DRAFT OF 4/3/98
▇▇▇▇▇▇ INDUSTRIES, INC.
(A DELAWARE CORPORATION)
COMMON STOCK
UNDERWRITING AGREEMENT
DATED: ______________, 1998
▇▇▇▇▇▇ INDUSTRIES, INC.
UNDERWRITING AGREEMENT
_________________, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
As Representatives of the Several
Underwriters Named in Schedule A hereto
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Industries, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule A (collectively, the
"Underwriters") an aggregate of __________ shares of Common Stock, $0.01 par
value per share (the "Common Stock"), of the Company (the "Firm Shares"). The
Firm Shares are to be sold to each Underwriter, acting severally and not
jointly, in such amounts as are set forth in Schedule A opposite the name of
such Underwriter. The Company also grants to the Underwriters, severally and
not jointly, the option described in Section 4 to purchase, on the same terms as
the Firm Shares, up to __________ additional shares of Common Stock (the "Option
Shares") solely to cover over-allotments. The Firm Shares, together with all or
any part of the Option Shares, are collectively herein called the "Shares."
Section 1. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-________) with
respect to the Shares, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the applicable
rules and regulations (the "1933 Act Regulations") of the Securities and
Exchange Commission (the "Commission"), and has been filed with the
Commission; and such amendments to such registration statement as may have
been required prior to the date hereof have been filed with the Commission,
and such amendments have been similarly prepared. Copies of such
registration statement and amendment or amendments and of each related
preliminary prospectus, and the exhibits, financial statements and
schedules, as finally amended and revised, have been delivered to you. The
Company has prepared in the same manner, and proposes so to file with the
Commission, one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of
final prospectus, (ii) if the Company does not rely on Rule 434 of the 1933
Act Regulations, a
final prospectus in accordance with Rules 430A and 424(b) of the 1933 Act
Regulations, or (iii) if the Company relies on Rule 434 of the 1933 Act
Regulations, a term sheet relating to the Shares that shall identify the
preliminary prospectus that it supplements containing such information as
is required or permitted by Rules 434, 430A and 424(b) of the 1933 Act
Regulations. The Company also may file a related registration statement
with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations for
the purpose of registering certain additional shares of Common Stock, which
registration statement will be effective upon filing with the Commission.
As filed, such amendment, such final prospectus, any term sheet and form of
final prospectus and any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations, shall include all Rule 430A Information
(as defined below) and, except to the extent that you shall agree in
writing to a modification, shall be in all respects in the form furnished
to you prior to the date and time that this Agreement was executed and
delivered by the parties hereto, or, to the extent not completed at such
date and time, shall contain only such specific additional information and
other changes (beyond that contained in the latest preliminary prospectus
and in addition to the Rule 430A Information) as the Company shall have
previously advised you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean
the registration statement referred to in the preceding paragraph at the
time such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing
Time (as hereinafter defined), shall also mean such registration statement
as so amended; provided, however, that such term shall also include all
Rule 430A Information contained in any Prospectus and any Term Sheet (as
hereinafter defined) and deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the 1933 Act Regulations. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the
preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean (i) if the Company relies on Rule 434 of the 1933 Act Regulations, the
Term Sheet relating to the Shares that is first filed pursuant to Rule
424(b)(7) of the 1933 Act Regulations, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements or (ii) if
the Company does not rely on Rule 434 of the 1933 Act Regulations, the
prospectus relating to the Shares in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations or,
if no filing pursuant to Rule 424(b) of the 1933 Act Regulations is
required, shall mean the form of final prospectus included in the
Registration Statement at the time such Registration Statement becomes
effective. The term "Rule 430A Information" means information with respect
to the Shares and the offering thereof permitted pursuant to Rule 430A of
the 1933 Act Regulations to be omitted from the Registration Statement when
it becomes effective. The term "462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b) of
the 1933 Act Regulations (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
registration statement becomes effective). The term "Term Sheet" means any
term sheet that satisfies the requirements of Rule 434 of the 1933 Act
Regulations. Any
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reference to the "date" of a Prospectus that includes a Term Sheet
shall mean the date of such Term Sheet.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and no proceedings for that
purpose have been instituted or threatened by the Commission or the state
securities or blue sky authority of any jurisdiction, and each Preliminary
Prospectus and any amendment or supplement thereto, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933
Act and the 1933 Act Regulations, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter expressly
for use in the Registration Statement or any 462(b) Registration Statement.
(c) When the Registration Statement and any 462(b) Registration
Statement shall become effective, when any Term Sheet that is part of the
Prospectus is filed with the Commission pursuant to Rule 434, when the
Prospectus is first filed pursuant to Rule 424(b) of the 1933 Act
Regulations, when any amendment to the Registration Statement or any 462(b)
Registration Statement becomes effective, when any supplement to the
Prospectus or any Term Sheet is filed with the Commission and at the
Closing Time and Date of Delivery (as hereinafter defined), (i) the
Registration Statement, the 462(b) Registration Statement, the Prospectus,
the Term Sheet and any amendments thereof and supplements thereto will
conform in all material respects with the applicable requirements of the
1933 Act and the 1933 Act Regulations, and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term
Sheet nor any amendment or supplement thereto will contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter expressly for use in the Registration Statement or any 462(b)
Registration Statement.
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of Delaware with
all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus. The Company is duly qualified to transact
business as a foreign corporation and is in good standing in each of the
jurisdictions in which the ownership or leasing of its properties or the
nature or conduct of its business as described in the Registration
Statement and the Prospectus, after giving effect to the transactions
contemplated by the Registration Statement and the Prospectus, requires
such qualification, except where the failure to do so would not materially
and adversely affect the business, prospects, properties, assets, results
of operations or condition (financial or otherwise) of the Company and its
Subsidiaries (as hereinafter defined) taken as a whole.
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(e) All of the Company's subsidiaries are named on an exhibit to the
Registration Statement (each a "Subsidiary" and collectively the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
state of its incorporation with all requisite corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus. Each such
entity is duly qualified to do business and is in good standing as a
foreign corporation in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business as
described in the Registration Statement and the Prospectus conducted
requires such qualification, except where the failure to do so would not
materially and adversely affect the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of the
Company or any of its Subsidiaries.
(f) The Company has full corporate right, power and authority to enter
into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement of the Company, enforceable
in accordance with its terms, except to the extent that enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws of general applicability relating to or affecting creditors' rights,
or by general principles of equity whether considered at law or at equity
and except to the extent enforcement of the indemnification provisions set
forth in Section 6 of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
(g) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby has been made or obtained and is in full force and
effect, except, with respect to this Agreement, as may be required under
applicable state securities laws.
