registration Statement and the Prospectus (or any amendment
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or supplement thereto); and upon delivery of certificates for the
Shares pursuant to the terms of this Agreement and payment for the
Shares the Underwriters will receive valid and marketable title to the
Shares, free and clear of any voting trust arrangements, liens,
encumbrances, equities, claims or defects in title to the several
Underwriters purchasing the Shares in good faith and without notice of
any lien, claim or encumbrance.
(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or conduct of its business
requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on
the condition (financial or other), business, backlog of contracts,
prospects, leases, properties, net worth or results of operations of
the Company.
(e) Each of the subsidiaries of the Company identified in
Exhibit 21 to the Registration Statement ("Subsidiary" or,
collectively, the "Subsidiaries") is a corporation duly organized,
validly existing and in good standing in its jurisdiction of
incorporation or is a limited or general partnership duly formed and
validly existing in its jurisdiction of organization, as the case may
be, and each Subsidiary has full corporate or partnership power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
and is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such qualification
or registration, except where the failure to so qualify or register
does not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole. All
of the outstanding shares of capital stock of, or partnership or other
equity ownership interests in, each of the Subsidiaries has been duly
authorized and validly issued, are fully paid and nonassessable, and
are owned by the Company directly or indirectly through one of the
other Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance. Except for the Subsidiaries, the
Company does not own a material interest in or control, directly or
indirectly, any other corporation, partnership, joint venture,
association, trust or other business organization or entity.
(f) The domestication merger (as described in the Prospectus)
has been completed and carried out in compliance with all federal and
state securities laws and the corporate laws of the states of Delaware
and Arizona. Pursuant to the domestication merger, the Company has
succeeded to all of the rights, privileges, immunities and powers of
Xxxxxx Steel Company, an Arizona corporation (the "Former Company"),
and all assets and liabilities formerly belonging to the Former Company
have been transferred
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by operation of law to and vested in the Company, unimpaired by the
domestication merger.
(g) Prior to the date upon which the Registration Statement is
declared effective, the S Corporation Distribution (as defined in the
Prospectus) shall have been duly authorized and properly declared in
compliance with applicable law. Authorization, declaration and payment
of the S Corporation Distribution, as such events occur, will not be
prohibited by, and will not constitute a breach of, any material
agreement or debt facility to which the Company is a party.
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(h) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened against the Company or any
of the Subsidiaries, or to which any of their property, is subject,
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) but are not
described as required. Except as required to be described in the
Prospectus and so described, there is no action, suit, inquiry,
proceeding, or investigation by or before any court or governmental or
other regulatory or administrative agency or commission pending or, to
the best knowledge of the Company, threatened against or involving the
Company or any Subsidiary, nor is there any basis for such action,
suit, inquiry, proceeding or investigation. There are no agreements,
contracts, indentures, leases or other instruments that are required to
be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required. All
agreements, contracts, indentures, leases or other instruments
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or filed as an exhibit to the
Registration Statement have been duly authorized, executed and
delivered by the Company or a Subsidiary, constitute valid and binding
agreements of the Company or such Subsidiary and are enforceable
against the Company or such Subsidiary in accordance with the terms
thereof, except insofar as the enforcement may be limited by (i) any
bankruptcy, reorganization, insolvency, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and (ii) general principles of equity and
public policy (regardless of whether such is considered at law or in
equity).
(i) Neither the Company nor any Subsidiary is in violation of
its certificate or articles of incorporation or bylaws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any
Subsidiary or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary, or in default
in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to
which the Company or any Subsidiary is a party or by which any of their
respective properties may be bound, except for such violations or
defaults which would not have a material adverse effect on the
condition (financial or otherwise), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries,
taken as a whole.
(j) The execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement have
been duly and validly authorized by the Company, and this Agreement has
been duly executed and delivered by the Company and constitutes the
valid and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms.
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(k) None of the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor
the consummation by the Company of the transactions contemplated hereby
(i) is or may be void or voidable by any person or entity, (ii)
requires any 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 (except such as
may be required for the registration of the Shares under the Act and
compliance with the securities or Blue Sky laws of various
jurisdictions and the clearance of the offering of the Shares with the
National Association of Securities Dealers, Inc. (the "NASD"), all of
which will be, or have been, effected in accordance with this
Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws, or other organizational documents, of the
Company or any Subsidiary, or (iii) conflicts or will conflict with or
constitutes a breach of, or a default under, any agreement, contract,
indenture, lease or other instrument to which the Company or any
Subsidiary is a party or by which any of them or any of their
respective properties may be bound, or violates any statute, law,
regulation or filing or judgment, injunction, order or decree
applicable to the Company or any Subsidiary or any of their respective
properties, or results in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the terms of any agreement or instrument to
which any of them is a party or by which any of them may be bound or to
which any of their property or assets is subject.
