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DRAFT: NOVEMBER 11, 1997
9,600,000 SHARES
IRI INTERNATIONAL CORPORATION
COMMON STOCK
U.S. UNDERWRITING AGREEMENT
▇▇▇▇▇▇ BROTHERS INC. November __, 1997
HOWARD, WEIL, LABOUISSE, ▇▇▇▇▇▇▇▇▇▇ INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
CREDIT LYONNAIS SECURITIES (USA), INC.
As Representatives of
the several U.S. Underwriters
named in Schedule 1
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
IRI International Corporation, a Delaware corporation (the
"Company"), and certain stockholders of the Company named in Schedule 2 hereto
(the "Selling Stockholders"), propose to sell to the several Underwriters named
in Schedule 1 hereto (the "U.S. Underwriters") an aggregate of 9,600,000 shares
(the "Firm Shares") of the Company's common stock, par value $.01 per share (the
"Common Stock"). Of the 9,600,000 Firm Shares, 7,200,000 are being sold by the
Company and an aggregate of 2,400,000 are being sold by the Selling
Stockholders. In addition, the Company and the Selling Stockholders propose to
grant to the U.S. Underwriters an option to purchase up to an additional
1,440,000 shares of Common Stock on the terms and for the purposes set forth in
Section 3 (the "Option Shares"). The Firm Shares and the Option Shares, if
purchased, are hereinafter collectively called the "Shares." This is to confirm
the agreement concerning the purchase of the Shares from the Company and the
Selling Stockholders by the U.S. Underwriters.
It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the date hereof
(the "International Underwriting Agreement") providing for the sale by the
Company and the Selling Stockholders of an aggregate of 2,400,000 shares of
Common Stock (plus options to purchase up to 360,000 additional shares of Common
Stock to cover over-allotments, if any, thereunder) (the "International Shares")
through arrangements with certain underwriters outside the United States (the
"International Managers"), for whom ▇▇▇▇▇▇ Brothers International (Europe),
Credit Lyonnais Securities, Howard, Weil, Labouisse, ▇▇▇▇▇▇▇▇▇▇ Incorporated and
Prudential-Bache Securities (U.K.) Inc. are acting as lead managers. The U.S.
Underwriters and the International Managers simultaneously are entering into
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an agreement between the U.S. and international underwriting syndicates (the
"Agreement Between U.S. Underwriters and International Managers") which provides
for, among other things, the transfer of shares of Common Stock between the two
syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Common Stock contemplated by the foregoing, one
relating to the Shares and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for certain
substitute pages as included in the registration statement and amendments
thereto referred to below. Except as used in Sections 3, 4, 5, 11 and 12 herein,
and except as the context may otherwise require, references herein to the Shares
shall include all the shares which may be sold pursuant to either this Agreement
or the International Underwriting Agreement, and references herein to any
prospectus whether in preliminary or final form, and whether as amended or
supplemented, shall include both the U.S. and the international versions
thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, each U.S. Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-35117) with
respect to the Shares (i) has been prepared by the Company in conformity with
the requirements of the United States Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and Regulations")
of the United States Securities and Exchange Commission (the "Commission")
thereunder, (ii) has been filed with the Commission under the Securities Act and
(iii) either has become effective under the Securities Act and is not proposed
to be amended or is proposed to be amended by amendment or post-effective
amendment. If the Company does not propose to amend such registration statement
and if any post-effective amendment to such registration statement has been
filed with the Commission prior to the execution and delivery of this Agreement,
the most recent such amendment has been declared effective by the Commission.
Copies of such registration statement as amended to date have been delivered by
the Company to you as the representatives (the "Representatives") of the U.S.
Underwriters. As used in this Agreement, "Effective Time" means the date and the
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time, including,
if the Effective Date is on or before the date of this Agreement, all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations ("Rule 424(b)") in accordance with
Section 6(a) hereof and deemed to be a part thereof as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) or, if the Effective Date is
after the date of this Agreement, the final prospectus in the form heretofore
delivered by the Company to the Representatives, with any changes made thereto
by the Company with the consent of the Representatives, as the case may be. If
it is contemplated at the time this Agreement is executed that
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a registration statement will be filed pursuant to Rule 462(b) under the
Securities Act before the offering of the Common Stock may commence, the term
"Registration Statement" as used in this Agreement includes such registration
statement.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. Each Preliminary Prospectus, as of the
date thereof, conformed in all respects to the requirements of the Securities
Act and the Rules and Regulations and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that no
representation or warranty is made as to information contained in or omitted
from any Preliminary Prospectus in reliance upon, and in conformity with,
written information furnished to the Company through the Representatives by or
on behalf of any U.S. Underwriter specifically for inclusion therein.