(h) Neither the issuance, sale and delivery by the Company of the
Shares, nor the execution, delivery and performance of this Agreement, nor
the consummation of the transactions contemplated hereby will conflict with
or result in a breach or violation of any of the terms and provisions of,
or (with or without the giving of notice or the passage of time or both)
constitute a default under, the charter or bylaws of the Company or its
Subsidiaries, or any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which the Company or its
Subsidiaries is a party or to which any of the respective properties or
other assets of the Company or its Subsidiaries is subject, or any
applicable statute, rule, regulation, judgment, or decree, or order of any
court or governmental agency or body applicable to any of the foregoing or
any of their respective properties, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of the
Company or its Subsidiaries.
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(i) The Shares to be issued and sold to the Underwriters hereunder
have been validly authorized by the Company. When issued and delivered
against payment therefor as provided in this Agreement, the Shares will be
duly and validly issued, fully paid and nonassessable. No preemptive
rights of shareholders exist with respect to any of the Shares which have
not been satisfied or waived. No person or entity holds a right to require
or participate in the registration under the 1933 Act of the Shares
pursuant to the Registration Statement which has not been satisfied or
waived; and, except as set forth in the Prospectus, no person holds a right
to require registration under the 1933 Act of any shares of Common Stock of
the Company or shares of capital stock of any of the Subsidiaries at any
other time which has not been satisfied or waived.
(j) The Company's authorized, issued and outstanding capital stock is
as disclosed in the Prospectus. None of the issued shares of capital stock
of the Company has been issued or is owned or held in violation of any
preemptive rights of stockholders. All of the issued shares of capital
stock of the Company have been duly authorized and validly issued, fully
paid and nonassessable and conform to the description of the Company's
capital stock contained in the Prospectus.
(k) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and are owned directly by the Company free and clear of
all liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any nature
whatsoever. None of the issued shares of capital stock of either of the
Subsidiaries has been issued or is owned or held in violation of any
preemptive rights of shareholders. Other than its Subsidiaries, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association.
(l) Except as disclosed in the Prospectus, there are no outstanding
(i) securities or obligations of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock of the Company or
any such Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options.
(m) The Company and its Subsidiaries have good and marketable title,
or a valid and renewable leasehold interest to all real property, if any,
and good title to all personal property owned by it, in each case free and
clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the Prospectus or
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or 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 or any Subsidiaries are held
under valid, existing and enforceable leases, with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere
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with the use made or proposed to be made of such property and buildings by
the Company or such Subsidiary.
(n) The balance sheet of the Company and its consolidated Subsidiaries
and the financial statements of each of the Subsidiaries, Orange
Shipbuilding Company, Inc., and ▇▇▇▇▇▇ Shipyard, Inc., included in the
Registration Statement and Prospectus present fairly the financial position
of such entities as of the dates indicated and the results of operations
and cash flows for such entities for the periods specified, all in
conformity with generally accepted accounting principles applied on a
consistent basis. The financial statement schedules included in the
Registration Statement and the amounts in the Prospectus under the captions
"Prospectus Summary -- Summary Selected Financial Data" and "Selected
Financial Data" fairly present the information shown therein and have been
compiled on a basis consistent with the financial statements included in
the Registration Statement and the Prospectus. The unaudited pro forma
financial information (including the related notes) included in the
Prospectus or any Preliminary Prospectus complies as to form in all
material respects to the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations, and management of the Company has a
reasonable basis for believing and does believe that the assumptions
underlying the pro forma adjustments are reasonable. Such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents, with
respect to such entities, the financial position, results of operations and
other information purported to be shown therein at the respective dates and
for the respective periods specified.
(o) Deloitte & Touche LLP, who have examined and are reporting upon
the audited financial statements and schedules included in the Registration
Statement, are, and were during the periods covered by their reports
included in the Registration Statement and the Prospectus, independent
public accountants within the meaning of the 1933 Act and the 1933 Act
Regulations.
(p) Neither the Company nor any of its Subsidiaries has sustained,
since December 31, 1997, any material loss or interference with its
business from fire, explosion, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
arbitrators' or court or governmental action, order or decree; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as otherwise stated in the
Registration Statement and Prospectus, there has not been (i) any material
change in the capital stock, long-term debt, obligations under capital
leases or short-term borrowings of the Company or its Subsidiaries, or (ii)
any material adverse change, or any development which could reasonably be
seen as involving a prospective material adverse change, in or affecting
the business, prospects, properties, assets, results of operations or
condition (financial or other) of the Company or its Subsidiaries.
(q) Neither the Company nor any of its Subsidiaries is in violation of
its charter, or by-laws, and no default exists, and no event has occurred,
nor state of facts exists, which, with notice or after the lapse of time to
cure or both, would constitute a
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default in the due performance and observance of any obligation, agreement,
term, covenant, consideration or condition contained in any indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which any such entity is a party or to which any such entity
or any of its properties is subject. Neither the Company nor any of its
Subsidiaries is in violation of, or in default with respect to, any
statute, rule, regulation, order, judgment or decree, except as may be
properly described in the Prospectus or such as in the aggregate do not now
have and will not in the future materially and adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company or any of its Subsidiaries.
(r) There is not pending or threatened, any action, suit, proceeding,
inquiry or investigation against the Company, its Subsidiaries or any of
the officers and directors of the Company or its Subsidiaries or to which
the properties, assets or rights of the Company or its Subsidiaries are
subject, before or brought by any court or governmental agency or body or
board of arbitrators that is required to be described in the Registration
Statement or the Prospectus but is not described as required.
(s) The descriptions in the Registration Statement and the Prospectus
of the contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no
contracts, leases, or other documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or filed as
required.
(t) The Company and each of its Subsidiaries own, possess or have
obtained all material permits, licenses, franchises, certificates,
consents, orders, approvals and other authorizations of governmental or
regulatory authorities or other entities as are necessary to own or lease,
as the case may be, and to operate its properties and to carry on its
business as presently conducted, or as contemplated in the Prospectus to be
conducted, and neither the Company nor any of its Subsidiaries has received
any notice of proceedings relating to revocation or modification of any
such licenses, permits, franchises, certificates, consents, orders,
approvals or authorizations.
(u) Each of the Company and each of its Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property rights and
know-how (collectively "Intangibles") necessary to entitle the Company and
each of its Subsidiaries to conduct its business as described in the
Prospectus, and neither the Company nor any of its Subsidiaries has
received notice of infringement of or conflict with (and knows of no such
infringement of or conflict with) asserted rights of others with respect to
any Intangibles which could materially and adversely affect the business,
prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company or any of its Subsidiaries.
