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Exhibit 1.1
S&S DRAFT; 10/28/96
[______________] Shares
STEEL DYNAMICS, INC.
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
___________, 1996
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_____________, 1996
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers Inc
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
PaineWebber International (U.K.) Ltd.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers International Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs:
Steel Dynamics, Inc., an Indiana corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedules I and
II hereto (the "Underwriters"), and certain shareholders of the Company (the
"Selling Shareholders") named in Schedule III hereto severally propose to sell
to the several Underwriters, an aggregate of [________] shares of the Common
Stock (par value $.01 per share) of the Company (the "Firm Shares") of which
[_________] shares are to be issued and sold by the Company (the "Company
Shares") and [_________] shares are to be sold by the Selling Shareholders, each
Selling Shareholder selling the amount set forth opposite such Selling
Shareholder's name in Schedule III hereto. The Company and the Selling
Shareholders are hereinafter collectively referred to as the "Sellers".
It is understood that, subject to the conditions hereinafter
stated, [___________] Firm Shares (the "U.S. Firm Shares") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and [_________] Firm Shares (the
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"International Shares") will be sold to the several International Underwriters
named in Schedule II hereto (the "International Underwriters") in connection
with the offering and sale of such International Shares outside the United
States and Canada to persons other than United States and Canadian Persons.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, PaineWebber Incorporated, ▇▇▇▇▇▇▇▇ & Company
Securities, Inc. and Salomon Brothers Inc shall act as representatives (the
"U.S. Representatives") of the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. International Limited, PaineWebber International (U.K.) Ltd., ▇▇▇▇▇▇▇▇ &
Company Securities, Inc. and Salomon Brothers International Limited shall act as
representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "Underwriters".
The Company and the Selling Shareholders also severally
propose to issue and sell to the several U.S. Underwriters not more than an
additional aggregate of [_________] shares of its Common Stock (par value $.01
per share) (the "Additional Shares") if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Common Stock granted to the
U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the "Shares". The shares of Common
Stock (par value $.01 per share) of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock".
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement relating to the Shares.
The registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used in
connection with the offering and sale of Shares in the United States and Canada
to United States and Canadian Persons, and the international prospectus, to be
used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the exhibits thereto and the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), is hereinafter referred to as the "Original Registration
Statement"; any registration statement filed pursuant to Rule 462(b) under the
Securities Act is hereinafter referred to as the "Rule 462(b) Registration
Statement"; the Original Registration Statement and any Rule 462(b) Registration
Statement are hereinafter referred to collectively as the "Registration
Statement"; the U.S. prospectus and the international prospectus in the
respective forms first used to confirm sales of Shares are hereinafter
collectively referred to as the "Prospectus".
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The Underwriters agree to reserve a maximum of [________] Firm
Shares for the offering and sale to certain employees of the Company (and to
certain other persons designated by the Company) at the Purchase Price (as
defined below). Any such shares not purchased by such persons by the end of the
first business day after the date of this Agreement will be offered to the
public by the Underwriters as set forth in the Prospectus
1. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) The Original Registration Statement has become effective,
and if the Company has elected to rely upon Rule 462(b) under the
Securities Act, the Rule 462(b) Registration Statement shall have
become effective not later than the earlier of (i) 10:00 p.m. Eastern
time on the date hereof and (ii) the time confirmations are sent or
given, as specified by Rule 462(b) under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not
contain and each such part, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section 1(b)
do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(f) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid
and non-assessable.
(g) The Company Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar rights.
(h) This Agreement and each of the Irrevocable Power of
Attorney and Custody Agreements (collectively, the "Power of Attorney
and Custody Agreements"), each dated the date hereof, by each Selling
Shareholder and the Company as Custodian (the "Custodian"), appointing
certain individuals as the Selling Shareholders' attorneys-in-fact to
the extent set forth therein relating to the transactions contemplated
hereby and by the Registration Statement have been duly authorized,
executed and delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
the Power of Attorney and Custody Agreements, and the issuance and
delivery of the Company Shares will not contravene any provision of
applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of
or qualification with any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
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(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain such consents, authorizations,
approvals, orders, certificates and permits or make such declarations
and filings would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, certificate or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act or
incorporated by reference into or filed as part of the Rule 462(b)
Registration Statement, complied when so filed in all material respects
with the Securities Act and the rules and regulations of the Commission
thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
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(o) The Company and its subsidiaries are (i) 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"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (1) the
Company and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has
not purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus.
