RELIANCE STEEL & ALUMINUM CO. _____Shares of Common Stock Underwriting Agreement
Exhibit 1.1
RELIANCE STEEL & ALUMINUM CO.
_____Shares of Common Stock
____, 2008
▇.▇. ▇▇▇▇▇▇ Securities Inc.
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UBS Securities LLC
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Banc of America Securities LLC
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As Representatives of the
several Underwriters listed
in Schedule 1 hereto
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
Reliance Steel & Aluminum Co., a California corporation (the “Company”), proposes to issue and
sell to the several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are
acting as representatives (the “Representatives”), an
aggregate of ___ shares of Common Stock, no
par value per share, of the Company (the “Underwritten Shares”) and, at the option of the
Underwriters, up to an additional ___shares of Common Stock of the Company (the “Option Shares”).
The Underwritten Shares and the Option Shares are herein referred to as the “Shares”. The shares
of Common Stock of the Company to be outstanding after giving effect to the sale of the Shares are
referred to herein as the “Stock”.
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement on Form S-3 (File No. 333-___), including a prospectus, relating to the Shares. Such
registration statement, as amended at the time it became effective, including the information, if
any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the
registration statement at the time of
its effectiveness (“Rule 430 Information”), is referred to herein as the “Registration
Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in
such registration statement (and any amendments thereto) before effectiveness, any prospectus filed
with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in
the Registration Statement at the time of its effectiveness that omits Rule 430 Information, and
the term “Prospectus” means the prospectus in the form first used (or made available upon request
of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of
sales of the Shares. Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of
the effective date of the Registration Statement or the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to “amend”, “amendment” or “supplement” with
respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after such date under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the
“Exchange Act”) that are deemed to be incorporated by reference therein. Capitalized terms used
but not defined herein shall have the meanings given to such terms in the Registration Statement
and the Prospectus.
At or prior to the Applicable Time (as defined below), the Company had prepared the following
information (collectively with the pricing information set forth on Annex B, the “Pricing
Disclosure Package”): a Preliminary Prospectus dated July__, 2008 and each “free-writing
prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex B hereto.
“Applicable Time” means [ ] [A/P].M., New York City time, on ___, 2008.
2. Purchase of the Shares by the Underwriters.
(a) The Company agrees to issue and sell the Underwritten Shares to the several Underwriters
as provided in this Agreement, and each Underwriter, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set forth herein, agrees,
severally and not jointly, to purchase from the Company the respective number of Underwritten
Shares set forth opposite such Underwriter’s name in Schedule 1 hereto at a price per share (the
“Purchase Price”) of $[ ].
In addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Underwritten Shares but not payable on the Option
Shares.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10
hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares
as the Representatives in its sole discretion shall make.
The Underwriters may exercise the option to purchase Option Shares at any time in whole, or
from time to time in part, on or before the thirtieth day following the date of the Prospectus, by
written
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notice from the Representatives to the Company. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the
tenth full business day (as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two business days prior to the date and time of delivery specified therein,
except as may otherwise be agreed by the Company and the Representatives.
(b) The Company understands that the Underwriters intend to make a public offering of the
Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives
is advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Representatives in the case of the Underwritten Shares,
at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP at 10:00 A.M., New York City time, on _______,
2008, or at such other time or place on the same or such other date, not later than the fifth
business day thereafter, as the Representatives and the Company may agree upon in writing or, in
the case of the Option Shares, on the date and at the time and place specified by the
Representatives in the written notice of the Underwriters’ election to purchase such Option Shares.
The time and date of such payment for the Underwritten Shares is referred to herein as the
“Closing Date”, and the time and date for such payment for the Option Shares, if other than the
Closing Date, is herein referred to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representatives for the respective accounts
of the several Underwriters of the Shares to be purchased on such date or the Additional Closing
Date, as the case may be, with any transfer taxes payable in connection with the sale of such
Shares duly paid by the Company. Delivery of the Shares shall be made through the facilities of
The Depository Trust Company (“DTC”) unless the Representatives shall otherwise instruct. The
certificates for the Shares will be made available for inspection and packaging by the
Representatives at the office of DTC or its designated custodian not later than 1:00 P.M., New York
City time, on the business day prior to the Closing Date or the Additional Closing Date, as the
case may be.
(d) The Company acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the offering of
Shares contemplated hereby (including in connection with determining the terms of the offering) and
not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company or any
other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of
the Underwriters and shall not be on behalf of the Company.