(v) Each of the Company's and its Subsidiaries' respective systems of
internal accounting controls are sufficient to meet the broad objectives of
internal accounting
7
control insofar as those objectives pertain to the prevention or detection
of errors or irregularities in amounts that would be material in relation
to the Company's or its Subsidiaries' financial statements; and neither the
Company, its Subsidiaries, nor any employee or agent thereof has made any
payment of funds of the Company or its Subsidiaries nor received or
retained any funds, and no funds of the Company or its Subsidiaries have
been set aside to be used for any payment, in each case in violation of any
law, rule or regulation.
(w) Each of the Company and its Subsidiaries have filed on a timely
basis all necessary federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has been asserted against
any such entity, nor does any such entity know of any tax deficiency which
is likely to be asserted against any such entity which if determined
adversely to any such entity, could materially adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries. All tax
liabilities are adequately provided for on the respective books of the
Company and its Subsidiaries.
(x) Each of the Company and its Subsidiaries maintain insurance
(issued by insurers of recognized financial responsibility) of the types
and in the amounts generally deemed adequate for its business and,
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
(y) Each of the Company, its Subsidiaries, and their officers,
directors or affiliates have not taken, and will not take, directly or
indirectly, any action that is designed to, or that might reasonably be
expected to, cause or result in or constitute the stabilization or
manipulation of any security of the Company or to facilitate the sale or
resale of the Shares.
(z) Neither the Company nor any of its Subsidiaries is, will become as
a result of the transactions contemplated hereby, or will conduct its
business in a manner which would cause it to become, "an investment
company,"or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
Section 2. Sale and Delivery of the Shares to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Underwriters the Firm
Shares and each Underwriter agrees, severally and not jointly, to purchase
from the Company the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A (the proportion which each Underwriter's
share of the total number of the Firm Shares bears to the total number of
Firm Shares is
8
hereinafter referred to as such Underwriter's "underwriting obligation
proportion"), at a purchase price of $__________ per share.
(b) In addition, on the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the Underwriters to purchase,
severally and not jointly, up to an additional __________ Option Shares at
the same purchase price as shall be applicable to the Firm Shares. The
option hereby granted will expire within the thirty (30) day period after
the date of the Prospectus if not exercised by giving written notice to the
Company. The option granted hereby may be exercised in whole or in part
(but not more than once) by you, as representatives of the Underwriters,
only for the purpose of covering over-allotments that may be made in
connection with the offering and distribution of the Firm Shares. The
notice of exercise shall set forth the number of Option Shares as to which
the several Underwriters are exercising the option, and the time and date
of payment and delivery thereof. Such time and date of delivery (the "Date
of Delivery") shall be determined by you but shall not be later than three
full business days after the exercise of such option, nor in any event
prior to the Closing Time. If the option is exercised as to all or any
portion of the Option Shares, the Option Shares as to which the option is
exercised shall be purchased by the Underwriters, severally and not
jointly, in their respective underwriting obligation proportions.
(c) Payment of the purchase price for and delivery of certificates in
definitive form representing the Firm Shares shall be made at the offices
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place as shall be agreed upon by the Company and
you, at 10:00 a.m., either (i) on the third full business day after the
execution of this Agreement, or (ii) at such other time not more than ten
full business days thereafter as you and the Company shall determine
(unless, in either case, postponed pursuant to the terms hereof), (such
date and time of payment and delivery being herein called the "Closing
Time"). In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price for and
delivery of certificates in definitive form representing the Option Shares
shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. in the manner
set forth above, or at such other place as the Company and you shall
determine, on the Date of Delivery as specified in the notice from you to
the Company. Payment for the Firm Shares and the Option Shares shall be
made to the Company by wire transfer in same-day funds to the accounts
designated to the Underwriters in writing by the Company (or in such other
manner as you and the Company shall agree) against delivery to you for the
respective accounts of the Underwriters of the Shares to be purchased by
them.
(d) The certificates representing the Shares to be purchased by the
Underwriters shall be in such denominations and registered in such names as
you may request in writing at least two full business days before the
Closing Time or the Date of Delivery, as the case may be. The certificates
representing the Shares will be made available at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & Company, Inc. or at such other place as ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company,
Inc. may designate for examination and packaging not later than 10:00 a.m.
at least one full business day prior to the Closing Time or the Date of
9
Delivery as the case may be.
(e) After the Registration Statement becomes effective, you intend to
offer the Shares to the public as set forth in the Prospectus, but after
the initial public offering of such Shares you may in your discretion vary
the public offering price.
Section 3. Certain Covenants of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (if not yet effective at the date and time
that this Agreement is executed and delivered by the parties hereto). If
the Company elects to rely upon Rule 430A of the 1933 Act Regulations or
the filing of the Prospectus is otherwise required under Rule 424(b) of the
1933 Act Regulations, the Company will comply with the requirements of Rule
430A and will file the Prospectus, properly completed, pursuant to the
applicable provisions of Rule 424(b), or a Term Sheet pursuant to and in
accordance with Rule 434, within the time period prescribed. If the
Company elects to rely upon Rule 462(b) of the 1933 Act Regulations, the
Company shall file a 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee.
The Company will notify you immediately, and confirm the notice in writing,
(i) when the Registration Statement, 462(b) Registration Statement or any
post-effective amendment to the Registration Statement, shall have become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission to amend the
Registration Statement or 462(b) Registration Statement or amend or
supplement the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any 462(b) Registration Statement or of
any order preventing or suspending the use of any Preliminary Prospectus or
the suspension of the qualification of the Shares for offering or sale in
any jurisdiction, or of the institution or threatening of any proceeding
for any such purposes. The Company will use every reasonable effort to
prevent the issuance of any such stop order or of any order preventing or
suspending such use and, if any such order is issued, to obtain the
withdrawal thereof at the earliest possible moment.
(b) The Company will not at any time file any amendment or supplement
or make any amendment to (i) the Registration Statement, or (ii) to the
Prospectus, if the Company has not elected to rely upon Rule 430A, (iii) if
the Company has elected to rely upon Rule 430A, to either the Prospectus
included in the Registration Statement at the time it becomes effective or
to the Prospectus filed in accordance with Rule 424(b) or any Term Sheet
filed in accordance with Rule 434, or (iv) if the Company has elected to
rely upon Rule 462(b), to any 462(b) Registration Statement, in any case if
you shall not have previously been advised and furnished a copy thereof a
reasonable time prior to the proposed filing, or if you or counsel for the
Underwriters shall object to such amendment
10
or supplement.