(r) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not
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interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries, in each case except
as described in or contemplated by the Prospectus.
(s) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(u) 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 prudent and customary in the
businesses in which they are engaged; 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 materially and adversely affect the
condition, financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus.
(v) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's
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general or specific authorization; and (4) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(w) There are no holders of securities (debt or equity) of the
Company or any of its subsidiaries, or holders of rights, options, or
warrants to obtain securities of the Company or any of its
subsidiaries, who have the right, during the 180 day period after the
date of this Agreement to require the Company to register securities
held by them under the Securities Act, other than holders who have
waived such right for the 180 day period after the date of the initial
public offering of the Shares and have waived their rights with respect
to the inclusion of their securities in the Registration Statement.
(x) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida), relating
to doing business with the Government of Cuba or with any person or
affiliate located in Cuba.
(y) The Company has obtained the necessary waivers from (i)
the holders of the Company's 11% Senior Subordinated Promissory Notes
due September 30, 2002 (the "Subordinated Notes") to prepay such
Subordinated Notes as described in the "Use of Proceeds" section of the
Prospectus and (ii) the lenders under the Company's Credit Agreement
dated as of June 30, 1994 and as amended as of March 4, 1996.
2. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders severally and not jointly represents and
warrants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement and its Power of Attorney and Custody Agreement
will not contravene any provision of applicable law, or the certificate
of incorporation or by-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or the trust agreement (if such
Selling Shareholder is a trust) or any agreement or other instrument
binding upon such Selling Shareholder or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over such
Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required
for the performance by such Selling Shareholder of its obligations
under this Agreement or the Power of Attorney and Custody Agreement of
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such Selling Shareholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date (as
defined below) will have, valid and marketable title to the Shares to
be sold by such Selling Shareholder and the legal right and power, and
all required authorizations and approvals to enter into this Agreement
and its Power of Attorney and Custody Agreement and to sell, transfer
and deliver the Shares to be sold by such Selling Shareholder.
(d) The Shares to be sold by such Selling Shareholder pursuant
to this Agreement have been duly authorized and are validly issued,
fully paid and non-assessable.
(e) The Power of Attorney and Custody Agreement of such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms, except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(f) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass valid and marketable
title to such Shares free and clear of any security interests, claims,
liens, equities and other encumbrances.
(g) All information furnished to the Company by or on behalf
of such Selling Shareholder expressly for use in the Registration
Statement and Prospectus is, and on the Closing Date (as defined below)
will be, true, correct and complete, and does not, and on the Closing
Date will not, contain any untrue statement of material fact or omit to
state any material fact necessary to make such information not
misleading.
(h) (i) The Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not
contain and each such part, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact
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necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 2(h) do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(i) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Common Stock (provided that such
Selling Shareholder does not make any representation as to any actions
that may be taken by any Underwriter); and such Selling Shareholder has
not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the
Shares other than any preliminary prospectus filed with the Commission
or the Prospectus or other material permitted by the Securities Act.
(j) Such Selling Shareholder has no direct or indirect
association or affiliation with any National Association of Securities
Dealers, Inc. ("NASD") members and has had no arrangements, dealings or
affiliation with, and is not aware of any information relating to
underwriting compensation payable to or for the benefit of, any NASD
member, person associated with a member or any Underwriter, relating to
the offering of Shares that has not been disclosed in the Registration
Statement.
