5,234,616
HYDRIL COMPANY
COMMON STOCK, PAR VALUE $.50 PER SHARE
UNDERWRITING AGREEMENT
----------------------
May ___, 2001
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ & Company International,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
1. Introductory. The stockholders listed in Schedule A hereto ("SELLING
STOCKHOLDERS") propose severally to sell an aggregate of 4,551,840 outstanding
shares ("FIRM SECURITIES") of the common stock, par value $.50 per share
("SECURITIES") of Hydril Company, a Delaware corporation ("COMPANY"), and also
propose to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 682,776 additional outstanding shares ("OPTIONAL
SECURITIES") of the Company's Securities as set forth below. The Firm Securities
and the Optional Securities are herein collectively called the "OFFERED
SECURITIES". The Company and the Selling Stockholders hereby agree with the
several Underwriters named in Schedule B hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-59748) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("COMMISSION") and either (A) has been
declared effective under the Securities Act of 1933 ("ACT") and is not
proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "INITIAL
REGISTRATION STATEMENT") has been declared effective, either (A) an
additional registration statement (the "ADDITIONAL REGISTRATION STATEMENT")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("RULE 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (B) such an additional registration statement may
be proposed to be filed with the Commission pursuant to Rule 462(b) and
will become effective upon filing pursuant to such Rule and upon such
filing the Offered Securities will all have been duly registered under the
Act pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("RULE 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "EFFECTIVE TIME" with respect to the initial
registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised the Representatives that it
does not propose to amend such registration statement, the date and time as
of which such registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company has
advised the Representatives that it proposes to file an amendment or post-
effective amendment to such registration statement, the date and time as of
which such registration statement, as amended by such amendment or post-
effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed
prior to the execution and delivery of this Agreement but the Company has
advised the Representatives that it proposes to file one, "EFFECTIVE TIME"
with respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "EFFECTIVE DATE" with respect to the initial
registration statement or the additional registration statement (if any)
means the date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed to
be a part of the initial registration statement as of the Effective Time of
the additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if any)
deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("RULE 430A(b)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement incorporated
by reference therein and including all information (if any) deemed to be a
part of the additional registration statement as of its Effective Time
pursuant to Rule 430A(b), is hereinafter referred to as the "ADDITIONAL
REGISTRATION STATEMENT". The Initial Registration Statement and the
Additional Registration Statement are hereinafter referred to collectively
as the "REGISTRATION STATEMENTS" and individually as a "REGISTRATION
STATEMENT". The form of prospectus relating to the Offered Securities, as
first filed with the Commission pursuant to and in accordance with Rule
424(b) ("RULE 424(b)") under the Act or (if no such filing is required) as
included in a Registration Statement, is hereinafter referred to as the
"PROSPECTUS". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission ("RULES AND REGULATIONS")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all material respects to the requirements of
the Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or will
not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on the
date of this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective
Date of the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform, in
all material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The
two preceding sentences do not apply to statements in or
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omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in Section
7(c) hereof.
(iii) Exhibit 21.1 to the Registration Statement sets forth the name
and jurisdiction of organization of all of the subsidiaries of the Company
excluding certain subsidiaries of the Company none of which, when combined
with all other such subsidiaries so excluded, would constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X. Each
of the Company and its Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, business,
properties or results of operations of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business (a "MATERIAL ADVERSE EFFECT");
(iv) All the outstanding shares of capital stock of each subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest or any other security interests, claims,
liens or encumbrances;
(v) The Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock (including the Offered Securities being
sold hereunder by the Selling Stockholders) have been duly and validly
authorized and are, or with respect to the Offered Securities, as of the
applicable Closing Date, will be, validly issued, fully paid and
nonassessable; the certificates for the Offered Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Offered Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding.
(vi) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings
"Description of Capital Stock," "Business-Regulation," "Risk Factors-
Limitations on our ability to protect our intellectual property rights
could cause a loss in revenues and any competitive advantage we hold, -
Environmental compliance costs and liabilities could have a material
adverse effect on our financial condition, - Provisions of our charter,
bylaws and our note agreement may discourage acquisition bids and cause our
common stock to trade at a discount to where it otherwise may trade, and -
Future sales of our common stock could adversely affect its market price,"
insofar as such statements summarize legal matters, agreements, documents,
or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(vii) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms.