(l) Each contract, agreement or arrangement to which the
Company or any Subsidiary is a party or by which it is bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject, which is material to the condition (financial or other),
business, backlog of contracts, prospects, leases, properties, net
worth or results of operations of the Company and its Subsidiaries,
taken as a whole, has been duly and validly authorized, executed and
delivered by the Company or such Subsidiary, as applicable, and neither
the Company nor any Subsidiary is in breach or default of any
obligation, agreement, covenant or condition contained in any such
contract, agreement or arrangement, except for such breaches or
defaults as would not have a material adverse effect on the condition
(financial or other), business, backlog of contracts, prospects,
leases, properties, net worth or results or operations of the Company
and its Subsidiaries, taken as a whole; the Company knows of no present
condition or fact which would prevent compliance by the Company or any
Subsidiary or any other party thereto with the terms of any such
contract, agreement or arrangement in all material respects; neither
the Company nor any of its Subsidiaries has any present intention to
exercise any rights that it may have to cancel any such contract,
agreement or arrangement or otherwise to terminate its rights and
obligations thereunder, and none of them has any knowledge that any
other party to any such contract, agreement or arrangement has any
intention not to render full performance in all material respects as
contemplated by the terms thereof.
(m) Except as described in the Prospectus, the Company does
not have outstanding and at the Closing Date (and the Additional
Closing Date, if applicable) will
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not have outstanding any options to purchase, or any warrants to
subscribe for, or any securities or obligations convertible into or
exchangeable for, or any contracts or commitments to issue or sell, any
shares of Common Stock or any such warrants or convertible or
exchangeable securities or obligations. No holder of securities of the
Company has rights to the registration of any securities of the Company
because of the filing of the Registration Statement.
(n) Ernst & Young LLP, the certified public accountants who
have certified the financial statements filed as part of the
Registration Statement and the Prospectus (or any amendment or
supplement thereto) are independent public accountants as required by
the Act.
(o) The financial statements, together with related schedules
and notes, forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly in
all material respects the consolidated financial position, results of
operations and changes in financial position of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein;
and the other financial and statistical information and data included
in the Registration Statement and Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company.
(p) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any Subsidiary has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Company and the Subsidiaries, taken as a whole, and
there has not been any material change in the capital stock, or
material increase in the short-term debt or long-term debt, of the
Company or any Subsidiary, or any development involving or which may
reasonably be expected to involve a potential future material adverse
change in the condition (financial or other), business, backlog of
contracts, prospects, leases, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole.
(q) The Company or each Subsidiary, as the case may be, has
good and marketable title to all its properties (real and personal)
described in the Prospectus as being owned by them, in each case free
and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement
and the Prospectus or in a document filed as an exhibit to the
Registration Statement, and the
13
property (real and personal) held under lease by each of the Company or
the Subsidiaries, as the case may be, is held by it under valid,
subsisting and enforceable leases.
14
(r) The Company has not distributed and will not distribute
prior to the Closing Date any offering material in connection with the
offering and sale of the Shares other than the Prepricing Prospectus,
the Registration Statement, the Prospectus and such other materials as
may be permitted by the Act.
(s) The Company has not taken, directly or indirectly, any
action which constituted, or any action designed or which might
reasonably be expected to cause or result in or constitute, under the
Act, the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares.
(t) The Company is not an "investment company," an "affiliated
person" of, or "promoter" or "principal underwriter" for an investment
company within the meaning of the Investment Company Act of 1940, as
amended.
(u) The Company and each of the Subsidiaries have all permits,
licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities or private persons or entities
(hereinafter "permit" or "permits") as are necessary to own its
properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus, except where the failure to have obtained any such permit
has not and will not have a material adverse effect upon the condition
(financial or other), business, backlog of contracts, prospects,
leases, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole; the Company and each of the
Subsidiaries have fulfilled and performed all of their material
obligations with respect to each such permit and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination of any such permit or result in any other material
impairment of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the Prospectus;
and such permits contain no restrictions that are materially burdensome
to the Company or any Subsidiary.
(v) The Company and each Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; and neither the Company nor any Subsidiary has reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a comparable cost.