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3. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus
included in the Pricing Disclosure Package, at the time of filing thereof, complied in all
material respects with the Securities Act, and no Preliminary Prospectus, at the time of
filing thereof, contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly for use in
any Preliminary Prospectus, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 7(b)
hereof.
(b) Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable
Time did not, and as of the Closing Date and as of the Additional Closing Date, as the case
may be, will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly for use in
such Pricing Disclosure Package, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described as such in
Section 7(b) hereof.
(c) Issuer Free Writing Prospectus. Other than the Registration Statement, the
Preliminary Prospectus and the Prospectus, the Company (including its agents and
representatives, other than the Underwriters in their capacity as such) has not prepared,
made, used, authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any “written communication” (as defined in Rule 405 under the Securities
Act) that constitutes an offer to sell or solicitation of an offer to buy the Shares (each
such communication by the Company or its agents and representatives (other than a
communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other
than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the
Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex B
hereto, each electronic road show and any other written communications approved in advance
by the Representatives. Each such Issuer Free Writing Prospectus complied in all material
respects with the Securities Act, has been or will be (within the time period specified in
Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and,
when taken together with the Preliminary Prospectus filed prior to the first use of such
Issuer Free Writing Prospectus, did not, and as of the Closing Date and as of the Additional
Closing Date, as the case may be (as then supplemented or amended), will not, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in each such Issuer Free Writing Prospectus or
Preliminary Prospectus in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in such Issuer Free Writing Prospectus or Preliminary
Prospectus, it being understood and
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agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 7(b) hereof.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic
shelf registration statement” as defined under Rule 405 of the Securities Act that has been
filed with the Commission not earlier than three years prior to the date hereof; and no
notice of objection of the Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has
been received by the Company. No order suspending the effectiveness of the Registration
Statement has been issued by the Commission, and no proceeding for that purpose or pursuant
to Section 8A of the Securities Act against the Company or related to the offering of the
Shares has been initiated or threatened by the Commission; as of the applicable effective
date of the Registration Statement and any post-effective amendment thereto, the
Registration Statement and any such post-effective amendment complied and will comply in all
material respects with the Securities Act, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and as of the date of
the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of
the Additional Closing Date, as the case may be (as then supplemented or amended), the
Prospectus will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement and the Prospectus and any amendment or supplement thereto, it
being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b) hereof.
(e) Incorporated Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus and the Pricing Disclosure Package, when they were
filed with the Commission conformed in all material respects to the requirements of the
Exchange Act, and none of such documents contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and any further documents
so filed and incorporated by reference in the Registration Statement, the Prospectus or the
Pricing Disclosure Package, when such documents are filed with the Commission, will conform
in all material respects to the requirements of the Exchange Act and will not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
(f) Financial Statements. The financial statements (including the related notes
thereto) of the Company and its consolidated subsidiaries and PNA Group Holding Corporation
(“PNA”) and its consolidated subsidiaries included or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the Prospectus comply in all
material respects with the applicable requirements of the Securities Act and the Exchange
Act, as applicable, and present fairly the financial position of the Company and its
consolidated subsidiaries and PNA and its consolidated subsidiaries, as the case may be, as
of the dates indicated and the results of their operations and the changes in their cash
flows for the periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a consistent
basis throughout the periods
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covered thereby, and any supporting schedules included or incorporated by reference in
the Registration Statement present fairly the information required to be stated therein; the
other financial information included or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus has been derived from the
accounting records of the Company and its consolidated subsidiaries and PNA and its
consolidated subsidiaries, as the case may be, and presents fairly the information shown
thereby; and the pro forma financial information and the related notes thereto included or
incorporated by reference in the Registration Statement, the Pricing Disclosure Package and
the Prospectus have been prepared in accordance with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and the assumptions underlying such pro
forma financial information are reasonable and are set forth in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
(g) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, (i) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, or any material adverse change,
or any development involving a prospective material adverse change, in or affecting the
business, properties, management, financial position or results of operations of the Company
and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries
has entered into any transaction or agreement that is material to the Company and its
subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent,
that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the
Company nor any of its subsidiaries has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, except in each case as otherwise
disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(h) Organization and Good Standing. The Company and each of its subsidiaries have been
duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have the power
and authority necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or in the aggregate, have a
material adverse effect on the business, properties, management, financial position, results
of operations of the Company and its subsidiaries taken as a whole or on the performance by
the Company of its obligations under this Agreement (a “Material Adverse Effect”). The
Company does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed on Schedule 2 hereto.