(viii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
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(ix) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Offered Securities by the Underwriters in the manner contemplated herein
and in the Prospectus.
(x) Neither the sale of the Offered Securities nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, (A) the charter or
by-laws of the Company or any of its subsidiaries, (B) the terms of any
material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is a
party or bound or to which its or their property is subject, or (C) any
statute, law, rule, regulation, judgment, order or decree applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of
its or their properties.
(xi) Except for the rights of the Selling Stockholders to sell the
Offered Securities set forth in Schedule A, no holders of securities of the
Company have rights to the registration of such securities under the
Registration Statement that have not been validly waived.
(xii) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Selected
Financial Information" in the Prospectus and Registration Statement fairly
present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein.
(xiii) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (A) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (B) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus.
(xiv) Except as would not have, individually or in the aggregate, a
Material Adverse Effect, each of the Company and each of its subsidiaries
owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(xv) Neither the Company nor any subsidiary is in violation or default
of (A) any provision of its charter or bylaws, (B) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or (C)
any statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable, except where, in the case of clauses
(B) and (C) above, such violation or default could not reasonably be
expected to have a Material Adverse Effect.
(xvi) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with
4
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(xvii) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof, except in any case in which the failure so to file would not have
a Material Adverse Effect, except as set forth in or contemplated in the
Prospectus, and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not
have a Material Adverse Effect, except as set forth in or contemplated in
the Prospectus.
(xviii) No labor problem or dispute with the employees of the Company
or any of its subsidiaries exists or, to the Company's knowledge, is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its
subsidiaries' principal suppliers, contractors or customers, that could
have a Material Adverse Effect, except as set forth in or contemplated in
the Prospectus.
(xix) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are reasonably prudent and customary in the
businesses in which they are engaged; all policies of insurance and any
fidelity or surety bonds insuring the Company or any of its subsidiaries or
their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or any of its subsidiaries
under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause;
neither the Company nor any such subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any such
subsidiary has any 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 cost that would not have a Material Adverse Effect, except as
set forth in or contemplated in the Prospectus.
(xx) No subsidiary of the Company is currently prohibited, directly or
indirectly, 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 property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus.
(xxi) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus.
(xxii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of consolidated financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxiii) The Company has not taken, directly or indirectly, any action
that has constituted or that was designed to or might reasonably be
expected to cause or result in, under the Securities Exchange Act
5
of 1934, as amended ("EXCHANGE ACT") or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Offered Securities.
(xxiv) The Company and its subsidiaries (A) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (B) have received and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (C) except as set forth in or contemplated in the Prospectus, have not
received notice of any actual or potential liability for the investigation
or remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
Material Adverse Effect. Except as set forth in the Prospectus, neither
the Company nor any of its subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(xxv) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus.
(xxvi) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. The
Company and its subsidiaries have not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
(xxvii) Hydril Private Limited and Hydril, S.A. de C.V. are the only
significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (the "SIGNIFICANT SUBSIDIARIES").
(xxviii) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "INTELLECTUAL PROPERTY") necessary for the conduct of
the Company's business as now conducted or as proposed in the Prospectus to
be conducted. Except as set forth in the Prospectus, (A) to the Company's
knowledge, there are no rights of third parties to any such Intellectual
Property; (B) to the Company's knowledge, there is no material infringement
by third parties of any such Intellectual Property; (C) there is no pending
or, to the Company's best knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (D) there is no pending or, to
the Company's best knowledge, threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (E) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable basis
for any such
6
claim; (F) there is no U.S. patent or published U.S. patent application
which contains claims that dominate or may dominate any Intellectual
Property described in the Prospectus as being owned by or licensed to the
Company or that interferes with the issued or pending claims of any such
Intellectual Property; and (G) there is no prior art of which the Company
is aware that may render any U.S. patent held by the Company invalid or any
U.S. patent application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office.
(xxix) The statements contained in the Prospectus under the captions
"Risk Factors -- Risks Relating to Our Business -- Limitations on our
ability to protect our intellectual property rights could cause a loss in
revenues and any competitive advantage we hold" and "Business -- Our
Emphasis on Research and Development" as well as other references in the
Prospectus to patent and licensing matters, insofar as such statements
summarize legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(xxx) The Company has duly inquired as to the NASD membership or
affiliation of each of the Selling Stockholders and, other than as
expressly communicated to the Representatives or their counsel, no such
NASD membership or affiliation exists.