(w) The Company and the Subsidiaries have existing contractual
arrangements sufficient to provide payment and performance bonds
required by anticipated operations; and neither the Company nor any
Subsidiary has reason to believe that the Company will not be able to
renew such arrangements as and when they expire or to institute similar
arrangements as may be necessary to obtain desired payment and
performance bonds at a comparable cost.
15
(x) The Company and the Subsidiaries have complied and will
comply in all material respects with wage and hour determinations
issued by the U.S. Department of Labor under the Service Contract Act
of 1965 and the Fair Labor Standards Act in paying its employees'
salaries, fringe benefits and other compensation for the performance of
work or other duties in connection with contracts with the U.S.
government, and have complied and will comply in all material respects
with the requirements of the Americans with Disabilities Act of 1990,
the Family and Medical Leave Act of 1993, the Employee Retirement
Income Security Act of 1974, the Civil Rights Act of 1964 (Title VII),
the Age Discrimination in Employment Act and state labor laws, each as
amended, except where the failure to comply with any such requirements
has not, and will not, have a material adverse effect on the condition
(financial or other) business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole.
(y) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(z) Each employee benefit plan or arrangement which the
Company or any of its Subsidiaries sponsors or maintains has been
operated and maintained in all material respects in compliance with all
applicable laws and regulations including, but not limited to, the
Employee Retirement Income Security Act of 1974 and the Consolidated
Omnibus Budget Reconciliation Act of 1985, and each such employee
benefit plan or arrangement and all amendments thereto intended to
qualify under Section 401(a) of the Internal Revenue Code have been
determined by the Internal Revenue Service to so qualify and the trusts
created thereunder have been determined to be exempt from tax under the
provision of Section 501(a) of the Internal Revenue Code. All ERISA
plans of the Company have been maintained and administered in
compliance in all material respects with the requirements of ERISA and
the Internal Revenue Code.
(aa) The Company and the Subsidiaries have obtained all
required permits, licenses and other authorizations, if any, which are
required under federal, state, regional, county, local and foreign
statutes, codes, ordinances and other laws relating to pollution or
protection of the environment, including laws relating to emissions,
discharges, releases, spilling, injecting, leaching, or disposing into
the environment or threatened releases of pollutants, contaminants,
chemicals or industrial, hazardous or toxic materials or wastes into
the environment (including, without limitation, ambient air, surface
water, ground water, land surface, or subsurface strata) or otherwise
relating to the manufacture,
16
processing, distribution, use, treatment, storage, disposal, discharge
into the environment, transport, or handling of pollutants,
contaminants, chemicals or industrial, hazardous or toxic materials or
wastes, or any regulation, rule, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated, or
approved thereunder ("Environmental Laws"), except for such permits,
licenses and other authorizations which if not obtained would not have
a material adverse effect on the condition (financial or other),
business, backlog of contracts, prospects, leases, properties, net
worth or results of operations of the Company and the Subsidiaries
taken as a whole. The Company and the Subsidiaries are in material
compliance with all terms and conditions of all required permits,
licenses, and authorizations, and are also in material compliance with
all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws. There is no pending or, to the
best knowledge of the Company after due inquiry, threatened civil or
criminal litigation, notice of violation, warning letter or
administrative proceeding relating in any way to the Environmental Laws
(including, without limitation, notices, demand letters or claims under
the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), as amended by the
Superfund Amendments Reauthorization Act of 1987 ("XXXX"), the Toxic
Substances Control Act of 1976, the Emergency Planning and Community
Right-to-Know Act of 1986, the Clean Water Act of 1977, and the Clear
Air Act of 1966, all as amended, and similar foreign, state, or local
laws) involving the Company. The Company and the Subsidiaries have
provided you with all testing results and documentation pertaining to
environmental conditions on or under all properties owned or operated
by the Company or the Subsidiaries, including all testing results and
documentation pertaining to any contaminants or pollutants present in
soil or groundwater. There have not been and there are not any past,
present, or foreseeable future events, conditions, circumstances,
activities, practices, incidents, actions or plans involving the
Company which may interfere with or prevent continued compliance, or
which may give rise to any common law or legal liability, or otherwise
form the basis of any present or future claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, arrangement for disposal, transport, arrangement for
transport or handling, or the emission, discharge, release, or
threatened release into the environment, of any pollutant, contaminant,
chemical or industrial, hazardous or toxic material or waste,
including, without limitation, any liability arising, or any claim,
action, demand, suit, proceeding, hearing, study or investigation which
may be brought, under RCRA, CERCLA, XXXX, or similar foreign, state,
regional, county, or local laws. The Company and the Subsidiaries are
in material compliance with the Occupational Safety and Health Act
("OSHA") and any comparable state laws. To the best knowledge of the
Company after due inquiry, there is no pending or threatened civil or
criminal litigation, notice of violation, warning letter, or
administrative proceeding pertaining to alleged violations of OSHA or
any comparable state law.