(c) The Company has furnished or will furnish to you, at its expense,
as soon as available, three copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or
after the Registration Statement becomes effective, copies of all exhibits
and documents filed therewith and signed copies of all consents and
certificates of experts, as you may reasonably request, and has furnished
or will furnish to each Underwriter, one conformed copy of the Registration
Statement as originally filed and of each amendment thereto.
(d) The Company will deliver to each Underwriter, at the Company's
expense, from time to time, as many copies of each Preliminary Prospectus
as such Underwriter may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will deliver to each Underwriter, at the Company's expense, as soon
as the Registration Statement shall have become effective and thereafter
from time to time as requested during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as supplemented or amended) as each Underwriter may reasonably
request. The Company will comply to the best of its ability with the 1933
Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and in the
Prospectus. If the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the Prospectus
or any Term Sheet in connection with the offering or sale of the Shares and
if at such time any events shall have occurred as a result of which the
Prospectus or any Term Sheet as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus or any Term
Sheet is delivered not misleading, or, if for any reason it shall be
necessary during such same period to amend or supplement the Prospectus or
any Term Sheet in order to comply with the 1933 Act or the 1933 Act
Regulations, the Company will notify you and upon your request prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an
amended Prospectus or any Term Sheet or a supplement to the Prospectus or
any Term Sheet or an amendment or supplement to any such incorporated
document which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus or any Term Sheet, upon your
request but at the expense of such Underwriter, the Company will prepare
and deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus or any Term Sheet complying with Section
10(a)(3) of the 1933 Act.
(e) The Company will use its best efforts to qualify the Shares for
offering and sale under the applicable securities laws of such states and
other jurisdictions as you may designate and to maintain such
qualifications in effect for as long as may be necessary to complete the
distribution of the Shares; provided, however, that the Company shall not
be
11
obligated to file any general consent to service of process or to qualify
as a foreign corporation in any jurisdiction in which it is not so
qualified or to make any undertakings in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will file
such statements and reports as may be required by the laws of each
jurisdiction in which the Shares have been qualified as above provided.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than the end of the
fiscal quarter first occurring after the first anniversary of the
"effective date of the Registration Statement" (as defined in Rule 158(c)
of the 1933 Act Regulations), an earnings statement (in reasonable detail
but which need not be audited) complying with the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder and covering a period of at
least 12 months beginning after the effective date of the Registration
Statement.
(g) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(h) During a period of five years after the date hereof, the Company
will furnish to you: (i) if and at the time it furnishes such reports to
its securityholders, statements of operations of the Company for each of
the first three quarters of each fiscal year in the form furnished to the
Company's securityholders; (ii) concurrently with furnishing to its
securityholders, a balance sheet of the Company as of the end of such
fiscal year, together with statements of operations, of cash flows and of
stockholders' equity of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent public
accountants; (iii) as soon as they are available, copies of all reports
(financial or otherwise) mailed to securityholders; (iv) as soon as they
are available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or the National
Association of Securities Dealers, Inc. (the "NASD"); (v) every material
press release in respect of the Company or its affairs which is released by
the Company; and (vi) any additional information of a public nature
concerning the Company or its business that you may reasonably request.
During such five-year period, the foregoing financial statements shall be
on a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so
consolidated.
(i) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, the
Company will not, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Company, Inc., (a) 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, or (b)
enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of Common Stock
(regardless of whether any of the transactions described in clause (a) or
(b) is to be settled by the delivery of Common Stock or such other
securities, in cash or otherwise) except pursuant to the Company's 1998
Stock Plan (as specified in the Prospectus under the caption "Management")
or in connection with the acquisition of businesses or assets by the
Company or a subsidiary of the Company or in connection with the warrants
to be issued
12
to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. as described in the Prospectus, and the
Company will obtain the undertaking of each person who is a shareholder of
the Company (individually, a "Shareholder" and collectively, the
"Shareholders") as of the date of this Agreement not to engage in any of
the aforementioned transactions on their own behalf except in connection
with any gift of Common Stock by a Shareholder to a donee who agrees in
writing for the benefit of the Underwriters to be bound by the foregoing
restrictions with respect to such Common Stock.
(j) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be
the same entity as the transfer agent) for its Common Stock.
(k) The Company will cause the Shares to be listed, subject to notice
of issuance, on the Nasdaq National Market and will use its best efforts to
maintain the listing of the Shares on the Nasdaq National Market.
(l) The Company is familiar with the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such
a manner so as to ensure that the Company was not and will not be an
"investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(m) The Company will not, and will use its best efforts to cause its
officers, directors and affiliates not to, in violation of Regulation M of
the Securities Exchange Act of 1934 (the "1934 Act") (i) take, directly or
indirectly prior to termination of the underwriting syndicate contemplated
by this Agreement, any action designed to stabilize or manipulate the price
of any security of the Company, or which may cause or result in, or which
might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company,
to facilitate the sale or resale of any of the Shares, (ii) sell, bid for,
purchase or pay anyone any compensation for soliciting purchases of the
Shares or (iii) pay or agree to pay to any person any compensation for
soliciting any order to purchase any other securities of the Company.
(n) If at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus) and after
written notice from you advising the Company to the effect set forth above,
the Company agrees to consult with you concerning the substance and
dissemination of a press release or other public statement responding to or
commenting on such rumor, publication or event.
(o) The Company will timely complete all required filings and
otherwise fully comply in a timely manner with all provisions of the 1934
Act, and the rules and regulations of the Commission thereunder, in
connection with the registration of the Shares thereunder.
Section 4. Payment of Expenses. The Company will pay and bear all costs,
fees and expenses incident to the performance of its obligations under this
Agreement (excluding fees and expenses of counsel for the Underwriters, except
as specifically set forth below), including (a)
13
the preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, the
Preliminary Prospectuses, the Prospectus and any Term Sheet and any amendments
or supplements thereto, and the cost of furnishing copies thereof to the
Underwriters, (b) the preparation, printing and distribution of this Agreement,
the certificates representing the Shares, the Blue Sky Memoranda and any
instruments relating to any of the foregoing, (c) the issuance and delivery of
the Shares to the Underwriters, including any transfer taxes payable upon the
sale of the Shares to the Underwriters (other than transfer taxes on resales by
the Underwriters), (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Shares under the applicable securities
laws in accordance with the terms of this Agreement, including filing fees and
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Memoranda, (f) all costs,
fees and expenses in connection with the notification to the Nasdaq National
Market of the proposed issuance of the Shares, (g) filing fees relating to the
review of the offering by the NASD, (h) the transfer agent's and registrar's
fees and all miscellaneous expenses referred to in Part II of the Registration
Statement, (i) costs related to travel and lodging incurred by the Company and
their representatives relating to meetings with and presentations to prospective
purchasers of the Shares reasonably determined by the Underwriters to be
necessary or desirable to effect the sale of the Shares to the public, and (j)
all other costs and expenses incident to the performance of the Company's
obligations hereunder (including costs incurred in closing the purchase of the
Option Shares, if any) that are not otherwise specifically provided for in this
section. The Company, upon your request, will provide funds in advance for
filing fees in connection with "blue sky" qualifications and the review of the
offering by the NASD.