(xxxi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.
(xxxii) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated
by the Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Offered Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(b) Each Selling Stockholder, (other than Booth & Co. with respect to
paragraph (b)(v) of this Section 2) severally and not jointly represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder is the record and beneficial owner of the
Offered Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims, other than pursuant to the Custody
Agreement and Power of Attorney dated April 2001 by and among ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, O'Melveny & ▇▇▇▇▇ LLP, and the Selling Stockholders (the
"Custody Agreement"), and, assuming that each Underwriter acquires its
interest in the Offered Securities it has purchased from such Selling
Stockholder without notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code ("UCC")), each
Underwriter that has purchased such Offered Securities delivered on the
Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that has
had such Offered Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust Company or such
other securities intermediary will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such Offered
Securities purchased by such Underwriter, and no action based on an adverse
claim (within the meaning of Section 8-105 of the UCC) may be asserted
against such Underwriter with respect to such Offered Securities.
(ii) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or
7
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Offered Securities.
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except such as
may have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Offered Securities by the Underwriters and such other
approvals as have been obtained.
(iv) Neither the sale of the Offered Securities being sold by such
Selling Stockholder nor the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of the
terms hereof by such Selling Stockholder will conflict with, result in a
breach or violation of, or constitute a default under any law or, as
applicable, the charter or by-laws of such Selling Stockholder or the terms
of any indenture or other agreement or instrument to which such Selling
Stockholder or, as applicable, any of its subsidiaries is a party or bound,
except where such conflict with, breach or violation of, or default under
such indenture or other agreement or instrument does not have a materially
adverse effect on the sale of the Offered Securities being sold by such
Selling Stockholder, the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of the
terms hereof by such Selling Stockholder, or any judgment, order or decree
applicable to such Selling Stockholder or, as applicable, any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder or, as applicable, any of its subsidiaries.
(v) Such Selling Stockholder is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Prospectus or any supplement thereto which
has adversely affected or may adversely affect the business of the Company
or any of its Significant Subsidiaries; and the sale of Offered Securities
by such Selling Stockholder pursuant hereto is not prompted by any
information concerning the Company or any of its Significant Subsidiaries
which is not set forth in the Prospectus or any supplement thereto.
(vi) In respect of any statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by such
Selling Stockholder specifically for use in connection with the preparation
thereof, such Selling Stockholder hereby makes the same representations and
warranties to each Underwriter as the Company makes to such Underwriter
under paragraph (a)(ii) of this Section.
(vii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment.
Any certificate signed by, or on behalf of, any Selling Stockholder or any
officer thereof and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, each Selling Stockholder agrees,
severally and not jointly, to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder, at
a purchase price of $ per share, that number of Firm Securities
(rounded up or down, as determined by Credit Suisse First Boston Corporation
("CSFBC") in its discretion, in order to avoid fractions) obtained by
multiplying the number of Firm Securities set forth opposite the name of such
Selling Stockholder in Schedule A hereto by a fraction the numerator of which is
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule B hereto and the denominator of which is the total number of Firm
Securities.
8
Certificates in negotiable form for the Class B Common Stock convertible
into the Offered Securities have been placed in custody, for delivery under this
Agreement, under the Custody Agreement made with O'Melveny & ▇▇▇▇▇ LLP, as
custodian ("CUSTODIAN"). Each Selling Stockholder agrees that the shares
represented by the certificates held in custody for such Selling Stockholder
under such Custody Agreement are subject to the interests of the Underwriters
hereunder, that the arrangements made by such Selling Stockholder for such
custody are to that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law, whether by
the death of any individual Selling Stockholder or the occurrence of any other
event, or in the case of a trust, by the death of any trustee or trustees or the
termination of such trust. Each Selling Stockholder agrees that if such Selling
Stockholder is an individual and should die, or if a trust and such trust's
trustee or trustees should die, or if any other such event should occur, or if
such trust should terminate, before the delivery of the Offered Securities
hereunder, certificates for the Offered Securities being sold by such Selling
Stockholder shall be caused to be delivered by the Custodian in accordance with
the terms and conditions of this Agreement as if such death or other event or
termination had not occurred, regardless of whether or not the Custodian shall
have received notice of such death or other event or termination.