(i) Capitalization. The Company has an authorized capitalization as set forth in the
Registration Statement, the Pricing Disclosure Package and the Prospectus under the heading
“Capitalization”; all the outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and are not subject
to any pre-emptive or similar rights; except as described in or expressly contemplated by
the Pricing Disclosure Package and the Prospectus, there are no outstanding rights
(including, without
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limitation, pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other equity interest
in the Company or any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital stock of
the Company or any such subsidiary, any such convertible or exchangeable securities or any
such rights, warrants or options; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Registration Statement, the Pricing
Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or
other equity interests of each subsidiary owned, directly or indirectly, by the Company have
been duly and validly authorized and issued, are fully paid and non-assessable (except, in
the case of any foreign subsidiary, for directors’ qualifying shares and except as otherwise
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,)
and are owned directly or indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer or any other claim of any
third party (except as otherwise described in the Registration Statement, Pricing Disclosure
and the Prospectus).
(j) Due Authorization. The Company has full right, power and authority to execute and
deliver this Agreement and to perform its respective obligations hereunder; and all action
required to be taken for the due and proper authorization, execution and delivery by it of
this Agreement and the consummation by it of the transactions contemplated hereby has been
duly and validly taken.
(k) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The Shares. The Shares to be issued and sold by the Company hereunder have been
duly authorized and, when issued and delivered and paid for as provided herein, will be duly
and validly issued, will be fully paid and nonassessable and will conform to the
descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the
Prospectus; and the issuance of the Shares is not subject to any preemptive or similar
rights.
(m) No Violation or Default. Neither the Company nor any of its significant
subsidiaries within the meaning of Rule 1-02(w) of Regulation S-X (“Significant
Subsidiaries”) is (i) in violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its Significant Subsidiaries is
a party or by which the Company or any of its Significant Subsidiaries is bound or to which
any of the property or assets of the Company or any of its Significant Subsidiaries is
subject; or (iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority, except, in
the case of clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(n) No Conflicts. The execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Shares and the consummation of the transactions
contemplated by this Agreement will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other
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agreement or instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of the Company
or any of its subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach, violation or default that would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of each of this
Agreement, to which it is a party, the issuance and sale of the Shares and the consummation
of the transactions contemplated by this Agreement, except for the registration of the
Shares under the Securities Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required by the Financial Industry Regulatory
Authority, Inc. (“FINRA”) and the New York Stock Exchange and under applicable state
securities laws in connection with the purchase and distribution of the Shares by the
Underwriters.
(p) Legal Proceedings. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or any of its
Significant Subsidiaries is or may be a party or to which any property of the Company or any
of its Significant Subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its Significant Subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and no such investigations,
actions, suits or proceedings have been threatened or, to the knowledge of the Company,
contemplated by any governmental or regulatory authority or by others and (i) there are no
current or pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement, the Pricing
Disclosure Package or the Prospectus that are not so described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus and (ii) there are no statutes,
regulations or contracts or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement or described in the Registration Statement,
the Pricing Disclosure Package or the Prospectus that are not so filed as exhibits to the
Registration Statement or described in the Registration Statement, the Pricing Disclosure
Package or the Prospectus.
(q) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on
the other, that is required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described in such documents and in the
Pricing Disclosure Package.
(r) Independent Accountants. KPMG, who has reviewed certain financial statements of
the Company and its subsidiaries, and Ernst & Young LLP (“E&Y”), whose reports appear or are
incorporated by reference in the Registration Statement, is each an independent registered
public accounting firm with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public Company Accounting
Oversight Board (United States) and as required by the Securities Act.
PricewaterhouseCoopers (“PwC”), who has certified certain financial statements of PNA and
its consolidated subsidiaries, is an
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independent registered public accounting firm with respect to PNA and its subsidiaries
within the applicable rules and regulations adopted by the Commission and the Public Company
Accounting Oversight Board (United States) and as required by the Securities Act.
(s) Title to Real and Personal Property. The Company and its Significant Subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real and personal property that are material to the respective businesses
of the Company and its Significant Subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except those that (i) do not
materially interfere with the use made and proposed to be made of such property by the
Company and its Significant Subsidiaries or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(t) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (collectively, the “Investment Company
Act”).
(u) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its Significant Subsidiaries exists or, to the knowledge of the Company,
is contemplated or threatened, except as would not have a Material Adverse Effect.