3. Agreements to Sell and Purchase. Each Seller, severally and
not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at U.S.$[______] a share (the
"Purchase Price") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by such Seller as the number of Firm
Shares set forth in Schedules I and II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Sellers,
severally and not jointly, agree to sell to the U.S. Underwriters the Additional
Shares, and the U.S. Underwriters shall have a one-time right to purchase,
severally and not jointly, up to [_________] Additional Shares at the Purchase
Price. If you, on behalf of the U.S. Underwriters, elect to exercise such
option, you shall so notify the Sellers in writing not later than 30 days after
the date of this Agreement, which notice shall specify the number of Additional
Shares to be purchased by the U.S. Underwriters and the date on which such
shares are to be purchased. Such date
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may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representatives may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of U.S. Firm
Shares set forth in Schedule I hereto opposite the name of such U.S. Underwriter
bears to the total number of U.S. Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), it will not,
for a period of 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (provided that such shares or securities are either now owned by
such Seller or are hereafter acquired from the Company), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of such shares of Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise, other
than (a) the sale of the Shares to the Underwriters pursuant to this Agreement
or (b) the issuance by the Company of shares of Common Stock upon the exercise
of an option or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing.
In addition, each Selling Shareholder agrees that, without the
prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will
not, for a period of 180 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Original Registration Statement and
this Agreement have become effective as in your judgment is advisable. The
Sellers are further advised by you that the Shares are to be offered to the
public initially at U.S.$[____] a share (the "Public Offering Price") and to
certain dealers selected by you at a price that represents a concession not in
excess of U.S.$[____] a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S.$[____] a share, to any Underwriter or to certain other dealers.
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Each U.S. Underwriter hereby makes to and with the Company and
each Selling Shareholder the representations and agreements of such U.S.
Underwriter contained in the fifth and sixth paragraphs of Article III of the
Agreement Between U.S. and International Underwriters of even date herewith.
Each International Underwriter hereby makes to and with the Company and each
Selling Shareholder the representations and agreements of such International
Underwriter contained in the seventh, eighth, ninth and tenth paragraphs of
Article III of such Agreement.
5. Payment and Delivery. Payment for the Firm Shares to be
sold by each Seller shall be made by wire transfers to the Company's and the
Custodian's accounts in federal funds or other funds immediately available in
New York City against delivery of such Firm Shares for the respective accounts
of the several Underwriters at the office of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., New York City time, on
[_________], 1996, or at such other time on the same or such other date, not
later than [_________], 1996, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made by wire
transfer payable to the Company's and the Custodian's accounts in federal funds
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several U.S. Underwriters
at the office of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ at 10:00 a.m., New York City time, on the date specified in the notice
described in Section 3 or on such other date, in any event not later than
[_______], 1996, as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The
obligations of the Sellers and the several obligations of the Underwriters
hereunder are subject to the condition that the Registration Statement shall
have become effective not later than the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
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(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Registration Statement,
that, in your judgment, is material and adverse and makes it,
in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus
(exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement).
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company or
the Underwriters, threatened by the Commission.
(d) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, dated the Closing Date, in
the form attached hereto as Exhibit A.
The opinion of ▇▇▇▇▇▇▇ & McNagny shall be rendered to you at
the request of the Company and shall so state therein.
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(e) You shall have received on the Closing Date an opinion of
each of _______________________, [___________________ and
_________________,] counsel for the Selling Shareholders, dated the
Closing Date, in the form attached hereto as Exhibit[s] B[-1 through
B-__, respectively,].
The opinion[s] of _____________[, _____________ and
___________] shall be rendered to the Underwriters at the request of
the Selling Shareholders and shall so state therein.
(f) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, with respect to the Registration Statement and the Prospectus and
such other related matters as you may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(g) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof and the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Deloitte & Touche LLP, independent public accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit C hereto between you, certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or any securities convertible
into or exercisable or exchangeable for such Common Stock, delivered to
you on or before the date hereof, shall be in full force and effect on
the Closing Date.
[(i) True and complete copies of the waivers by (a) the
holders of the Subordinated Notes and (b) the lenders under the
Company's Credit Agreement dated as of June 30, 1994 and as amended as
of March 4, 1996, shall be delivered to you on or before the date
hereof and shall be in full force and effect on the Closing Date.]
(j) You shall have received on the Closing Date certificates
dated the Closing Date and signed by the Selling Shareholders or by
attorneys-in-fact of the Selling Shareholders, to the effect that the
representations and warranties of each such Selling Shareholder
contained in this Agreement are true and correct as of the Closing Date
and that each such Selling Shareholder has complied with all of the
agreements
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and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
(k) The Company shall have complied with the provisions of
Section 7(a) hereof with respect to the furnishing of Prospectuses on
the business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(l) The Shares shall have been approved for quotation on the
Nasdaq National Market System by the NASD.