Section 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for (i) the Firm Shares that they have
respectively agreed to purchase pursuant to this Agreement (and any Option
Shares as to which the option granted in Section 2 has been exercised and the
Date of Delivery determined by you is the same as the Closing Time) at the
Closing Time and (ii) the Option Shares at the Date of Delivery of the Option
Shares, are subject to the accuracy of the representations and warranties of the
Company contained herein as of the Closing Time or the Date of Delivery, as the
case may be, and to the accuracy of the representations and warranties of the
Company contained in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 p.m. on the date of this Agreement or, with your consent, at a
later time and date not later, however, than 5:30 p.m. on the first
business day following the date hereof, or at such later time or on such
later date as you may agree to in writing; if the Company has elected to
rely upon Rule 462(b), the 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; and at the Closing Time, no stop order suspending the
effectiveness of the Registration Statement or any 462(b) Registration
Statement shall have been issued under the 1933 Act, and no proceedings for
that purpose shall have been instituted or shall be pending or, to your
knowledge or the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for additional
information shall have been
14
complied with to the satisfaction of counsel for the Underwriters. If the
Company has elected to rely upon Rule 430A, a Prospectus or a Term Sheet
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a favorable opinion
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Company, dated as of the Closing
Time, together with signed or reproduced copies of such opinion for each of
the other Underwriters, in form and substance satisfactory to counsel for
the Underwriters, 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 State
of Delaware with the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Company is qualified
to transact business as a foreign corporation and is in good standing
in each of the jurisdictions in which the ownership or leasing of the
Company's properties or the nature or conduct of its business requires
such qualification, except where the failure to do so would not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the
Company and its Subsidiaries taken as a whole.
(ii) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the state of its incorporation. Each such entity has all requisite
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement
and the Prospectus. Each such entity is duly qualified to do business
and is in good standing as a foreign corporation in each other
jurisdiction in which the ownership or leasing of its properties or
the nature or conduct of its business requires such qualification,
except where the failure to do so would not materially and adversely
affect the business, prospects, properties, assets, results of
operations or condition (financial or otherwise) of the Company or any
of its Subsidiaries.
(iii) The Company has the corporate power and authority to enter
into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery by the
Underwriters, constitutes a valid and binding agreement of the
Company, enforceable in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights
or by general principles of equity whether considered at law or in
equity and except to the extent that enforcement of the
indemnification provisions set forth in Section 6 of
15
this Agreement may be limited by federal or state securities laws or
the public policy underlying such laws.
(iv) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with
any governmental agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the execution, delivery and
performance of this Agreement, and the consummation by the Company of
the transactions contemplated hereby, has been made or obtained and is
in full force and effect, except such as may be necessary under state
securities laws or required by the NASD in connection with the
purchase and distribution of the Shares by the Underwriters, as to
which such counsel need express no opinion.
(v) Neither the issuance, sale and delivery by the Company of
the Shares, nor the execution, delivery and performance of this
Agreement, nor the consummation of the transactions contemplated
hereby, will conflict with or result in a breach or violation of any
of the terms and provisions of, or (with or without the giving of
notice or the passage of time or both) constitute a default under, the
charter or by-laws of the Company or its Subsidiaries, or any
indenture, mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which the Company or its
Subsidiaries, is a party or to which the Company or its Subsidiaries,
respectively, or any of its respective properties or other assets, is
subject; or, to such counsel's knowledge, any applicable statute,
rule, regulation, judgment, decree or order of any court or
governmental agency or body; or to such counsel's knowledge, result in
the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or its Subsidiaries.
(vi) The Common Stock conforms in all material respects as to
legal matters to the description thereof contained in the Registration
Statement and the Prospectus under the heading "Description of Capital
Stock."
(vii) The Shares to be issued and sold to the Underwriters
hereunder have been validly authorized by the Company. When issued
and delivered against payment therefor as provided in this Agreement,
such shares will be validly issued, fully paid and nonassessable. To
such counsel's knowledge, no preemptive rights of shareholders exist
with respect to any of the Shares which have not been satisfied or
waived. To such counsel's knowledge, no person or entity holds a
right to require or participate in the registration under the 1933 Act
of the Shares pursuant to the Registration Statement which has not
been satisfied or waived; and, except as set forth in the Prospectus,
no person holds a right to require registration under the 1933 Act of
any shares of Common Stock of the Company at any other time which has
not been satisfied or waived. The form of certificates evidencing the
Shares complies with all applicable requirements of Delaware law.
16
(viii) The Company has an authorized capitalization as set forth
in the Prospectus under the caption "Capitalization." All of the
issued shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable. None
of the issued shares of capital stock of the Company has been issued
or is owned or held in violation of any preemptive rights of
shareholders. All offers and sales of capital stock prior to the date
hereof were at all relevant times duly registered under the 1933 Act
or were exempt from the registration requirements of the 1933 Act by
reason of Sections 3(b), 4(2) or 4(6) thereof and were duly registered
or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws,
provided, however, that such counsel need not express any opinion with
respect to the registration or availability of an exemption under
applicable state securities or blue sky laws for shares of Common
Stock issued pursuant to an underwritten public offering.
(ix) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned directly by the Company free and
clear of all liens, security interests, pledges, charges encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims
of any nature whatsoever. Other than its Subsidiaries, the Company
does not own, directly or indirectly, any capital stock or other
equity securities of any other corporation or any ownership interest
in any partnership, joint venture or other association.
(x) Except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such Subsidiary, (ii) warrants, rights or options
to subscribe for or purchase from the Company or any such Subsidiary
any such capital stock or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company or any
such Subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligation, or any such
warrants, rights or options.
(xi) The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good title to all
personal property owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects, except such as are disclosed in the Prospectus or such as
do not materially and adversely affect the value of such property and
do not interfere with the use made or proposed to be made of such
property by the Company and its Subsidiaries.
(xii) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws, and no material default exists,
and no event has occurred nor state of facts exist which, with notice
or after the lapse of time to cure or both, would constitute a
material default in the due performance and observance of any
obligation, agreement, term, covenant, or condition contained in any
indenture,
17
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company is a party or to which
the Company, any of its Subsidiaries, or any of their respective
properties is subject.