(v) Compliance with and Liability under Environmental Laws. (i) Except as described in
the Pricing Disclosure Package or the Prospectus, the Company and its Significant
Subsidiaries (a) are, in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, requirements, decisions and orders relating to the
protection of human health or safety, the environment and natural resources or to hazardous
or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”), (b) have received and are in compliance with all permits, licenses, certificates or
other authorizations or approvals required of them under applicable Environmental Laws to
conduct their respective businesses, and (c) have not received notice of any actual or
potential liability under or relating to any Environmental Laws, including for the
investigation or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, and the Company has no knowledge of any event or
condition that would reasonably be expected to result in any such notice, and (ii) there are
no costs or liabilities associated with Environmental Laws of or relating to the Company or
its Significant Subsidiaries, except in the case of each of (i) and (ii) above, for any such
failure to comply, or failure to receive required permits, licenses or approvals, or cost or
liability would not, individually or in the aggregate, have a Material Adverse Effect; and
(iii) there are no proceedings that are pending, or that are known to the Company to be
contemplated, against the Company or any of its Significant Subsidiaries under any
Environmental Laws in which a governmental entity is also a party, other than such
proceedings regarding which it is reasonably believed no monetary sanctions of $1,000,000 or
more will be imposed.
(w) Disclosure Controls. The Company and its subsidiaries maintain an effective system
of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act)
that is designed to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Commission’s rules and forms,
including
9
controls and procedures designed to ensure that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely decisions regarding
required disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the
Exchange Act.
(x) Accounting Controls. The Company and its subsidiaries maintain systems of
“internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and principal financial
officers, or persons performing similar functions, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. The Company
maintains internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, there are no material
weaknesses in the Company’s internal controls.
(y) No Restrictions on Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s
properties or assets to the Company or any other subsidiary of the Company.
(z) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Shares.
(aa) No Registration Rights. Except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus and as will be waived on or prior to the
Closing Date, no person has the right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale of the Shares.
(bb) No Stabilization. The Company has not taken, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(cc) Margin Rules. The application of the proceeds received by the Company from the
issuance, sale and delivery of the Shares as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus will not violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of such Board of
Governors.
10
(dd) Status under the Securities Act. At the time of filing the Registration Statement
and any post-effective amendment thereto, at the earliest time thereafter that the Company
or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)
under the Securities Act) of the Shares and at the date hereof, the Company was not and is
not an “ineligible issuer,” and is a well known seasoned issuer, in each case as defined in
Rule 405 under the Securities Act. The Company has paid the registration fee for this
offering pursuant to Rule 456(b)(1) under the Securities Act or will pay such fee within the
time period required by such rule (without giving effect to the proviso therein) and in any
event prior to the Closing Date.
4. Further Agreements of the Company. The Company covenants and agrees with each
Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the
Securities Act, will file any Issuer Free Writing Prospectus to the extent required by Rule
433 under the Securities Act; will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Shares; and will furnish copies of the Prospectus and each
Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters
in New York City prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement in such quantities as the Representatives may
reasonably request. The Company will pay the registration fee for this offering within the
time period required by Rule 456(b)(1) under the Securities Act (without giving effect to
the proviso therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the
Representatives, three signed copies of the Registration Statement as originally filed and
each amendment thereto, in each case including all exhibits and consents filed therewith;
and (ii) during the Prospectus Delivery Period (as defined below), as many copies of the
Prospectus (including all amendments and supplements thereto and each Issuer Free Writing
Prospectus) as the Representatives may reasonably request. As used herein, the term
“Prospectus Delivery Period” means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a prospectus
relating to the Shares is required by law to be delivered (or required to be delivered but
for Rule 172 under the Securities Act) in connection with sales of the Shares by any
Underwriter or dealer, but no longer than nine months from the date hereof.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before preparing,
using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus,
and before filing any amendment or supplement to the Registration Statement or the
Prospectus, whether before or after the time that the Registration Statement becomes
effective, the Company will furnish to the Representatives and counsel for the Underwriters
a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review
and will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the Representatives
reasonably objects.