(m) You shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related to
the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned
in Section 7(c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request. In the case of the Prospectus, to furnish
copies of the Prospectus in New York City, prior to 10:00 a.m., New
York City time, on the business day following the date of this
Agreement, in such quantities as you reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object; and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
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(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of your counsel the Prospectus
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with any review of the offering of the Shares by the NASD.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act no later than the earlier of (i) 10:00 p.m. Eastern time
on the date hereof and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2) under the Securities Act, and shall pay
the applicable fees in accordance with Rule 111 under the Securities
Act.
(f) To make generally available to the Company's security
holders and to you as soon as practicable, but no later than 60 days
after the end of the twelve-month period beginning at the end of the
Company's fiscal quarter during which the effective date of the
Original Registration Statement occurs, an earnings statement of the
Company covering such twelve-month period that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(g) To use the net proceeds received by the Company from the
sale of the Shares hereunder in the manner specified in the Prospectus
under the caption "Use of ▇▇▇▇▇▇▇▇".
▇▇
▇▇
(h) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any preliminary or supplementary Blue Sky memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification
and in connection with any preliminary or supplementary Blue Sky
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the NASD, (v) all fees and expenses in
connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and
expenses incident to quoting the Shares on the Nasdaq National Market
System, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (ix) all other
costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 9 and the last paragraph of Section 11 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
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8. Covenants of the Selling Shareholders. In further
consideration of the agreements of the Underwriters herein contained, each of
the Selling Shareholders severally and not jointly covenants as follows:
(a) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, to pay or cause to be paid
(i) all taxes, if any, on the transfer and sale of the Shares being
sold by such Selling Shareholder and (ii) such Selling Shareholder's
pro rata share (determined by dividing the number of Shares sold by
such Selling Shareholder by the total number of Shares sold by all
Sellers) of all costs and expenses incident to the performance of the
obligations of such Selling Shareholder under this Agreement,
including, but not limited to, all expenses enumerated in Section 7(h)
above, all expenses incident to the delivery of the Shares and the fees
and expenses of counsel and accountants for such Selling Shareholder.
(b) Such Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review, promptly upon
receipt, each amendment thereto provided to such Selling Shareholder.
At any time during the period from the date hereof through the Closing
Date, if there is any change in the information in the Registration
Statement, including the tables and notes thereto that specifically
relate to such Selling Shareholder, such Selling Shareholder will
immediately notify the Company of such change.
(c) Such Selling Shareholder shall cooperate fully with the
Company in supplying such information relating to such Selling
Shareholder and the Shares as the Company may reasonably request for
use in preparation of the Registration Statement and all other
documents reasonably necessary or desirable in connection with the
offering of Shares. In addition, such Selling Shareholder shall furnish
to the Company (or, at the Company's request, to the Underwriters or
other parties) such further certificates and documents confirming the
representations and warranties contained herein, or with respect to
related matters, as the Company may reasonably request.
9. Indemnity and Contribution. (a) The Sellers, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred by any Underwriter or any such controlling
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or
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supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Shareholder
furnished in writing by or on behalf of such Selling Shareholder expressly for
use therein.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholders and each person, if any,
who controls the Company or any Selling Shareholder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Sellers to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to subsection (a), (b) or (c) of this Section
9, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the
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indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for (i) all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) all Selling Shareholders and all persons, if
any, who control any Selling Shareholder within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such controlling persons of Selling Shareholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Shareholders under the Power of Attorney and
Custody Agreements. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this subsection,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid, request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in
subsection (a), (b) or (c) of this Section 9 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such subsection, in lieu
of indemnifying such indemnified party thereunder, shall contribute
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to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the indemnifying party or parties
on the one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and of the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in subsection (e) of this Section 9.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in subsection (e) of this Section 9
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
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(g) The indemnity and contribution provisions contained in
this Section 9 and the representations and warranties of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
(h) The liability of each Selling Shareholder under the
provisions of this Section 9 shall be limited to an amount equal to the Purchase
Price of the Shares to be sold by such Selling Shareholder to the Underwriters
hereunder.
10. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
NASD, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event singly or together with any other such event makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Original Registration Statement by the Commission.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such nondefaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such
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date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 11 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter or Underwriters shall fail or
refuse to purchase Shares and the aggregate number of Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to you and
the Company for the purchase of such Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date or the Option
Closing Date, as the case may be, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Sellers will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by the
laws of the State of New York.
25
24
14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
STEEL DYNAMICS, INC.
By
---------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule III hereto, acting severally
By
---------------------------------
Attorney-in-Fact
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
SALOMON BROTHERS INC
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
By
----------------------------------------
Name:
Title:
26
25
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
SALOMON BROTHERS INTERNATIONAL LIMITED
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited
By
----------------------------------------
Name:
Title:
27
SCHEDULE I
U.S. Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers Inc
--------------
Total U.S. Firm Shares.......................... ==============
28
SCHEDULE II
International Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
PaineWebber International (U.K.) Ltd.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers International Limited
------------------
Total International Firm Shares...........................
==================
29
SCHEDULE III
Selling Shareholders
Number of
Firm Shares
Selling Shareholder To Be Sold
----------------
Total .......................................................
================
30
EXHIBIT A
Pursuant to Section 6(d) of the Underwriting Agreement,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, shall furnish an opinion to the
effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries taken as a whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Company Shares have been duly authorized and are validly issued,
fully paid and non-assessable;
(v) the Company Shares have been duly authorized and, when
issued and delivered in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights;
(vi) the Underwriting Agreement and each of the Irrevocable
Power of Attorney and Custody Agreements (collectively, the "Power of
Attorney and Custody Agreements"), each dated the date hereof, by each
Selling Shareholder and the Company as Custodian, appointing certain
individuals as the Selling Shareholders' attorneys-in-fact to the
extent set forth therein relating to the transactions contemplated
hereby and by the Registration Statement have been duly authorized,
executed and delivered by the Company;
31
A-2
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Power of Attorney and Custody Agreements, and the
issuance and delivery of the Company Shares will not contravene any
provision of applicable law or the articles of incorporation or by-laws
of the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or, to the best of such counsel's knowledge, any
judgment, or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under the Underwriting Agreement, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares;
(viii) the statements (1) in the Prospectus under the captions
"________", "Certain Transactions", "Description of Certain
Indebtedness", "Description of Capital Stock," "Certain United States
Federal Tax Consequences For Non-United States Holders" and
"Underwriters" and (2) in the Registration Statement in Items 14 and
15, in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required;
(x) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xi) such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
included therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities Act and
the rules and regulations of the Commission thereunder,
32
A-3
(2) has no reason to believe that (except for financial statements and
schedules as to which such counsel need not express any belief) the
Registration Statement and the prospectus included therein at the time
the Registration Statement became effective contained any 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 and (3) has no reason to believe that (except
for financial statements and schedules as to which such counsel need
not express any belief) the Prospectus contains any untrue statement of
a material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(xii) each of the Company and its subsidiaries has all
necessary certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and has made all declarations and
filings with, all federal, state and local governmental authorities,
all self-regulatory organizations and all courts and tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, nor is the Company or any of its subsidiaries in violation
of, or in default under, any federal, state and local law, regulation,
rule, decree, order or judgment applicable to the Company or any of its
subsidiaries the effect of which, singly or in the aggregate, would
have a material adverse effect on the prospects, condition, financial
or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in the
Prospectus.