(xiii) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation
against the Company, its Subsidiaries or any of the officers and
directors of the Company or its Subsidiaries or to which the
properties, assets or rights of the Company or its Subsidiaries are
subject, before or brought by any court or governmental agency or body
or board of arbitrators, that are required to be described in the
Registration Statement or the Prospectus but are not described as
required.
(xiv) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown and
there are no contracts, leases or other documents known to such
counsel of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required.
(xv) The Common Stock has been approved for trading on the
Nasdaq National Market.
(xvi) The Registration Statement and any 462(b) Registration
Statement have become effective under the 1933 Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any 462(b) Registration Statement has
been issued and no proceeding for that purpose has been instituted or
is pending or contemplated under the 1933 Act. Other than financial
statements and other financial and operating data and schedules
contained therein, as to which counsel need express no opinion, the
Registration Statement, any 462(b) Registration Statement, all
Preliminary Prospectuses, the Prospectus and any amendment or
supplement thereto, appear on their face to conform as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(xvii) The Company is not, or solely as a result of the
consummation of the transactions contemplated hereby will not become,
an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(xviii)The descriptions in the Prospectus of statutes,
regulations, legal or governmental proceedings are accurate and
present fairly a summary of the information required to be shown under
the 1933 Act and the 1933 Act Regulations. The information in the
Prospectus under the caption "Shares Eligible for Future Sale," to the
extent that it constitutes matters of law or legal conclusions, has
been reviewed by such counsel, is correct and presents fairly the
information required to be disclosed therein under the 1933 Act
and the 1933 Act
18
Regulations.
Such counsel also shall state that they have no reason to believe that
the Registration Statement, any 462(b) Registration Statement or any
further amendment thereto made prior to the Closing Time or the Date of
Delivery, as the case may be, on its effective date and as of the Closing
Time or the Date of Delivery, as the case may be, contained or contains any
untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment
or supplement thereto made prior to the Closing Time or the Date of
Delivery, as the case may be, as of its issue date and as of the Closing
Time or the Date of Delivery, as the case may be, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that
such counsel need express no belief regarding the financial statements and
related schedules and other financial data contained in the Registration
Statement, any 462(b) Registration Statement, any amendment thereto, or the
Prospectus, or any amendment or supplement thereto).
(c) At the Closing Time, you shall have received a favorable opinion
from Jones, Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇, L.L.P., counsel
for the Underwriters, dated as of the Closing Time, with respect to the
incorporation of the Company, the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass on such matters.
(d) At the Closing Time, (i) the Registration Statement, any 462(b)
Registration Statement, and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations; the Company shall have complied in all material respects with
Rule 430A (if it shall have elected to rely thereon) and neither the
Registration Statement, any 462(b) Registration Statement, nor the
Prospectus, as they may then be amended or supplemented, shall contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement, any
material adverse change in the business, prospects, properties, assets,
results of operations or condition
19
(financial or otherwise) of the Company, whether or not arising in the
ordinary course of business, (iii) no action, suit or proceeding at law or
in equity shall be pending or, to the best of the Company's knowledge,
threatened against the Company that would be required to be set forth in
the Prospectus other than as set forth therein and no proceedings shall be
pending or, to the best knowledge of the Company, threatened against the
Company before or by any federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding
could materially adversely affect the business, prospects, assets, results
of operations or condition (financial or otherwise) of the Company, other
than as set forth in the Prospectus, (iv) the Company shall have complied
with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time, and (v) the
representations and warranties of the Company set forth in Section 1 shall
be accurate as though expressly made at and as of the Closing Time. At the
Closing Time, you shall have received a certificate executed by the
President and Chief Financial Officer of the Company dated as of the
Closing Time, to such effect and with respect to the following additional
matters: (A) the Registration Statement has become effective under the 1933
Act, and no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus has been
issued, and no proceedings for that purpose have been instituted or are
pending or, to the best of their knowledge, threatened under the 1933 Act;
and (B) they have reviewed the Registration Statement and the Prospectus
and, when the Registration Statement and any 462(b) Registration Statement
became effective and at all times subsequent thereto up to the delivery of
such certificate, the Registration Statement, any 462(b) Registration
Statement and the Prospectus and any amendments or supplements thereto
contained all statements and information required to be included therein or
necessary to make the statements therein not misleading and neither the
Registration Statement, any 462(b) Registration Statement, nor the
Prospectus nor any amendment or supplement thereto included any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and, since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amended or
supplemented Prospectus that has not been so set forth.
(e) You shall have received from Deloitte & Touche LLP letters dated,
respectively, the date hereof (or, if the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement,
dated such effective date and the date of this Agreement) and the Closing
Time and the Date of Delivery, in form and substance satisfactory to you,
to the effect set forth in Annex I hereto. In the event that the letters
referred to in this subsection set forth any changes, decreases or
increases in the items specified in paragraphs iii and iv of Annex I, it
shall be a further condition to the obligations of the Underwriters that
(i) such letters shall be accompanied by a written explanation by the
Company as to the significance thereof, unless the Underwriters deem such
explanation unnecessary, and (ii) such changes, decreases or increases do
not, in your sole judgment, make it impracticable or inadvisable to proceed
with the purchase, sale and delivery of the Shares as contemplated by the
Registration Statement, as amended as of the date of such letter.
(f) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
request for the purpose of enabling them to pass upon the issuance and sale
of the Shares as contemplated in this Agreement and the matters referred to
in Section 5(c) and in order to evidence the accuracy and completeness of
any of the representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment of
any of the conditions herein contained; and all proceedings taken by the
Company at or prior to the Closing Time in connection with the
authorization, issuance
20
and sale of the Shares as contemplated in this Agreement shall be
reasonably satisfactory in form and substance to you and to counsel for the
Underwriters. The Company will furnish you with such number of conformed
copies of such opinions, certificates, letters and documents as you shall
reasonably request.
(g) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(h) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change
in economic or political conditions the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Shares or enforce contracts for the sale of the
Shares; (ii) trading in any securities of the Company has been suspended by
the Commission or by the Nasdaq National Market, or if trading generally on
the New York Stock Exchange or in the over-the-counter market has been
suspended, or limitations on prices for trading (other than limitations on
hours or numbers of days of trading) have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or the NASD or
by order of the Commission or any other governmental authority; (iii) there
has been any downgrading in the rating of any of the Company's debt
securities or preferred stock by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the ▇▇▇▇
▇▇▇); (iv) a banking moratorium has been declared by federal or New York or
Tennessee authorities; (v) any federal or state statute, regulation, rule
or order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which in your reasonable
opinion materially adversely affects or will materially adversely affect
the business or operations of the Company; or (vi) any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without
liability of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Section 6 shall
remain in effect. The several obligations of the Underwriters to purchase
Option Shares hereunder are subject to the satisfaction on and as of any
Date of Delivery for Option Shares of the conditions set forth in this
Section 5, except that, if any Date of Delivery for Option Shares is other
than the Closing Time, the certificates, opinions and letters referred to
in paragraphs (b), (c), (d), (e) and (f) shall be revised to reflect the
sale of Option Shares.