The Attorneys-in-Fact pursuant to the Custody Agreement shall instruct the
Custodian to, and upon such instructions the Custodian shall, cause to be
delivered the Firm Securities to the Representatives for the accounts of the
Underwriters at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, against payment of the purchase price in Federal (same
day) funds by official bank check or checks or wire transfer to an account at a
bank or banks specified by the Selling Stockholders and reasonably acceptable to
CSFBC drawn to the order of each Selling Stockholder, as applicable, at the
office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. at 10:00 A.M., New York time, on ,
or at such other time not later than seven full business days thereafter as
CSFBC and the Attorneys-in-Fact determine, such time being herein referred to as
the "FIRST CLOSING DATE". The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the office of ChaseMellon Shareholder Services at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities. The Selling Stockholders agree, severally and not jointly, to
sell to the Underwriters the respective numbers of Optional Securities obtained
by multiplying the number of Optional Securities specified in such notice by a
fraction the numerator of which is the number of shares set forth opposite the
names of such Selling Stockholders in Schedule A hereto under the caption
"Number of Optional Securities to be Sold" and the denominator of which is the
total number of Optional Securities (subject to adjustment by CSFBC to eliminate
fractions). Such Optional Securities shall be purchased from each Selling
Stockholder for the account of each Underwriter in the same proportion as the
number of Firm Securities set forth opposite such Underwriter's name bears to
the total number of Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time within such 30 day period and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Attorneys-in-Fact
pursuant to the Custody Agreement shall instruct the Custodian to, and upon such
instructions the Custodian shall, cause to be delivered the Optional Securities
being purchased on each Optional Closing Date to the Representatives for the
accounts of the several Underwriters at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, against payment of the purchase
price in Federal (same day) funds by official bank check or checks or wire
transfer to an account at a bank or banks specified by the Selling Stockholders
and reasonably acceptable to CSFBC drawn to the order of each Selling
Stockholder, as applicable, at the above office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
9
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the office
of ChaseMellon Shareholder Services at a reasonable time in advance of such
Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. (a)
The Company agrees with the several Underwriters and the Selling Stockholders
that:
(i) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(ii) The Company will advise CSFBC promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed
or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(iii) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(iv) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
10
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(v) The Company will furnish to the Representatives copies of each
Registration Statement, five of which will be signed and will include all
exhibits, each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the
Act in connection with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in each case in such
quantities as CSFBC requests. The Prospectus shall be so furnished on or
prior to 3:00 P.M., New York time, on the business day following the later
of the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other such documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(vi) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution.
(vii) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as CSFBC may reasonably request.
(viii) For a period of 90 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating
to, any additional shares of its Securities or securities convertible into
or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC, except
grants of employee or director stock options pursuant to the terms of a
plan in effect on the date hereof, issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof.
(ix) The Company will pay all expenses incident to the performance of
the obligations of the Selling Stockholders and the obligations of the
Company under this Agreement, for any filing fees and other expenses
(including fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions as CSFBC designates and the printing of memoranda relating
thereto, for the filing fee incident to the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for any
travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings
with prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters,
provided, however, that the Selling Stockholders agree to pay their
proportionate share of the underwriting discount or commission, any stamp
or transfer taxes applicable to their Offered Securities and the fees and
expenses of counsel (other than one counsel retained on behalf of the
Selling Stockholders by the Company at its expense), accountants and tax
advisors retained by such Selling Stockholders.