17
(bb) All federal, state and local tax returns required to be
filed by or on behalf of the Company and each Subsidiary with respect
to all periods ended prior to the date of this Agreement have been
filed (or are the subject of valid extensions) with the appropriate
federal, state and local authorities and all such tax returns, as
filed, are accurate in all material respects. All federal, state and
local taxes (including estimated tax payments) required to be shown on
all such tax returns or claimed to be due from or with respect to the
business of the Company and each Subsidiary have been paid or reflected
as a liability on the financial statements of the Company and the
Subsidiaries for appropriate periods. All deficiencies asserted as a
result of any federal, state or local tax audits have been paid or
finally settled and, except as previously disclosed to the
Representatives in writing, no issue has been raised in any such audit
which by application of the same or similar principals, reasonably
could be expected to result in a proposed deficiency for any other
period not so audited. To the best knowledge of the Company, no state
of facts exists or has existed which would constitute grounds for the
assessment of any tax liability with respect to the periods which have
not been audited by appropriate federal, state or local authorities.
There are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any federal, state or local tax
return for any period.
(cc) No relationship, direct or indirect, exists between or
among the Company or any Subsidiary on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any
Subsidiary on the other hand, which is required by the Act to be
described in the Registration Statement and the Prospectus which is not
so described.
SECTION 7. EXPENSES. The Company hereby agrees with the several
Underwriters that the Company will pay or cause to be paid the costs and
expenses associated with the following: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each Prepricing
Prospectus, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air freight
charges and charges for packaging) of such copies of the Registration Statement,
each Prepricing Prospectus, the Prospectus, and all amendments or supplements to
any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the offering of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the registration of the Common Stock under the Exchange Act and the listing of
the Shares on the Nasdaq National Market; (vi) the reasonable fees and expenses
of counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
memoranda; (vii) the filing fees in connection with any filings required to be
made with the NASD in connection with the offering; (viii) the transportation
and other expenses to the extent incurred by or on behalf of representatives of
the Company in connection
18
with the presentations to prospective purchasers of the Shares; (ix) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
for the Company; and (x) the performance by the Company of its other obligations
under this Agreement. Notwithstanding the foregoing, in the event that the
proposed offering is terminated for the reasons set forth in Section 5(i)
hereof, the Company agrees to reimburse the Underwriters as provided in Section
5(i).
SECTION 8. INDEMNIFICATION AND CONTRIBUTION. The Company agrees to
indemnify and hold harmless you and each other Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon an untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to an
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph with respect to
any Prepricing Prospectus shall not inure to the benefit of any Underwriter (or
to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the Company
has delivered the Prospectus to the several Underwriters in requisite quantity
on a timely basis to permit such delivery or sending.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company, such Underwriter or such controlling person shall promptly
notify in writing the party or parties against whom indemnification is being
sought (the "indemnifying party" or "indemnifying parties"), and such
indemnifying party or parties shall assume the defense thereof, including the
employment of counsel reasonably acceptable to such Underwriter or such
controlling person and payment of all fees and expenses. Such Underwriter or any
such controlling person shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the indemnifying party or parties has or have agreed in
writing to pay such fees and expenses, (ii) the indemnifying party or parties
has or have failed to assume the defense and employ counsel reasonably
acceptable to the Underwriter or such controlling person within a reasonable
period of time following notice from such Underwriter or such controlling
person, or (iii) the named parties to any such action (including any impleaded
parties) include
19
both such Underwriter or such controlling person and the indemnifying party or
parties, and such Underwriter or such controlling person shall have been advised
by such counsel that representation of such indemnified party and any
indemnifying party or parties by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party or parties shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person). The indemnifying party or parties shall
not be liable for any settlement of any such action effected without its or
their prior written consent, but if settled with such prior written consent, or
if there be a final judgment for the plaintiff in any such action, the
indemnifying party or parties agree to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the immediately preceding
paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with respect
to information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action or claim shall be brought or asserted against the
Company, any of its directors, any such officers, or any such controlling person
based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the Company by the
preceding paragraph (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officers, and any such controlling persons
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph.