(d) Notice to the Representatives. The Company will advise the Representatives
promptly, and confirm such advice in writing, (i) when the Registration Statement has become
11
effective; (ii) when any amendment to the Registration Statement has been filed or
becomes effective; (iii) when any supplement to the Prospectus or any Issuer Free Writing
Prospectus or any amendment to the Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or the receipt of any comments from the Commission relating to the
Registration Statement or any other request by the Commission for any additional
information; (v) of the issuance by the Commission of any order suspending the effectiveness
of the Registration Statement or preventing or suspending the use of any Preliminary
Prospectus, any of the Pricing Disclosure Package or the Prospectus or the initiation or
threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities
Act; (vi) of the occurrence of any event within the Prospectus Delivery Period as a result
of which the Prospectus, the Pricing Disclosure Package or any Issuer Free Writing
Prospectus as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package
or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading;
(vii) of the receipt by the Company of any notice of objection of the Commission to the use
of the Registration Statement or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Securities Act; and (viii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose; and the
Company will use its reasonable best efforts to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement, preventing or suspending the use
of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or
suspending any such qualification of the Shares and, if any such order is issued, will use
their reasonable efforts to obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event
shall occur or condition shall exist as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or
(ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company
will immediately notify the Underwriters thereof and forthwith prepare and, subject to
paragraph (c) above, file with the Commission and furnish to the Underwriters and to such
dealers as the Representatives may designate such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will comply with law and
(2) if at any time prior to the Closing Date (i) any event shall occur or condition shall
exist as a result of which the Pricing Disclosure Package as then amended or supplemented
would include any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances
existing when the Pricing Disclosure Package is delivered to a purchaser, not misleading or
(ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with
law, the Company will immediately notify the Underwriters thereof and forthwith prepare and,
subject to paragraph (c) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representatives may designate such
amendments or supplements to the Pricing Disclosure Package as may be necessary so that the
statements in the Pricing Disclosure Package as so amended or supplemented will not, in the
light of the circumstances existing when the Pricing Disclosure Package is delivered to a
purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.
12
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and will continue such qualifications in effect so long as required for
distribution of the Shares; provided that the Company shall not be required to (i)
qualify as a foreign corporation or other entity or as a dealer in securities in any such
jurisdiction where it would not otherwise be required to so qualify, (ii) file any general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any such jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its security
holders and the Representatives as soon as practicable an earning statement that satisfies
the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158)
of the Registration Statement.
(h) Clear Market. For a period of 90 days after the date of the Prospectus, the
Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock
or such other securities, in cash or otherwise, without the prior written consent of the
Representatives, other than (a) the Shares to be sold hereunder, (b) any shares of Stock of
the Company issued upon the exercise of options granted under Company Stock Plans and (c)
the entry into by the Company of any agreement or the announcement by the Company of any
intention to merge with or acquire the capital stock or assets of a third party using shares
of Stock, securities convertible into or exercisable or exchangeable for Stock, or options,
rights or warrants to purchase shares of Stock or securities convertible into or exercisable
or exchangeable for Stock as full or partial consideration for such merger or acquisition
having an aggregate value (based on the product of the number of shares to be issued or that
are issuable in such transaction and the closing stock price on the date prior to
announcement of such transaction), measured at the time of announcement of $250.0 million or
less.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Shares as described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus under the heading “Use of Proceeds”.
(j) No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Stock.
(k) Exchange Listing. The Company will use its reasonable best efforts to list,
subject to notice of issuance, the Shares on the New York Stock Exchange (the “Exchange”).
(l) Reports. So long as the Shares are outstanding, the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Shares, and copies of any
reports and financial statements furnished to or filed with the Commission or any national
securities exchange or automatic quotation system; provided the Company will be
deemed to have furnished such
13
reports and financial statements to the Representatives to the extent they are filed on
the Commission’s Electronic Data Gathering, Analysis, and Retrieval system.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in
good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and
agrees that:
(a) It has not used or authorized use of, and will not use, authorize use of, refer to
or participate in the planning for use of, any “free writing prospectus”, as defined in Rule
405 under the Securities Act (which term includes use of any written information furnished
to the Commission by the Company and not incorporated by reference into the Registration
Statement and any press release issued by the Company) other than (i) a free writing
prospectus that contains no “issuer information” (as defined in Rule 433(h)(2) under the
Securities Act) that was not included (including through incorporation by reference) in the
Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer
Free Writing Prospectus listed on Annex B or prepared pursuant to Section 3(c) or Section
4(c) above (including any electronic road show), or (iii) any free writing prospectus
prepared by such Underwriter and approved by the Company in advance in writing (each such
free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing
Prospectus”).
(b) It has not used or authorized use of, and will not use, without the prior written
consent of the Company, any free writing prospectus that contains the final terms of the
Shares unless such terms have previously been included in a free writing prospectus filed
with the Commission; provided that Underwriters may use a term sheet substantially in the
form of Annex C hereto without the consent of the Company; provided further that any
Underwriter using such term sheet shall notify the Company, and provide a copy of such term
sheet to the Company, prior to, or substantially concurrently with, the first use of such
term sheet.
6. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceeding for such purpose, pursuant
to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before
or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus
shall have been timely filed with the Commission under the Securities Act (in the case of an
Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act)
and in accordance with Section 4(a) hereof; and all requests by the Commission for
additional information shall have been complied with.