(b) Each Selling Stockholder agrees with the several Underwriters and the
Company that each Selling Stockholder has validly executed and delivered to the
Underwriters or contemporaneously with the execution of this Agreement shall
validly execute and deliver to the Underwriters a lock-up agreement in the form
attached hereto as Annex A.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
11
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder, including the obligations of the
Selling Stockholders under Section 5(b)[(ii)], and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of Deloitte & Touch LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements
for them to be in conformity with generally accepted accounting
principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of such letter, there was any
change in the capital stock or any increase in short-term indebtedness
or long-term debt of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net current assets
or net assets, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(C) for the period from the closing date of the latest statement
of operations included in the Prospectus to the closing date of the
latest available statement of operations read by such accountants
there were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length ended
the date of the latest statement of operations included in the
Prospectus, in consolidated net sales or net operating income in the
total or per share amounts of consolidated net income;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained
in the Registration Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting
12
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such letter
and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement and the Additional Registration Statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "PROSPECTUS" shall mean the
prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFBC. If the
Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have
occurred not later that 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of any Selling Stockholder, the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there shall
not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and payment for
the Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or The Nasdaq
National Market, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Representatives shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction in which
it is chartered or organized, with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
Texas, Louisiana, California, Alaska and Wyoming;
13
(ii) All outstanding shares of capital stock of the subsidiaries
listed on Exhibit 21.1 to the Registration Statement are owned by the
Company either directly or through wholly owned subsidiaries, except as set
forth on Exhibit 21.1, free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any other
security interest, claim, lien or encumbrance, except as set forth in Annex
B;
(iii) (A) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms as to
legal matters in all material respects to the description thereof contained
in the Prospectus; and (B) the outstanding shares of Common Stock
(including the Offered Securities being sold hereunder by the Selling
Stockholders) have been duly and validly authorized and issued and are
fully paid and nonassessable; the Offered Securities have been duly
authorized for trading on the Nasdaq National Market; the certificates for
the Offered Securities are in valid and sufficient form; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or, to the knowledge of such counsel after due inquiry, other
rights to subscribe for the Offered Securities; and, to the knowledge of
such counsel after due inquiry, except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
(iv) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no franchise, contract
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required; and the statements in the
Prospectus under the headings "Business-Regulation", "Risk Factors -
Limitations on our ability to protect our intellectual property rights
could cause a loss in revenues and any competitive advantage we hold, -
Environmental compliance costs and liabilities could have a material
adverse effect on our financial condition, - Provisions of our charter,
bylaws and our note agreement may discourage acquisition bids and cause our
common stock to trade at a discount to where it otherwise may trade, and -
Future sales of our common stock could adversely affect its market price,"
insofar as such statements summarize legal matters, agreements, documents,
or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings;
(v) The Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required
by Rule 424(b); to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the rules
thereunder;
(vi) This Agreement has been duly authorized, executed and delivered
by the Company;
(vii) The Company is not and, after giving effect to the offering and
sale of the Offered Securities will not be, an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(viii) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Offered Securities by the Underwriters in the manner contemplated in this
Agreement and in the Prospectus and such other approvals (specified in such
opinion) as have been obtained;
14
(ix) Neither the sale of the Offered Securities, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to, (A) the charter or by-laws of the Company, (B)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which
its property is subject and which is listed on Annex C, or (C) any statute,
law, rule, regulation, judgment, order or decree applicable to the Company
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its properties; and
(x) Except for the rights of the Selling Stockholders to sell the
Offered Securities set forth in Schedule A, to the knowledge of such
counsel after due inquiry, no holders of securities of the Company have
rights to the registration of such securities under the Registration
Statement.
In addition, such counsel shall state that in connection with the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in various discussions and meetings with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy and completeness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraph
(iii)(A) and (iv) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes it to believe that the Registration
Statement (other than the (i) financial statements and related schedules
contained therein or omitted therefrom (including the notes to the financial
statements and auditors' reports on the financial statements) and (ii) the other
financial information contained therein or omitted therefrom) at the time such
Registration Statement became effective or was last deemed amended contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (other than (i) the financial statements and related
schedules contained therein or omitted therefrom (including the notes to the
financial statements and the auditors' reports on the financial statements) and
(ii) the other financial information contained therein or omitted therefrom, as
to which such counsel need not express an opinion) at the date of such
Prospectus and on the applicable Closing Date contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Company and public officials and (B) limit their opinion to the Delaware General
Corporation Law, the general contract law of the State of New York, the laws of
the United States of America and the laws of the State of Texas, in each case as
in effect on the date of such opinion.