If the indemnification provided for in this Section 8 is unavailable to
an indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
20
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company or the Underwriters from the offering of the
Shares shall include the net proceeds (before deducting expenses) received by
the Company, and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the Prospectus. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in this Section 8 shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
21
Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
SECTION 9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) The Registration Statement shall have become effective not
later than 2:00 p.m., Dallas, Texas time, on the date hereof, or at
such later date and time as shall be consented to in writing by you,
and all filings required by Rules 424(b) and 430A under the Act shall
have been timely made prior to the Closing Date.
(b) Subsequent to the effective date of the Registration
Statement there shall not have occurred (i) any change, or any
development involving or which might reasonably be expected to involve
a potential future material adverse change, in the condition (financial
or other), business, backlog of contracts, prospects, leases,
properties, net worth or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus (or any supplement
thereto) that in your opinion, as Representatives of the several
Underwriters, would materially and adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the
Company, the Subsidiaries, or any officer or director of the Company or
the Subsidiaries which makes any statement in the Prospectus untrue or
which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to
or change in the Prospectus in order to state a material fact required
by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development
would, in your opinion, as Representatives of the several Underwriters,
materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxx & Xxxxxx, L.L.P.,
counsel for the Company, dated the Closing Date (and the Additional
Closing Date, if any), satisfactory to you, to the effect that:
22
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the
State of Delaware with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business as a
foreign corporation in good standing in the State of Arizona.
(ii) The authorized capital stock of the Company is
as set forth under the caption "Capitalization" in the
Prospectus as of the dates stated therein and the authorized
capital stock of the Company conforms in all material respects
as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital
Stock."
(iii) All shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued
and sold by the Company hereunder have been duly authorized
and validly issued, are fully paid and nonassessable and have
not been issued in violation of or subject to any preemptive
rights arising under the Company's Certificate of
Incorporation or Bylaws or under the Delaware General
Corporation Law or, to the knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire any
Shares upon issuance of such shares of capital stock by the
Company.
(iv) All offers and sales of the Company's capital
stock prior to the date hereof were made in compliance with or
were the subject of an available exemption from the
registration provisions of the Act and the registration
provisions of all other applicable state and federal laws or
regulations.
(v) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly
authorized by all necessary corporate action on the part of
the Company and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and will
have not been issued in violation of or subject to any
preemptive rights under the Company's Certificate of
Incorporation or Bylaws or under the Delaware General
Corporation Law or, to the knowledge of such counsel after
reasonable inquiry, similar rights that entitle or will
entitle any person to acquire any Shares upon the issuance of
such shares of capital stock by the Company.
(vi) The form of certificate for the Shares conforms
to the requirements of the Delaware General Corporation Law.
(vii) The domestication merger (as described in the
Prospectus) has been completed and carried out in compliance
with all federal and state securities
23
laws and the corporate laws of the states of Delaware and
Arizona. Pursuant to the domestication merger, the Company has
succeeded to all of the rights, privileges, immunities and
powers of Xxxxxx Steel Company, an Arizona corporation (the
"Former Company"), and all assets and liabilities formerly
belonging to the Former Company have been transferred by
operation of law to and vested in the Company, unimpaired by
the domestication merger.
(viii) The S Corporation Distribution has been duly
authorized and properly declared in compliance with applicable
law. Authorization, declaration and payment of the S
Corporation Distribution, as such events occur, will not
conflict with or cause a breach of any material agreement to
which the Company is a party.
(ix) The Registration Statement has become effective
under the Act and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission.
(x) The Company has the requisite corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal
and binding agreement of the Company enforceable against the
Company in accordance with its terms, except insofar as
indemnification provisions may be limited by applicable law
and as to which such counsel need not express an opinion, and
except as the enforcement may be limited by (A) any
bankruptcy, reorganization, insolvency, fraudulent conveyance
or transfer, moratorium or similar laws affecting the
enforcement of creditor's rights generally, and (B) general
principles of equity (regardless of whether such is considered
at law or in equity).
(xi) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this
Agreement, compliance by the Company with all provisions
hereof nor consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or bylaws,
or other organizational documents, of the Company or any
Subsidiary or any agreement, indenture, lease or other
instrument to which the Company or any Subsidiary is a party
or by which it or any of their properties is bound that is
made an exhibit to the Registration Statement, or results or
will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or
any Subsidiary; nor will any such action (other than
performance of the Company's indemnification obligations
hereunder, concerning which no opinion need be expressed)
result in any violation of any existing law, regulation,
24
ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or
decree known to such counsel after reasonable inquiry,
applicable to the Company, the Subsidiaries or any of their
respective properties.