Section 6. Indemnification and Contribution.
(a) The Company and each Shareholder, jointly and severally, shall
21
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject under the 1933 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in (A) any Preliminary Prospectus, the
Registration Statement, any 462(b) Registration Statement or the
Prospectus, or any amendment or supplement thereto, or (B) any application
or other document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"), or
(ii) arise out of or are based upon the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement, any 462(b)
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any Application 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; provided, however, that
(i) neither the Company nor the Shareholders shall 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 or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, any 462(b) Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter expressly for use therein; (ii) the liability of each
Shareholder to the Underwriters hereunder shall be limited to the
following amounts: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, $______; ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
$______; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Court, $______; The ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr.
Trust, $______; The ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Trust, $______; The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Trust, $______; The ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust, $______; The
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Court Trust, $______; and The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Court Trust,
$______; and (iii) while notice of any claim under this Section 6(a) shall
be given by an indemnified party to each Shareholder in accordance with
Section 6(c), no such claim shall be pursued against any Shareholder so
long as each indemnified party has received the full benefit of compliance
by the Company with all of its obligations to each indemnified party
pursuant to this Section 6, including reimbursement for all losses, claims,
damages and liabilities of such indemnified party as they arise or are
incurred. The Company will also indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any representation, warranty
or covenant of the Company contained herein. In addition to its other
obligations under this Section 6(a), the Company agrees that, as an interim
measure during the pendency of any such claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section
6(a), it will reimburse the Underwriters on a monthly basis for all
reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations of
the Company to reimburse the Underwriters for such
22
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction; provided, however, that
the obligation of the Company to make any such reimbursements shall be
subject to receipt from the Underwriters of an undertaking to return any
such reimbursements to the extent that it is determined by a court of
competent jurisdiction or an arbitrator appointed in accordance with
Section 6(d) that such indemnification of the Underwriters by the Company
is not permitted. Any such interim reimbursement payments that are not
made to an Underwriter within 30 days of receipt of a request for
reimbursement shall bear interest at the prime rate (or reference rate or
other commercial lending rate for borrowers of the highest credit standing)
published from time to time by The Wall Street Journal (the "Prime Rate")
from the date of such request. This indemnity agreement shall be in
addition to any liabilities that the Company may otherwise have. Neither
the Company, nor the Shareholders shall, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened action or claim or related cause of
action or portion of such cause of action in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is
a party to such action or claim), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all
liability arising out of such action or claim (or related cause of action
or portion thereof).
The indemnity agreement in this Section 6(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of each
person, if any, who controls any Underwriter within the meaning of the 1933
Act to the same extent such indemnity agreement applies to the
Underwriters.
(b) Each Underwriter, severally but not jointly, will indemnify and
hold harmless the Company and the Shareholders against any losses, claims,
damages or liabilities to which the Company and the Shareholders may become
subject, under the 1933 Act, or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any breach of any warranty or covenant by such Underwriter
herein contained or any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, any 462(b) Registration Statement or the Prospectus, or any
amendment or supplement thereto, 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, 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 any Preliminary Prospectus, the Registration
Statement, the 462(b) Registration Statement or the Prospectus or any such
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such Underwriter expressly
for use therein; and will reimburse the Company and the Shareholders for
any legal or other expenses reasonably incurred by either the Company or
the Shareholders in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to its other
obligations under this Section 6(b), the Underwriters agree that, as an
interim measure during the pendency of any such claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or
23
any alleged statement or omission, described in this Section 6(b), they
will reimburse the Company or the Shareholders on a monthly basis for all
reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a determination by a
court of competent jurisdiction or an arbitrator appointed in accordance
with Section 6(d) as to the propriety and enforceability of their
obligation to reimburse either the Company or the Shareholders for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company or the Shareholders
within 30 days of receipt of a request for reimbursement, and all
appropriate documentation, shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement shall be in addition to any
liabilities that the Underwriters may otherwise have. No Underwriter will,
without the prior written consent of the Company and the Shareholders,
settle or compromise or consent to the entry of judgment in any pending or
threatened action or claim or related cause of action or portion of such
cause of action in respect of which indemnification may be sought hereunder
(whether or not the Company or the Shareholders are parties to such action
or claim), unless such settlement, compromise or consent includes an
unconditional release of the Company and the Shareholders from all
liability arising out of such action or claim (or related cause of action
or portion thereof).
The indemnity agreement in this Section 6(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
officer and director of the Company who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the
1933 Act to the same extent such indemnity agreement applies to the
Company.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; no
indemnification provided for in subsection (a) or (b) shall be available
to any party who shall fail to give notice as provided in this subsection
(c) if the party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was prejudiced by the failure
to give such notice, but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability that it may have
to any indemnified party otherwise than under Section 6. In case any such
action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall
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
(which consent shall not be unreasonably withheld), 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 shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
24
indemnified party in connection with the defense thereof other than
reasonable costs of investigation, except that if the indemnified party has
been advised by counsel in writing that there are one or more defenses
available to the indemnified party which are different from or additional
to those available to the indemnifying party, then the indemnified party
shall have the right to employ separate counsel and in that event the
reasonable fees and expenses of such separate counsel for the indemnified
party shall be paid by the indemnifying party; provided, however, that the
indemnifying party shall only be obligated to pay the reasonable fees and
expenses of a single law firm (and any reasonably necessary local counsel)
employed by all of the indemnified parties. 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.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Section 6(a) and (b)
hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts
shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted pursuant to the Code of Arbitration Procedure of the
National Association of Securities Dealers, Inc. Any such arbitration must
be commenced by service of a written demand for arbitration or a written
notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration does not make such
designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 6(a) and (b) hereof and will not resolve
the ultimate propriety or enforceability of the obligation to indemnify for
expenses that is created by the provisions of Sections 6(a) and (b).