(e) The Representatives shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ & Bok, foreign counsel for the Company, to the
effect that:
(i) Hydril Private Limited has been duly incorporated and is validly
existing as a company under the Singapore Companies Act Cap. 50, with full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a Singapore
incorporated company;
(ii) All 829,452 shares of capital stock of Hydril Private Limited
have been duly and validly authorized and issued and are fully paid, and
all 829,452 shares of Hydril Private Limited are owned by the Company free
and clear of any registered security interest and, to the knowledge of such
counsel, any other security interest, claim, lien or encumbrance, except
for those referenced in such opinion; and
15
(iii) Neither the sale of the Offered Securities, nor the
consummation of any other of the transactions contemplated herein nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of Hydril Private Limited pursuant to, (A) the
Memorandum and Articles of Association of Hydril Private Limited, (B) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which Hydril Private Limited is a party or bound
or to which their property is subject and which is listed on an annex to
such opinion, or (C) any statute, law, rule, regulation, judgment, order or
decree applicable to Hydril Private Limited of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over Hydril Private Limited or any of its properties.
(f) The Representatives shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, foreign counsel for the Company to the effect that:
(i) Hydril, S.A. de C.V. (the "Mexican Subsidiary") has been duly
incorporated and is validly existing as a corporation under the laws of
Mexico with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business, which is
the service and sale for threading and tubing used in petroleum exploration
and exploitation;
(ii) All the outstanding shares of capital stock of the Mexican
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectus and except for the pledge described in Annex B, all of such
outstanding shares are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any other
security interest, claim, lien or encumbrance; and
(iii) Neither the sale of the Offered Securities, nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Mexican Subsidiary pursuant to, (A) the charter
or by-laws of the Mexican Subsidiary, (B) the terms of any agreements
listed on an annex to such opinion, or (C) any statute, law, rule or
regulation or, to the knowledge of such counsel, judgment, order or decree
applicable to the Mexican Subsidiary of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Mexican Subsidiary or any of its properties.
(g) The Representatives shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇▇▇▇▇ & Osha L.L.P., intellectual property counsel for the Company
to the effect that:
(i) The Company owns or has obtained licenses for all Intellectual
Property (as defined below) rights owned or used by or licensed to the
Company; "Intellectual Property" means and includes patents, applications
for patents, trademarks and service marks, applications to register
trademarks and service marks, and trade secrets and other proprietary
confidential information;
(ii) Except as described in the Prospectus, to such counsel's actual
knowledge, (A) no third parties have any rights under or to the
Intellectual Property owned by the Company that is necessary for the
conduct of its business; (B) there is no material infringement by third
parties of any such Intellectual Property; (C) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
rights of the Company in or to such Intellectual Property, and such counsel
is unaware of any facts which would form a reasonable basis for any such
claim; (D) there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of such Intellectual
Property, and such counsel is unaware of any facts which would form a
reasonable basis for any such claim; (E) there is no pending or threatened
action, suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary right of others, and such counsel is unaware of any facts which
would form a reasonable basis for any such claim; (F) there is no patent or
16
patent application which contains claims that dominate any claim of an
issued patent owned by the Company; and (G) there is no prior art that
should render any patent held by the Company invalid or any patent
application held by the Company unpatentable which has not been disclosed
to the U.S. Patent and Trademark Office;
(iii) (A) The statements in the Prospectus under the captions "Risk
Factors -- Risks Relating to Our Business -- Limitations on our ability to
protect our intellectual property rights could cause a loss in revenues and
any competitive advantage we hold" and "Business -- Our Emphasis on
Research and Development" and (B) other references in the Prospectus to
patent and licensing matters (collectively, the "Statements"), insofar as
such Statements constitute a summary of legal matters, documents or
proceedings referred to therein, are accurate and fairly present the
information purported to be shown;
(iv) The Statements, as of the date thereof, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make such Statements not misleading in the context in which they are made;
and
(v) Schedule A to such opinion is a listing of all of the Company's
Intellectual Property, and, with respect to the patent applications listed
on such Schedule A, such counsel is unaware of any defects in the
prosecution of any such applications that would irrevocably foreclose
pursuit of the patent rights thereunder.