(c) If the Effective Date is on or before the date of this
Agreement, (i) the Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will when they become effective or are filed with the Commission or
are first used to confirm sales of the Shares, as the case may be, conform to
the requirements of the Securities Act and the Rules and Regulations, (ii) the
Registration Statement and any amendment thereto does not, and will not, as of
the applicable effective date, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) the Prospectus and any
amendment or supplement thereto will not, as of the applicable filing date or as
of the first date of its use to confirm sales of the Shares, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Effective Date
is after the date of this Agreement, (i) the Registration Statement and the
Prospectus and any further amendments or supplements thereto will, when they
become effective or are filed with the Commission or are first used to confirm
sales of the Shares, as the case may be, conform to the requirements of the
Securities Act and the Rules and Regulations, (ii) the Registration Statement
and any amendment thereto will not, as of the applicable Effective Date, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and (iii) the Prospectus and any amendment or supplement thereto will
not, as of the applicable filing date or as of the first date of their use to
confirm sales of the Shares, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. In addition, each of the statements made
in such documents within the coverage of Rule 175(b) of the Rules and
Regulations was made or will be made by the Company with a reasonable basis and
in good faith. Notwithstanding the foregoing, no representation or warranty is
made as to information contained in or omitted from the Registration Statement
or the Prospectus or any amendment or supplement thereto in reliance upon, and
in conformity with, written information furnished to the Company through the
Representatives by or on behalf of any U.S. Underwriter specifically for
inclusion therein. There is no contract or
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document required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed as required.
(d) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and conduct its
business and is duly qualified and registered as a foreign corporation for the
transaction of business and is in good standing as a foreign corporation under
the laws of each jurisdiction in which the character of the business conducted
by it or the location of the properties owned, leased or operated by it make
such qualification or registration necessary except where the failure to qualify
or register or to be in good standing would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or other),
results of operations, business or prospects of the Company and the Subsidiaries
(as defined below) taken as a whole. IRI International Corporation, a former
Delaware corporation and former subsidiary of the Company ("IRI"), immediately
prior to its merger with and into the Company (the "Merger") on October __, 1997
(the "Merger Date"), was duly organized and validly existing in good standing
under the laws of the State of Delaware with full corporate power and authority
to own, lease and operate its properties and conduct its business and was duly
qualified and registered as a foreign corporation for the transaction of
business and was in good standing as a foreign corporation under the laws of
each jurisdiction in which the character of the business conducted by it or the
location of the properties owned, leased or operated by it made such
qualification or registration necessary except where the failure to qualify or
register or to be in good standing would not, individually or in the aggregate,
have had a material adverse effect on the condition (financial or other),
results of operations, business or prospects of IRI and its subsidiaries taken
as a whole. Immediately prior to the Merger Date, the business of the Company
was conducted only through IRI, together with its subsidiaries. Unless the
context requires otherwise, all references in this Agreement to "the Company"
shall include IRI prior to the Merger Date.
(e) Schedule 3 hereto is a complete and accurate schedule of (i) the
names of all corporations, partnerships, limited liability companies and joint
ventures (the "Subsidiaries") in which the Company has an equity interest at the
time of execution and delivery of this Agreement and (ii) information indicating
the jurisdiction of organization of each such entity. With the exception of
▇▇▇▇▇▇▇▇ International, Ltd., a Delaware corporation ("▇▇▇▇▇▇▇▇"), none of the
Subsidiaries (i) is a "significant subsidiary" as such term is defined in Rule
405 of the Rules and Regulations or (ii) conducts operations or has any assets
or indebtedness or other liabilities, contingent or otherwise, which are
material to the condition (financial or other), results of operations, business
or prospects of the Company and the Subsidiaries taken as a whole. ▇▇▇▇▇▇▇▇ is
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full power and authority to own, lease and operate its
properties and to conduct its business, and is duly registered and qualified to
do business and is in good standing in each jurisdiction, domestic or foreign,
in which such registration or qualification or good standing is required to
conduct its business (whether by reason of the ownership or leasing of property,
the conduct of its business or otherwise), except where the failure to qualify
or register or to be in good standing would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or other),
results of operations, business or prospects of the Company and the Subsidiaries
taken as a whole.