(b) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing
Date or the Additional Closing Date, as the case may be; and the statements of the Company
and its officers made in any certificates delivered pursuant to this Agreement shall be true
and correct on and as of the Closing Date or the Additional Closing Date, as the case may
be.
14
(c) No Downgrade. Subsequent to the execution and delivery of this Agreement,(i) no
downgrading shall have occurred in the rating accorded any such debt securities or preferred
stock of, or guaranteed by, the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization,” as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, or has changed its outlook
with respect to, its rating of any such debt securities or preferred stock (other than an
announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section
3(g) hereof shall have occurred or shall exist, which event or condition is not described in
the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the
Prospectus (excluding any amendment or supplement thereto) and the effect of which in the
judgment of the Representatives make it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date,
as the case may be, on the terms and in the manner contemplated by this Agreement, the
Pricing Disclosure Package and the Prospectus.
(e) Officers’ Certificate. The Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a certificate of one
executive officer of the Company and one additional executive officer of the Company who has
specific knowledge of the Company’s financial matters and who are reasonably satisfactory to
the Representatives (i) confirming that such officers have carefully reviewed the
Registration Statement, the Pricing Disclosure Package and the Prospectus and, to the
knowledge of such officers, the representations set forth in Sections 3(b) and 3(d) hereof
are true and correct, (ii) confirming that the other representations and warranties of the
Company in this Agreement are true and correct and that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date or the Additional Closing Date, as the case may be, and
(iii) to the effect set forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, KPMG, E&Y and PricewaterhouseCoopers LLC shall
have furnished to the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus; provided, that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a “cut-off” date no more than three
business days prior to such Closing Date or such Additional Closing Date, as the case may
be.
(g) Opinion and 10b-5 Statement of Counsel for the Company. ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel for the Company, shall have furnished to the Representatives, at the request
of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, to the effect set forth in Annex A
hereto.
15
(h) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives
shall have received on and as of the Closing Date or the Additional Closing Date, as the
case may be, an opinion and 10b-5 statement of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for
the Underwriters, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state
or foreign governmental or regulatory authority that would, as of the Closing Date or the
Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares; and
no injunction or order of any federal, state or foreign court shall have been issued that
would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent
the issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on the Closing Date or the
Additional Closing Date, as the case may be, reasonably satisfactory evidence of the good
standing of the Company and its Significant Subsidiaries in their respective jurisdictions
of organization and their good standing as foreign entities in such other jurisdictions in
the United States as the Representatives may reasonably request, in each case in writing or
any standard form of telecommunication from the appropriate governmental authorities of such
jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
(l) Lock-up
Agreements. The “lock-up” agreements, each substantially in the form of
Exhibit A hereto, between you, and the executive officers and directors of the Company and
the trustee of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust relating to sales and
certain other dispositions of shares of Stock or certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date or Additional Closing Date, as the case
may be, except as specifically provided therein.
(m) Additional Documents. On or prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities (including, without
limitation, reasonable and documented legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in
16
the Registration Statement or caused by any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, not misleading, (ii) or any untrue
statement or alleged untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed pursuant to Rule 433(d) under the Securities Act or any Pricing
Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended),
or caused by any omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading, in each case except insofar as such losses, claims, damages or liabilities arise out
of, or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in subsection (b) below.
(b) Indemnification of the Company. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its affiliates, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the
indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating
to such Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus (or any amendment
or supplement thereto), any Issuer Free Writing Prospectus or any Pricing Disclosure Package, it
being understood and agreed that the only such information furnished by any Underwriter consists of
the information in the Prospectus furnished on behalf of each Underwriter contained in the third,
seventh, twelfth, thirteenth and fourteenth paragraphs under the caption “Underwriting”.