(h) The Representatives shall have received an opinion, dated such Closing
Date, of O'Melveny and ▇▇▇▇▇ LLP, counsel for the Selling Stockholders, to the
effect that:
(i) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by each of The ▇▇▇▇▇▇ Institute, the
Trust Under Paragraph VIII of the Will of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Deceased, the
Trust under Paragraph V of the Will of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Deceased and the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Living Trust (collectively, the "Named Stockholder"), the
Custody Agreement is valid and binding on the Named Stockholders and each
Named Stockholder has full legal right and authority to sell, transfer and
deliver in the manner provided in this Agreement and the Custody Agreement
the Offered Securities being sold by such Named Stockholder hereunder;
(ii) Assuming that each Underwriter acquires its interest in the
Offered Securities it has purchased from each Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of both
the New York and California Uniform Commercial Code), each Underwriter that
has purchased such Offered Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making payment
therefor as provided herein, and that has had such Offered Securities
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the meaning
of Section 8-102(a)(17) of the New York and California Uniform Commercial
Code) to such Offered Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section 8-105 of
the New York and California Uniform Commercial Code) may be asserted
against such Underwriter with respect to such Offered Securities;
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by any Named
Stockholder of the transactions contemplated herein, except such as may
have been obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Offered Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained; and
(iv) Neither the sale of the Offered Securities being sold by any
Named Stockholder nor the consummation of any other of the transactions
herein contemplated by any Named Stockholder or the fulfillment of the
terms hereof by any Named Stockholder will conflict with, result in a
breach or violation of, or constitute a default under any law or, as
applicable, the charter or By-laws of the Named Stockholder
17
or the terms of any indenture or other agreement or instrument known to
such counsel and to which any Named Stockholder or, as applicable, any of
its subsidiaries is a party or bound, or any judgment, order or decree
known to such counsel to be applicable to any Named Stockholder or, as
applicable, any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over any Named Stockholder or, as applicable, any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
California, New York and, the General Corporation Law of the State of Delaware
or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders or responsible officers thereof and
public officials.
(i) The Representative shall have received an opinion, dated such Closing
Date, of ▇▇▇▇ ▇▇▇▇▇▇, Esq., counsel for Pepperdine University (the
"University"), to the effect that:
(i) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by the University, the Custody Agreement
is valid and binding on the University and the University has full legal
right and authority to sell, transfer and deliver in the manner provided in
this Agreement and the Custody Agreement the Offered Securities being sold
by the University hereunder;
(ii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
University of the transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution
of the Offered Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(iii) Neither the sale of the Offered Securities being sold by the
University nor the consummation of any other of the transactions herein
contemplated by the University or the fulfillment of the terms hereof by
the University will conflict with, result in a breach or violation of, or
constitute a default under any law or, as applicable, the charter or By-
laws of the University or the terms of any indenture or other agreement or
instrument known to such counsel and to which the University or, as
applicable, any of its affiliates is a party or bound, or any judgment,
order or decree known to such counsel to be applicable to the University
or, as applicable, any of its affiliates of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the University or, as applicable, any of its affiliates.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
California, New York and, the General Corporation Law of the State of Delaware
or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem proper, on
certificates of the University or responsible officers thereof and public
officials.
(j) The Representatives shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇'▇▇▇▇▇▇, counsel for Pomona College (the "College"),
to the effect that:
(i) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by the College, the Custody Agreement is
valid and binding on the College and the College has full legal right and
authority to sell, transfer and deliver in the manner provided in this
Agreement and the Custody Agreement the Offered Securities being sold by
the College hereunder;
(ii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the College
of the transactions contemplated herein, except such
18
as may have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Offered Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained; and
(iii) Neither the sale of the Offered Securities being sold by the
College nor the consummation of any other of the transactions herein
contemplated by the College or the fulfillment of the terms hereof by the
College will conflict with, result in a breach or violation of, or
constitute a default under any law or, as applicable, the charter or By-
laws of the College or the terms of any indenture or other agreement or
instrument known to such counsel and to which the College or, as
applicable, any of its affiliates is a party or bound, or any judgment,
order or decree known to such counsel to be applicable to the College or,
as applicable, any of its affiliates of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the College or, as applicable, any of its affiliates.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
California, New York and, the General Corporation Law of the State of Delaware
or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem proper, on
certificates of the College or responsible officers thereof and public
officials.