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All the outstanding shares of capital stock of ▇▇▇▇▇▇▇▇ have been duly
authorized and validly issued and are fully paid and nonassessable; and all of
such shares of capital stock are owned by the Company directly, or indirectly
through one of the other Subsidiaries, free and clear of any lien, adverse
claim, security interest or other encumbrance, other than any lien, security
interest or encumbrance arising in connection with or resulting from the Credit
Agreement, dated March 31, 1997, among the Company, IRI, the several lenders
from time to time parties thereto, Credit Lyonnais New York Branch and ▇▇▇▇▇▇
Commercial Paper Inc.
(f) The authorized and outstanding capital stock of the Company is
as set forth in the Prospectus. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and were validly issued
and are fully paid and nonassessable. The Shares to be issued and sold by the
Company to the U.S. Underwriters and the International Managers have been duly
and validly authorized and, when issued and delivered against payment therefor
as provided herein and in the International Underwriting Agreement, will be duly
and validly issued, fully paid and nonassessable. The Shares, when issued and
delivered against payment therefor as provided herein and in the International
Underwriting Agreement, will conform to the description thereof contained under
the caption "Description of Capital Stock" in the Prospectus.
(g) There are no preemptive rights or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, any shares
of Common Stock pursuant to the Company's certificate of incorporation, bylaws
or other governing documents or any agreement or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may be
bound, and, except as described in the Prospectus, there are no outstanding
options, warrants or rights to purchase any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
any shares of capital stock of the Company.
(h) The Company has all requisite power and authority to execute and
deliver this Agreement and the International Underwriting Agreement and to
issue, sell and deliver the Shares in accordance with and upon the terms and
conditions set forth in this Agreement, the International Underwriting Agreement
and in the Registration Statement and Prospectus. At each Delivery Date (as
defined in Section 5 hereof), all action required to be taken by the Company for
the authorization, issuance, sale and delivery of the Shares and the
consummation of the transactions contemplated by this Agreement and the
International Underwriting Agreement shall have been validly taken. This
Agreement and the International Underwriting Agreement have been duly and
validly authorized, executed and delivered by the Company.
(i) The execution, delivery and performance of this Agreement and
the International Underwriting Agreement by the Company and the consummation of
the transactions contemplated hereby and thereby will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute such a default) under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or ▇▇▇▇▇▇▇▇
is a party or by which any of them is bound or to which any of the property or
assets of any of them is subject, (ii) result in any violation of the provisions
of the certificate of incorporation, bylaws or other governing
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documents of the Company or ▇▇▇▇▇▇▇▇, (iii) result in the violation of any law
or statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or ▇▇▇▇▇▇▇▇ or any of their
properties or assets or (iv) result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company or
▇▇▇▇▇▇▇▇
(j) Except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the securities or "Blue Sky" laws
of certain jurisdictions and applicable state or foreign securities laws in
connection with the purchase and distribution of the Shares by the U.S.
Underwriters and the International Managers, no consent, approval, authorization
or order of, or filing or registration with, any court or governmental agency or
body is required for the execution, delivery and performance of this Agreement
or the International Underwriting Agreement by the Company and the consummation
of the transactions contemplated hereby and thereby.
(k) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(l) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Securities Act.
(m) Neither the Company nor ▇▇▇▇▇▇▇▇ has sustained, since the date
of the latest audited financial statements included in the Prospectus, any
material loss or interference with its business from fire, explosion, flood,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute, or has become a party to or the subject of any material
litigation, court or governmental action, investigation, order or decree, in any
case otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Prospectus, there
has not been any change in the capital stock (other than in connection with the
Merger) or long-term debt, or any material change in short-term debt, of the
Company or ▇▇▇▇▇▇▇▇ or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
operations, business, prospects, management, capitalization, financial
condition, results of operations or net worth of the Company and ▇▇▇▇▇▇▇▇,
otherwise than as set forth or contemplated in the Prospectus.