With respect to subsection (xi) above, such counsel may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
33
EXHIBIT B
Pursuant to Section 6(e) of the Underwriting Agreement,
counsel for the Selling Shareholders shall furnish an opinion to the effect
that:
(i) the Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of each of the Selling
Shareholder[s];
(ii) the execution and delivery by [the] [each] Selling
Shareholder[s] of, and the performance by such Selling Shareholder of
its obligations under, the Underwriting Agreement and the Power of
Attorney and Custody Agreement of such Selling Shareholder will not
contravene any applicable law, or the certificate of incorporation or
by-laws of such Selling Shareholder (if such Selling Shareholder is a
corporation), or the trust agreement (if such Selling Shareholder is a
trust) or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon such Selling Shareholder, or to the best
of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such
Selling Shareholder, and no consent, approval, authorization or order
of or qualification with any governmental body or agency is required
for the performance by such Selling Shareholder of its obligations
under this Agreement or Power of Attorney and Custody Agreement of such
Selling Shareholder, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Shares;
(iii) [each of] the Selling Shareholder[s] has valid and
marketable title to the Shares to be sold by such Selling Shareholder
and the legal right and power, and all authorization and approval
required by law, to enter into the Underwriting Agreement and Power of
Attorney and Custody Agreement of such Selling Shareholder and to sell,
transfer and deliver the Shares to be sold by such Selling Shareholder;
(iv) the Power of Attorney and Custody Agreement of [each of]
the Selling Shareholder[s] has been duly authorized, executed and
delivered by the Selling Shareholder[s] and is a valid and binding
agreement of [each of] of the Selling Shareholder[s], enforceable in
accordance with its terms, except as (a) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) the availability of equitable
remedies may be limited by equitable principles of general
applicability;
(v) delivery of the Shares to be sold by each Selling
Shareholder pursuant to the Underwriting Agreement will pass marketable
title to such Shares free and clear of any security interests, claims,
liens, equities and other encumbrances; and
34
B-2
(vi) such counsel has no reason to believe that as to
information relating to the Selling Shareholder (except for financial
statements and schedules as to which such counsel need not express any
belief) the Registration Statement and the prospectus included therein
at the time the Registration Statement became effective contained any
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 and has no reason to believe that as to
information relating to the Selling Shareholder (except for financial
statements and schedules as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel may rely upon an opinion or opinions of counsel
for any Selling Shareholders and, with respect to factual matters and to the
extent such counsel deems appropriate, upon the representations of each Selling
Shareholder contained herein and in the Power of Attorney and Custody Agreement
of such Selling Shareholder and in other documents and instruments; provided
that (A) each such counsel for the Selling Shareholder is satisfactory to
counsel for the Underwriters, (B) a copy of each opinion so relied upon is
delivered to you and is in form and substance satisfactory to counsel for the
Underwriters, (C) copies of such Power of Attorney and Custody Agreement and of
any such other documents and instruments shall be delivered to you and shall be
in form and substance satisfactory to counsel for the Underwriters and (D) such
counsel shall state in their opinion that they are justified in relying on each
such other opinion.
35
EXHIBIT C
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
PaineWebber Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers Inc
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
PaineWebber International (U.K.) Ltd.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Salomon Brothers International Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that Steel Dynamics, Inc., an
Indiana corporation (the "Company"), and the shareholders (the "Selling
Shareholders") of the Company named in Schedule III of the Underwriting
Agreement (as defined below) propose to enter into an underwriting agreement
(the "Underwriting Agreement") with (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), PaineWebber Incorporated, ▇▇▇▇▇▇▇▇ & Company Securities,
Inc. and Salomon Brothers Inc, as representatives of the several U.S.
underwriters (the "U.S. Underwriters") named in Schedule I thereto, and (b)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited, PaineWebber International (U.K.)
Ltd., ▇▇▇▇▇▇▇▇ & Company Securities, Inc. and Salomon Brothers International
Limited, as representatives of the several international underwriters (the
several international underwriters and the U.S. Underwriters being hereinafter
collectively called the "Underwriters") named in Schedule II thereto, providing
for the public offering (the "Public Offering") of shares of the Company's
Common Stock (par value $.01 per share) (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, it will not, during the period commencing on the date hereof and ending
180 days after the date of the final prospectus relating to the Public Offering
(the "Prospectus"), (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (provided that such shares
or securities are either now owned by the undersigned or are hereafter acquired
prior to or in connection with the Public Offering), or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part,
36
C-2
any of the economic consequences of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the sale of any shares of
Common Stock to the Underwriters pursuant to the Underwriting Agreement. In
addition, the undersigned agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to
agreement between the Company, the Selling Shareholders and the Underwriters.
Very truly yours,
-----------------------------
(Name)
-----------------------------
(Print Name)
-----------------------------
(Address)
Accepted as of the date
first set forth above:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
-----------------------------------