(k) The Representatives shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
counsel for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the incorporation of the Company, the validity of the Offered
Securities delivered on such Closing Date, the Registration Statements, the
Prospectus and other related matters as the Representatives may require, and the
Selling Stockholders and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(l) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) or Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any underwriter;
and, subsequent to the dates of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(m) The Representatives shall have received a letter, dated such Closing
Date, of Deloitte & Touche LLP which meets the requirements of subsection (a) of
this Section, except that the specified date referred to in such subsection will
be a date not more than three days prior to such Closing Date for the purposes
of this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained
19
in any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically 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 (c) below, provided, further, that
with respect to any untrue statement or alleged untrue statement in or omission
or alleged omission from any preliminary prospectus the indemnity agreement
contained in subsection (a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased the Offered Securities concerned, to the extent that a prospectus
relating to such Offered Securities was required to be delivered by such
Underwriter under the Act in connection with such purchase and any such loss,
claim, damage or liability of such Underwriter results from the fact that there
was not sent or given to such person, at or prior to the written confirmation of
the sale of such Offered Securities to such person, a copy of the Prospectus if
the Company had previously furnished copies thereof to such Underwriter.
(b) Each Selling Stockholder severally will indemnify and hold harmless
each Underwriter, its partners, directors and officers and each person, if any,
who controls such Underwriter within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Selling Stockholders
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by an Underwriter through the Representatives specifically 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 (c) below; provided, further, that a Selling Stockholder shall only
be subject to such liability to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission is based upon written
information provided by such Selling Stockholder to the Company specifically for
inclusion in the Registration Statement, the Prospectus or any amendment or
supplement thereto or contained in a representation or warranty given by such
Selling Stockholder in this Agreement or the Custody Agreement and provided,
further, that the liability under this subsection of each Selling Stockholder
shall be limited to an amount equal to the aggregate gross proceeds (net of
underwriting discounts and commissions) received by such Selling Stockholder
from the sale of Securities sold by such Selling Stockholder hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder, its directors, officers and trustees and each person, if
any, who controls such Selling Stockholder within the meaning of the Act against
any losses, claims, damages or liabilities to which such person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the
20
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act and each Selling
Stockholder, its directors, officers and trustees and each person, if any, who
controls such Selling Stockholder within the meaning of the Act in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that the
only such information furnished by any Underwriter consists of the following
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures and the text related to stabilization,
syndicate covering transactions and penalty bids appearing under the caption
"Underwriting."
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action 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 (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities 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 and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders 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
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
21
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Selling Stockholders for the purchase of
such Offered Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Selling Stockholders for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholders, except as provided in Section 9,
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements
contained in written certificates of the Selling Stockholders, of the Company or
its officers and of the several Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, any Selling Stockholder, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company and
Selling Stockholders shall remain responsible for the expenses to be paid or
reimbursed by them pursuant to Section 5 and the respective obligations of the
Company, the Selling Stockholders, and the Underwriters pursuant to Section 7
shall remain in effect, and if any Offered Securities have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telegraphed and confirmed to the
Representatives, c/o Credit Suisse First Boston Corporation, Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Transactions Advisory Group, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or, if sent to the Selling Stockholders or any of them, will
be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, O'Melveny &
▇▇▇▇▇ LLP at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
22
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇,
as Attorneys-in-Fact, will act for the Selling Stockholders in connection with
such transactions, and any action under or in respect of this Agreement taken by
either of them will be binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
23
If the foregoing is in accordance with the Representatives' understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
_______________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on behalf of the Selling
Stockholders as Attorney-in-Fact
_______________________________________________
▇▇▇▇▇ ▇▇▇ on behalf of the Selling Stockholders
as Attorney-in-Fact
Hydril Company
By:___________________________________
[Insert title]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Dain Raushcer Incorporated
▇▇▇▇▇▇▇ & Company International
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By Credit Suisse First Boston Corporation
By:________________________________________
[Insert title]
24
SCHEDULE A
NUMBER OF
NUMBER OF OPTIONAL
FIRM SECURITIES SECURITIES
SELLING STOCKHOLDER TO BE SOLD TO BE SOLD
------------------- --------------- ----------
Total.........................
25
SCHEDULE B
NUMBER OF
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Credit Suisse First Boston Corporation......................
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc....................................
Bear, ▇▇▇▇▇▇▇ & Co. Inc.....................................
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated..................................
▇▇▇▇▇▇▇ & Company International.............................
Total...................................................
26