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under paragraph (a) or (b) above except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b)
above. If any such proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the
Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and
any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such proceeding and shall pay
the reasonable and documented fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including
17
any impleaded parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that the Indemnifying
Person shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates,
directors and officers and any control persons of such Underwriter shall be designated in writing
by the Representatives, and any such separate firm for the Company, its affiliates, its directors,
its officers who signed the Registration Statement and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or
could have been a party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in
form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (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, from the offering of the Shares or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) 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 or liabilities, as well as any other
relevant equitable 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 respective proportions as the
net proceeds (before deducting expenses) received by the Company from the sale of the Shares and
the total underwriting discounts and commissions received by the Underwriters in connection
therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate offering price of the Shares. The relative fault of the Company, on the one hand, and
the Underwriters on the other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any reasonable and documented legal
or other expenses incurred by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be
18
required to contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter with respect to the offering of the Shares
exceeds the amount of any damages that 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 Securities 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 7 are
several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company, if after the execution and delivery of this Agreement
and prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing
Date (i) trading generally shall have been suspended or materially limited on or by any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market, the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of
the Company’s common stock shall have been suspended on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis, either within or outside the United
States, that, in the judgment of the Representatives, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
9. Defaulting Underwriter.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase
hereunder the non-defaulting Underwriters may in their discretion arrange for the purchase of such
Shares by other persons satisfactory to the Company on the terms contained in this Agreement. If,
within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not
arrange for the purchase of such Shares, then the Company shall be entitled to a further period of
36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or agree to purchase the
Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company may
postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full
business days in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or
in any other document or arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any such changes. As used
in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this
Section 9, purchases Shares that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the
19
Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to
purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of
Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of
Shares to be purchased on such date, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the
obligation of the Underwriters to purchase Shares on the Additional Closing Date shall terminate
without liability on the part of the non-defaulting Underwriters. Any termination of this
Agreement pursuant to this Section 9 shall be without liability on the part of the Company, except
that the Company will continue to be liable for the payment of expenses as set forth in Section 10
hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in
effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
10. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident
to the performance of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes
payable in that connection; (ii) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free
Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing
and distributing each of this Agreement and the “lock-up” agreements; (iv) the fees and expenses of
the Company’s counsel and independent accountants; (v) the fees and expenses incurred in connection
with the registration or qualification and determination of eligibility for investment of the
Shares under the laws of such jurisdictions as the Representatives may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriters; provided that such fees shall not exceed $10,000); (vi)
the cost of preparing stock certificates; (vii) the costs and charges of any transfer agent and any
registrar; (viii) all expenses and application fees incurred in connection with any filing with,
and clearance of the offering by, FINRA; (ix) all expenses incurred by the Company in connection
with any “road show” presentation to potential investors and (x) all expenses and application fees
related to the listing of the Shares on the Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 8(ii), (ii) the Company for any
reason fails to tender the Shares for delivery to the Underwriters or (iii) the Underwriters
decline to purchase the Shares for any other reason permitted under this Agreement, the Company
agrees to reimburse the Underwriters for all reasonable and documented out-of-pocket costs and
expenses (including the reasonable and documented fees and expenses of their counsel) reasonably
incurred by the Underwriters in connection with this Agreement and the offering contemplated
hereby.
20
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
12. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriters contained in this Agreement or made
by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any investigation made
by or on behalf of the Company or the Underwriters.
13. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule
405 under the Securities Act ; and (d) the term “significant subsidiary” has the meaning set forth
in Rule 1-02 of Regulation S-X under the Exchange Act.
14. Miscellaneous.
(a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken
by the Representatives on behalf of the Underwriters, and any such action taken by the
Representatives shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention Equity Syndicate Desk; UBS
Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention
Equity Capital Markets Syndication Desk; Banc of America Securities LLC, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇) Attention Equity Syndicate Desk. Notices to the Company shall be given
to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (fax: (▇▇▇) ▇▇▇-▇▇▇▇);
Attention: General Counsel.
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
21
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, RELIANCE STEEL & ALUMINUM CO. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted:
___, 2008
For themselves and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
several Underwriters listed
in Schedule 1 hereto.