(n) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and the Subsidiaries, whose reports appear in the
Preliminary Prospectus and the Prospectus and who have delivered the initial
letter referred to in Section 9(h) hereof, are independent public accountants
with respect to each of the Company and the Subsidiaries as required
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by the Securities Act and the Rules and Regulations. The financial statements
(including the related notes) included in the Registration Statement, any
Preliminary Prospectus and the Prospectus present fairly the financial
condition, results of operations and cash flows of the entities purported to be
shown thereby at the dates and for the periods indicated and have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The selected historical
financial data of the Company included in the Prospectus under the caption
"Selected Financial Data" are fairly stated in relation to the historical
financial statements from which they have been derived. The pro forma financial
statements set forth in the Registration Statement, any Preliminary Prospectus
and the Prospectus (the "pro forma financial statements") have been prepared in
accordance with the applicable accounting requirements of Rule 11-02 of
Regulation S-X; the pro forma adjustments reflected in the pro forma financial
statements have been properly applied to the historical amounts in compilation
of such statements; and the assumptions used in the preparation of the pro forma
financial statements are, in the opinion of the Company, reasonable.
(o) The Company and ▇▇▇▇▇▇▇▇ have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, free and clear of all liens, claims, encumbrances and
title defects except (i) as described in the Prospectus or (ii) such as do not
materially interfere with the use of such properties as they have been used in
the past and are proposed to be used in the future as described in the
Prospectus; and all real property and buildings held under lease by the Company
and ▇▇▇▇▇▇▇▇ are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and
▇▇▇▇▇▇▇▇.
(p) Neither the Company nor ▇▇▇▇▇▇▇▇ is (i) in breach or violation
of its charter, bylaws or other governing documents or of any law or statute or
order, rule or regulation of any court or governmental agency or body having
jurisdiction over it or (ii) in default (and no event has occurred which, with
notice or lapse of time or both, would constitute such a default) in the due
performance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its properties
are subject, except, in either case, where any such breach, violation or default
would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or other), results of operations, business or prospects
of the Company and the Subsidiaries taken as a whole. To the knowledge of the
Company, no third party to any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party or by
which it is bound or to which any of its properties are subject is in default
under any such agreement.
(q) No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Shares, or suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any Preliminary
Prospectus or suspends the sale of the Shares in any jurisdiction in which the
Shares are qualified pursuant to Section 6(h) hereof; no injunction, restraining
order or order of any nature by a federal or state court of competent
jurisdiction has been issued with respect to the Company or any of the Selling
Stockholders which would prevent or suspend the issuance or sale of the Shares,
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the effectiveness of the Registration Statement or the use of any Preliminary
Prospectus in any jurisdiction in which the Shares are qualified pursuant to
Section 6(h) hereof; no action, suit or proceeding is pending against or, to the
best knowledge of the Company or the Subsidiaries, threatened against or
affecting any of the Company or the Subsidiaries before any court or arbitrator
or any governmental body, agency or official, domestic or foreign, which, if
adversely determined, would materially interfere with or adversely affect the
issuance of the Shares or in any manner draw into question the validity or the
subject matter of this Agreement or the International Underwriting Agreement or
the performance by the Company of its obligations hereunder and thereunder.
(r) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Company or the Subsidiaries,
threatened against the Company or the Subsidiaries or the Selling Stockholders
or any of their respective properties which, if determined adversely to such
person, would individually or in the aggregate have a material adverse effect on
the condition (financial or other), results of operations, business or prospects
of the Company and the Subsidiaries taken as a whole.
(s) Except as described in the Prospectus, the Company and ▇▇▇▇▇▇▇▇
own or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others.
(t) The Company and ▇▇▇▇▇▇▇▇ carry, or are covered by, insurance in
such amounts and covering such risks as is, in the Company's reasonable
judgment, adequate for the conduct of their respective businesses and the value
of their respective properties. Neither the Company nor ▇▇▇▇▇▇▇▇ has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance; and all such insurance is outstanding and duly in force on the
date hereof and will be outstanding and duly in force on each Delivery Date.
(u) Neither the Company nor any of the Subsidiaries is, or at either
Delivery Date will be, (a) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the United
States Public Utility Holding Company Act of 1935, as amended, or (b) an
"investment company" or a company "controlled by" an "investment company" within
the meaning of the United States Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations thereunder.