(e) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 6 is
for any reason judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the right of appeal) to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Shareholders, on the one hand, and the Underwriters, on the
other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity incurred
by the Company and the Shareholders, and one or more of the Underwriters,
as incurred, in such proportions that (a) the Underwriters are responsible
pro rata for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears
to the aggregate public offering price (before deducting expenses)
appearing thereon, and (b) the Company and the Shareholders are responsible
for the balance; provided, however, that no person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation; provided, further, that if the
allocation provided above is not permitted by applicable law, the Company
and the
25
Shareholders, on the one hand, and the Underwriters, on the other hand,
shall contribute to the aggregate losses in such proportion as is
appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company and the Shareholders, on the one
hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
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 and the Shareholders, on the one hand,
or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Shareholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to
this Section 6(e) 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 which does not take account of the equitable
considerations referred to above in this Section 6(e). The amount paid or
payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending such action or claim. Notwithstanding the
provisions of this Section 6(e), (i) no Shareholder shall be required to
contribute any amount in excess of the aggregate amount of cash
distributions received by such Shareholder from the Company from and after
January 1, 1998 through and including the Closing Time and (ii) 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 which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The Underwriters' obligations in this Section 6(e) to contribute
are several in proportion to their respective underwriting obligations and
not joint. For purposes of this Section 6(e), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter, and each
officer and director of the Company who signed the Registration Statement,
and each person, if any, who controls the Company, within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as
the Company.
Section 7. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other statements of
the Company or its respective officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or controlling person, and
will survive delivery of and payment for the Shares or termination of this
Agreement.
Section 8. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to Sections 4
and 6 and, as to all other provisions, (i) if at the time of execution of
this Agreement the
26
Registration Statement has not become effective, at 10:00 a.m. New York,
New York time, on the first full business day following the effectiveness
of the Registration Statement, or (ii) if at the time of execution of this
Agreement the Registration Statement has been declared effective, at 10:00
a.m. New York, New York time on the first full business day following the
date of execution of this Agreement; but this Agreement shall nevertheless
become effective at such earlier time after the Registration Statement
becomes effective as you may determine on and by notice to the Company or
by release of any of the Shares for sale to the public. For the purposes of
this Section 8, the Shares shall be deemed to have been so released upon
the release of publication of any newspaper advertisement relating to the
Shares or upon the release by you of telegrams (i) advising the
Underwriters that the Shares are released for public offering, or (ii)
offering the Shares for sale to securities dealers, whichever may occur
first. By giving notice before the time this Agreement becomes effective,
you, as representative of the several Underwriters, or the Company, may
prevent this Agreement from becoming effective, without liability of any
party to any other party, except that the Company shall remain obligated to
pay costs and expenses to the extent provided in Section 4 hereof.
(b) You may terminate this Agreement, by notice to the Company, at any
time at or prior to the Closing Time (i) in accordance with the final
paragraph of Section 5 of this Agreement; (ii) if there has been since the
respective dates as of which information is given in the Registration
Statement, any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
prospects, management, properties, assets, results of operations or
condition (financial or otherwise) of the Company, whether or not arising
in the ordinary course of business; (iii) if there has occurred or
accelerated any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions the effect
of which on the financial markets of the United States is such as to make
it, in your judgment, impracticable to market the Shares or enforce
contracts for the sale of the Shares; (iv) if trading in any securities of
the Company has been suspended by the Commission or by the Nasdaq National
Market or if trading generally on the New York Stock Exchange or in the
over-the-counter market has been suspended, or limitations on prices for
trading (other than limitations on hours or numbers of days of trading)
have been fixed, or maximum ranges for prices for securities have been
required, by such exchange or the NASD or by order of the Commission or any
other governmental authority; (v) if there has been any downgrading in the
rating of any of the Company's debt securities; preferred stock by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) of the 1933 Act Regulations); (vi) if a banking
moratorium has been declared by federal or New York or Tennessee
authorities; (vii) any federal or state statute, regulation, rule or order
of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which in your reasonable opinion
materially adversely affects or will materially adversely affect the
business or operations of the Company; or (viii) any action has been taken
by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States.
(c) If this Agreement is terminated pursuant to this Section 8, such
27
termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Section 6 shall remain in effect.
Section 9. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Shares that it
or they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 36 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 36-hour period, then:
(a) If the aggregate number of Firm Shares which are Defaulted
Securities does not exceed 10% of the aggregate number of Firm Shares to be
purchased pursuant to this Agreement, the non-defaulting Underwriters shall
be obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligation proportions bear to the
underwriting obligations of all non-defaulting Underwriters; and
(b) If the aggregate number of Firm Shares which are Defaulted
Securities exceeds 10% of the aggregate number of Firm Shares to be
purchased pursuant to this Agreement, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus that
may thereby be made necessary.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9.
Section 10. Default by the Company. If the Company shall fail at the
Closing Time to sell and deliver the aggregate number of Firm Shares that it is
obligated to sell, then this Agreement shall terminate without any liability on
the part of any non-defaulting party, except to the extent provided in Section 4
and except that the provisions of Section 6 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect to such default.
Section 11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or
28
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇ (with a copy sent in
the same manner to Jones, Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇,
L.L.P., ▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇; and notices to the Company shall be directed to it
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. (with a copy sent in the same manner to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.,
4200 Texas Commerce Tower, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇).
Section 12. Parties. This Agreement is made solely for the benefit of and
is binding upon the Underwriters, the Company and, to the extent provided in
Section 6, the Shareholders, any person controlling the Company or any of the
Underwriters, the officers and directors of the Company who have signed the
Registration Statement, and their respective executors, administrators,
successors and assigns. Subject to the provisions of Section 6, no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from any of the several Underwriters of the Shares.
All of the obligations of the Underwriters hereunder are several and not
joint.
Section 13. Governing Law and Time. This Agreement shall be governed by
the laws of the State of Tennessee. Specified time of the day refers to United
States Eastern Time. Time shall be of the essence of this Agreement.
Section 14. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
[LEFT BLANK INTENTIONALLY]
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc., on behalf of each of the Underwriters,
this instrument will become a binding agreement among the Company, and the
several Underwriters in accordance with its terms. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in the Master Agreement among Underwriters, a copy of
which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
▇▇▇▇▇▇ INDUSTRIES, INC.
By:_____________________________
Name:___________________________
Title:__________________________
The undersigned Shareholders of ▇▇▇▇▇▇ Industries, Inc. do hereby join in
this Underwriting Agreement solely for the purposes of the agreements set forth
in Section 6 hereof.
SHAREHOLDERS:
-----------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Court
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
30
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, JR. TRUST
--------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Trustee
THE ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ TRUST
--------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Trustee
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST
--------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Trustee
THE ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST
--------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Trustee
THE ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ COURT TRUST
--------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Court, Trustee
31
▇▇▇▇▇ ▇▇▇▇▇▇▇ COURT TRUST
-----------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Court, Trustee
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first written above:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
By:____________________________
(Authorized Representative)
On behalf of the Underwriters
32
SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc...........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc........................
Total........................................
33