(xii) To the best knowledge of such counsel after due
inquiry, 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
such as have been obtained under the Act or such as may be
required under state securities or Blue Sky laws governing the
purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters under this
Agreement.
25
(xiii) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the
financial statements and the schedules (including the notes
thereto and the auditors report thereon) included therein, the
other financial and statistical information included therein,
and the exhibits thereto as to which such counsel need not
express any opinion) comply as to form in all material
respects with the requirements of the Act.
(xiv) To the best knowledge of such counsel after due
inquiry, (A) other than as described or contemplated in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any
Subsidiary, or to which the Company or any Subsidiary, or any
of their respective property, is subject, that are required to
be described in the Registration Statement or Prospectus (or
any amendment or supplement thereto) that are not described as
required therein, and (B) there are no agreements, contracts,
indentures or other instruments that are required to be
described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that
are not described or filed as required, as the case may be.
(xv) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or
instruments described in the Registration Statement and the
Prospectus (other than routine contracts entered into by the
Company or any Subsidiary for the purchase of materials
entered into in the normal course of business) and such
agreements, contracts, indentures, leases or other documents
or instruments are fairly summarized or described therein, and
filed as exhibits thereto as required (provided that such
counsel need not express any opinion as to the completeness of
such descriptions).
(xvi) To the best knowledge of such counsel after due
inquiry, the descriptions in the Prospectus under the captions
"Business -- Governmental Regulation" and "Business --
Environmental Regulation" of statutes, regulations or legal or
governmental proceedings are accurate and present fairly the
information required to be shown (provided that counsel need
not express any opinion as to the completeness of such
descriptions).
(xvii) The Company is not 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.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials and in rendering the opinion set forth in
paragraph (viii) above, state that they have relied on oral advice of the
Commission that the Commission has declared the Registration Statement effective
26
under the Act. Copies of all such certificates shall be furnished to you and
your counsel on the Closing Date (and the Additional Closing Date, if
applicable). Such counsel shall also be entitled to state that its opinion is
limited to the federal laws of the United States of America, the laws of the
State of Arizona and the Delaware General Corporation Law.
In rendering such opinion, in each case where such opinion is qualified
by "the best knowledge of such counsel after reasonable inquiry," such counsel
may rely as to matters of fact upon certificates of executive and other officers
and employees of the Company or its Subsidiaries as you and such counsel shall
deem are appropriate and such other procedures as you and such counsel shall
mutually agree; provided, however, in each such case, such counsel shall state
that it has no knowledge contrary to the information contained in such
certificates or developed by such procedures and knows of no reason why you
should not reasonably rely upon the information contained in such certificates
or developed by such procedures.
In addition, such counsel shall state the following: Such counsel has
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 such counsel has not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus and is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus, such
counsel advises you that, on the basis of the foregoing (relying as to
materiality to a large extent upon officers and other representatives of the
Company and your representatives), no facts have come to the attention of such
counsel which lead such counsel to believe that the Registration Statement
(other than (i) the financial statements and schedules (including the notes
thereto and the auditors' reports thereon) included therein, (ii) the other
financial and statistical information included therein and (iii) the exhibits
thereto, as to which such counsel has not been asked to comment), as of the time
it became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (other than
(i) the financial statements (including the notes thereto and the auditors'
report thereon) included therein and (ii) the other financial and statistical
information included therein, as to which such counsel has not been asked to
comment), as of the issue date thereof, contained any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Plattner, Schneidman &
Xxxxxxxxx P.C., general counsel to the Company, dated the Closing Date
(and the Additional Closing Date, if any), satisfactory to you, to the
effect that:
(i) The Company is duly registered and qualified to
conduct business and is in good standing in each jurisdiction
or place where the nature of its
27
properties or the conduct of its business requires such
registration or qualification, except where the failure so to
register or qualify does not and will not have a material
adverse effect on the condition (financial or other),
business, backlog of contracts, properties, leases, net worth
or results of operations of the Company and the Subsidiaries
taken as a whole.