| ▇.▇. ▇▇▇▇▇▇ SECURITIES INC. |
||||
| By: | ||||
| Authorized Signatory | ||||
| UBS SECURITIES LLC |
||||
| By: | ||||
| Authorized Signatory | ||||
| By: | ||||
| Authorized Signatory | ||||
| BANC OF AMERICA SECURITIES LLC |
||||
| By: | ||||
| Authorized Signatory | ||||
Schedule 1
| Underwriter | Number of Underwritten Shares | |||
▇.▇. ▇▇▇▇▇▇ Securities Inc. |
||||
UBS Securities LLC |
||||
Banc of America Securities LLC |
||||
Citigroup
Global Markets Inc. |
||||
KeyBanc
Capital Markets Inc. |
||||
Wachovia
Capital Markets, Inc. |
||||
▇▇▇▇▇ Fargo
Securities, LLC |
||||
Total |
||||
Schedule 2
LIST OF SUBSIDIARIES
Allegheny Steel Distributors, Inc., a Pennsylvania corporation
Aluminum and Stainless, Inc., a Louisiana corporation
American Metals Corporation, a California corporation
American Steel, L.L.C., an Oregon limited liability company
AMI Metals, Inc., a Tennessee corporation
AMI Metals Europe SPRL, a Belgian corporation
CCC Steel, Inc., a Delaware corporation
Chapel Steel Corp., a Pennsylvania corporation
Chatham Steel Corporation, a Georgia corporation
▇▇▇▇▇▇▇ Metals, Inc., an Illinois corporation
Crest Steel Corporation, a California corporation
Dynamic Metals International LLC, a Connecticut limited liability company
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Steel Co., Inc., a California corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Company, a Delaware corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (Canada) Inc., a corporation formed under the laws of Ontario, Canada
Encore Group Limited, a corporation formed under the laws of Alberta, Canada
Encore Metals (USA) Inc., a Washington corporation
Everest Metals (Suzhou) Co., Ltd., a corporation formed under the laws of the Peoples Republic of China
Liebovich Bros., Inc., an Illinois corporation
LBT, Inc., an Illinois corporation
▇▇▇▇ Metals, a California corporation
Metalweb Limited, a corporation formed under the laws of the United Kingdom
Pacific Metal Company, an Oregon corporation
PDM Steel Service Centers, Inc., a California corporation
Phoenix Corporation, a Georgia corporation
Precision Strip, Inc., an Ohio corporation
Precision Strip Transport, Inc., an Ohio corporation
Precision Strip Mexico Holdings, Inc., an Ohio corporation
Precision Strip de Mexico, S. de ▇.▇. de C.V., a Nuevo ▇▇▇▇, Mexico corporation
Reliance Pan Pacific Pte., Ltd., a Singapore corporation
RSAC Management Corp., a California corporation
Service Steel Aerospace Corp., a Delaware corporation
Siskin Steel & Supply Company, Inc., a Tennessee corporation
Team Tube Canada ULC, a corporation formed under the laws of Alberta, Canada
Toma Metals, Inc., a Pennsylvania corporation
Valex Corp., a California corporation
Valex Korea Co., Ltd., a corporation formed under the laws of the Republic of South Korea
Valex Holdings Limited, a corporation formed under the laws of Hong Kong
Valex China Co., Ltd., a corporation formed under the laws of the Peoples Republic of China
Viking Materials, Inc., a Minnesota corporation
▇▇▇▇▇ Metals Inc., a Connecticut corporation
Aluminum and Stainless, Inc., a Louisiana corporation
American Metals Corporation, a California corporation
American Steel, L.L.C., an Oregon limited liability company
AMI Metals, Inc., a Tennessee corporation
AMI Metals Europe SPRL, a Belgian corporation
CCC Steel, Inc., a Delaware corporation
Chapel Steel Corp., a Pennsylvania corporation
Chatham Steel Corporation, a Georgia corporation
▇▇▇▇▇▇▇ Metals, Inc., an Illinois corporation
Crest Steel Corporation, a California corporation
Dynamic Metals International LLC, a Connecticut limited liability company
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Steel Co., Inc., a California corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Company, a Delaware corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (Canada) Inc., a corporation formed under the laws of Ontario, Canada
Encore Group Limited, a corporation formed under the laws of Alberta, Canada
Encore Metals (USA) Inc., a Washington corporation
Everest Metals (Suzhou) Co., Ltd., a corporation formed under the laws of the Peoples Republic of China
Liebovich Bros., Inc., an Illinois corporation
LBT, Inc., an Illinois corporation
▇▇▇▇ Metals, a California corporation
Metalweb Limited, a corporation formed under the laws of the United Kingdom
Pacific Metal Company, an Oregon corporation
PDM Steel Service Centers, Inc., a California corporation
Phoenix Corporation, a Georgia corporation
Precision Strip, Inc., an Ohio corporation
Precision Strip Transport, Inc., an Ohio corporation
Precision Strip Mexico Holdings, Inc., an Ohio corporation
Precision Strip de Mexico, S. de ▇.▇. de C.V., a Nuevo ▇▇▇▇, Mexico corporation
Reliance Pan Pacific Pte., Ltd., a Singapore corporation
RSAC Management Corp., a California corporation
Service Steel Aerospace Corp., a Delaware corporation
Siskin Steel & Supply Company, Inc., a Tennessee corporation
Team Tube Canada ULC, a corporation formed under the laws of Alberta, Canada
Toma Metals, Inc., a Pennsylvania corporation
Valex Corp., a California corporation
Valex Korea Co., Ltd., a corporation formed under the laws of the Republic of South Korea
Valex Holdings Limited, a corporation formed under the laws of Hong Kong
Valex China Co., Ltd., a corporation formed under the laws of the Peoples Republic of China
Viking Materials, Inc., a Minnesota corporation
▇▇▇▇▇ Metals Inc., a Connecticut corporation