(ii) Each of the Subsidiaries is a corporation duly
organized and validly existing in good standing under the laws
of the jurisdiction of its organization or is duly formed and
validly existing as a limited or general partnership, as the
case may be, with full corporate or partnership power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement
thereto); and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its
business requires such registration or qualification, except
where the failure to so register or qualify does not and will
not have a material adverse effect on the condition (financial
or other), business, backlog of contracts, prospects, leases,
properties, net worth or results of operation of the Company
and the Subsidiaries, taken as a whole, and all of the
outstanding shares of capital stock of, or partnership or
other equity ownership interests in, each of the Subsidiaries
have been duly authorized by all necessary corporate or
partnership action and validly issued, and are fully paid and
nonassessable, and are owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and
clear of any security interest, or to the best knowledge of
such counsel after reasonable inquiry, any other voting trust
arrangements, liens, encumbrances, equities, claims or defects
in title.
(iii) Neither the Company nor any Subsidiary is in
violation of its certificate or articles of incorporation or
bylaws, or other organizational documents, or to the best
knowledge of such counsel after reasonable inquiry, is in
default in the performance of any obligation, agreement or
condition contained in any material bond, indenture, note or
other evidence of indebtedness or in any other contract or
agreement material to the Company and the Subsidiaries, taken
as a whole.
(iv) To the best knowledge of such counsel after
reasonable inquiry, neither the Company nor any Subsidiary is
in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or
any Subsidiary or any of their respective properties, or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any Subsidiary or any of
their respective properties, except where such violation does
not and will not have a material adverse effect on the
condition (financial or other), business, backlog of
contracts, prospects, leases, properties, net worth or results
of operation of the Company and the Subsidiaries, taken as a
whole.
28
(v) To the best knowledge of such counsel after
reasonable inquiry, the Company and each Subsidiary has such
permits, licenses, franchises, approvals, consents and
authorizations of governmental or regulatory authorities
("permits"), as are necessary to own their properties and to
conduct their business in the manner described in the
Prospectus, subject to such qualifications as may be set forth
in the Prospectus, except where the failure to have obtained
any such permit has not and will not have a material adverse
effect on the condition (financial or other), business,
backlog of contracts, prospects, leases, properties, net worth
or results of operations of the Company and the Subsidiaries,
taken as a whole; the Company and each Subsidiary has
fulfilled and performed all of their obligations with respect
to such permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or
termination thereof or result in any other material impairment
of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the
Prospectus; and such permits contain no restrictions that are
materially burdensome to the Company or any Subsidiary.
In addition, such counsel shall state the following: Such counsel has
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 such counsel has not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus and is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus, such
counsel advises you that, on the basis of the foregoing (relying as to
materiality to a large extent upon officers and other representatives of the
Company and your representatives), no facts have come to the attention of such
counsel which lead such counsel to believe that the Registration Statement
(other than (i) the financial statements and schedules (including the notes
thereto and the auditors' reports thereon) included therein, (ii) the other
financial and statistical information included therein and (iii) the exhibits
thereto, as to which such counsel has not been asked to comment), as of the time
it became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (other than
(i) the financial statements (including the notes thereto and the auditors'
report thereon) included therein and (ii) the other financial and statistical
information included therein, as to which such counsel has not been asked to
comment), as of the issue date thereof, contained any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxxxx Xxxxxxx
Xxxxxxx Weary & Xxxxxxxx LLP, counsel for the Underwriters, dated the
Closing Date (and the Additional Closing Date, if any),
29
with respect to the issuance and sale of the Firm Shares, the
Registration Statement and other related matters as you may reasonably
request and the Company and its counsel shall have furnished to your
counsel such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(f) You shall have received letters addressed to you and dated
the date hereof and the Closing Date (and the Additional Closing Date,
if any) from Ernst & Young LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the capital stock of
the Company nor any increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set
forth or contemplated in the Registration Statement or the Prospectus
(or any amendment or supplement thereto), or any development involving
or which may reasonably be expected to involve a potential future
material adverse change in the condition (financial or other),
business, backlog of contracts, prospects, leases, properties, net
worth or results of operations of the Company and the Subsidiaries,
taken as a whole; (iii) the Company and the Subsidiaries shall not have
any liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business) that are material to the Company and
the Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto); and (iv) the representations and warranties of the
Company contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date (and the
Additional Closing Date, if any) as if made on and as of the Closing
Date (and the Additional Closing Date, if any), and you shall have
received a certificate, dated the Closing Date (and the Additional
Closing Date, if any) and signed by the chief executive officer or
president and the chief financial officer or treasurer of the Company
(or such other officers as are acceptable to you) to the effect set
forth in this Section 9(g) and in Section 9(h) hereof.
(h) The Company shall not have failed at or prior to the
Closing Date (and the Additional Closing Date, if any) to have
performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior
to the Closing Date (and the Additional Closing Date, if any).
(i) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall
have reasonably requested.
(j) At or prior to the Closing Date, you shall have received
the written commitment of each of the Company's directors and executive
officers and certain other stockholders not to offer, sell, contract to
sell or otherwise dispose of any shares of
30
Common Stock or rights to purchase Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, other
than in accordance with this Agreement for a period of 180 days after
commencement of the public offering of the Shares by the Underwriters
without the prior written consent of Principal Financial Securities,
Inc.
(k) The domestication merger shall have been completed.
(l) Prior to the date the Registration Statement becomes
effective, the Shares which the Company agrees to sell pursuant to this
Agreement shall have been listed, subject to notice of issuance, on the
Nasdaq National Market.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (i) shall be dated as
of the Additional Closing Date and the opinions called for by paragraphs (c),
(d) and (e) shall be revised to reflect the sale of Additional Shares.
SECTION 10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto, or (b) release of oral notification of the effectiveness of the
Registration Statement by the Commission.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Firm Shares, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I hereto bears to the aggregate number
of Firm Shares set forth opposite the names of all non-defaulting Underwriters
or in such other proportion as may be specified in the Agreement Among
Underwriters, to purchase the Firm Shares which such defaulting Underwriter or
Underwriters agreed, but failed or refused, to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares and arrangements satisfactory
to you and the Company for the purchase of such Firm Shares are not made within
96 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven (7) days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any
31
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this Agreement.
SECTION 11. TERMINATION OF AGREEMENT. This Agreement shall be subject
to termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited, (ii) trading of
the Shares on the Nasdaq National Market shall have been suspended or materially
limited, whether as the result of a stop order by the Commission or otherwise,
(iii) a general moratorium on commercial banking activities in New York, Texas,
or Arizona shall have been declared by either federal or state authorities, (iv)
there shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial or
economic conditions or other material event the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (v) the Company or any Subsidiary shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident, or other calamity, whether or not covered by insurance, or
from any labor disputes or any legal or governmental proceeding, or there shall
have been any material adverse change (including, without limitation, a material
change in management or control of the Company) in the condition (financial or
other), business, backlog of contracts, prospects, leases, properties, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole.
Notice of such cancellation shall be promptly given to the Company and its
counsel by facsimile or telephone and shall be subsequently confirmed by letter.
SECTION 12. INFORMATION FURNISHED BY THE UNDERWRITERS. The Company
acknowledges that the paragraph of text immediately following footnote (3) on
the front cover page of the Prospectus, the stabilizing legend appearing as the
first paragraph of text on page 2 of the Prospectus, and the statements in the
first and third paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 6(b) and 8 hereof.
SECTION 13. MISCELLANEOUS. Except as otherwise provided in Sections 5,
10 and 11 hereof, notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be delivered
(i) if to the Company:
Xxxxxx Steel Company
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
32
Attention: Xxxxx X. Xxxxxx, President and
Chief Executive Officer
Facsimile: (000) 000-0000
33
with copy to:
Xxxxx & Xxxxxx, L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(ii) if to the Underwriters:
Principal Financial Securities, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
and to:
Cruttenden Xxxx Incorporated
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with copy to:
Xxxxxxxxx Xxxxxxx Xxxxxxx Weary & Xxxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
This Agreement has been and is solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other controlling
persons referred to in Section 8 hereof, and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither of the terms
"successor" and "successors and assigns" as used in this Agreement shall include
a purchaser from you of any of the Shares in his status as such purchaser.
SECTION 14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to choice of law principles thereunder. This Agreement may be
signed in various counterparts which together shall constitute one and the same
instrument. This Agreement shall
34
be effective when, but only when, at least one counterpart hereof shall have
been executed on behalf of each party hereto.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
XXXXXX STEEL COMPANY
By:______________________________________
Name:____________________________________
Title:___________________________________
CONFIRMED as of the date first above
written, on behalf of itself and the
several Underwriters named in Schedule I hereto.
Principal Financial Securities, Inc.
Cruttenden Xxxx Incorporated
By: PRINCIPAL FINANCIAL SECURITIES, INC.
By:_________________________________
Authorized Representative
35
SCHEDULE I
NUMBER OF
NAME FIRM SHARES
---- -----------
Principal Financial Securities, Inc.
Cruttenden Xxxx Incorporated
TOTAL..................................................................2,200,000