(v) As of each Delivery Date, the Company and ▇▇▇▇▇▇▇▇ will possess,
and will operate in compliance in all material respects with, all certificates,
authorizations or permits issued by the appropriate local, state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
currently (or, as described or contemplated in the Prospectus, to be) operated
by them, except for such certificates, authorizations or permits which, if not
obtained, would not have,
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individually or in the aggregate, a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the
Company and the Subsidiaries taken as a whole; and neither the Company nor
▇▇▇▇▇▇▇▇ has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
(w) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances by the Company or the Subsidiaries (or, to the
knowledge of the Company or the Subsidiaries or any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or the Subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material
adverse effect on the condition (financial or other), results of operations,
business or prospects of the Company and the Subsidiaries taken as a whole;
there has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or the Subsidiaries or with
respect to which the Company or the Subsidiaries have knowledge, except for any
such spill, discharge, leak, emission, injection, escape, dumping or release
which would not have or would not be reasonably likely to have, individually or
in the aggregate, a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and the
Subsidiaries taken as a whole; and the terms "hazardous wastes," "toxic wastes,"
"hazardous substances" and "solid wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(x) Each of the Company and the Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the United States
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or the Subsidiaries would have any
liability; the Company and the Subsidiaries have not incurred and do not expect
to incur liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the United
States Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company and the Subsidiaries would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(y) Each of the Company and the Subsidiaries has filed all federal,
state, local and foreign income and franchise tax returns required to be filed
through the date hereof (taking into account extensions of time to file) and has
paid all taxes due thereon, and no tax deficiency has been determined adversely
to the Company or the Subsidiaries which has had (nor do the Company or the
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Subsidiaries have any knowledge of any tax deficiency which, if determined
adversely to the Company or the Subsidiaries, might have) a material adverse
effect on the condition (financial or other), results of operations, business or
prospects of the Company and the Subsidiaries taken as a whole. None of the
Company, IRI or the Subsidiaries incurred any liability for federal, state,
local or foreign income, franchise or other taxes as a result of the Merger.
(z) The Merger was duly authorized by all necessary corporate action
on the part of the Company and IRI, including, to the extent required by
applicable law, all action by their respective boards of directors and
stockholders, and has become effective in accordance with Section 253 of the
General Corporation Law of the State of Delaware. The Merger did not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute such a default) under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company, IRI or ▇▇▇▇▇▇▇▇ is or was a party or by which any of them is
or was bound or to which any of the property or assets of any of them is or was
subject, except for any such conflicts, breaches, violations or defaults that
were validly waived prior to the consummation of the Merger, (ii) result in any
violation of the provisions of the certificate of incorporation, bylaws or other
governing documents of the Company, IRI or ▇▇▇▇▇▇▇▇, (iii) result in the
violation of any law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, IRI or
▇▇▇▇▇▇▇▇ or any of their properties or assets or (iv) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset
of the Company, IRI or ▇▇▇▇▇▇▇▇.
(aa) Neither of the Company nor the Subsidiaries (i) has taken, and
none of such persons shall take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Common Stock in violation of any law, rule or regulation
or (ii) since the initial filing of the Registration Statement, except as
contemplated by this Agreement, (A) has sold, bid for, purchased or paid anyone
any compensation for soliciting purchases of the Common Stock or (B) has paid
or, except as contemplated hereby, has agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(bb) The Shares have been approved for inclusion on the New York
Stock Exchange ("NYSE"), subject only to official notice of issuance.
(cc) From the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, neither the Company nor ▇▇▇▇▇▇▇▇ has (i) issued any securities
or granted any options to purchase any securities, (ii) incurred any liability
or obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(dd) Each of the Company and ▇▇▇▇▇▇▇▇ (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A)
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transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the recorded accountability for its assets is compared with existing assets at
reasonable intervals.
(ee) Neither the Company or any of the Subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of the Subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the United States Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(ff) No relationship, direct or indirect, exists between or among
the Company or the Subsidiaries, on the one hand, and any of the Selling
Stockholders or the directors, officers, other stockholders, customers or
suppliers of the Company or any of the Selling Stockholders, on the other hand,
which is required to be described in the Prospectus which is not so described.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder jointly (with respect to Sections 2(a)
and 2(m)) and severally (with respect to Sections 2(b) through 2(l)) represents,
warrants and agrees that:
(a) If the Effective Date is on or before the date of this
Agreement, to the knowledge of the Selling Stockholder (i) the Registration
Statement and any amendment thereto does not, and will not, as of the applicable
effective date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Prospectus and any amendment or
supplement thereto will not, as of the applicable filing date or as of the first
date of its use to confirm sales of the Shares, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If the Effective Date is after the
date of this Agreement, to the knowledge of the Selling Stockholder (i) the
Registration Statement and any amendment thereto will not, as of the applicable
Effective Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Prospectus and any amendment or
supplement thereto will not, as of the applicable filing date or as of the first
date of their use to confirm sales of the Shares, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus or any amendment
or supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company through the Representatives by or on behalf
of any U.S. Underwriter specifically for inclusion therein.
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12
(b) The Selling Stockholder has, and immediately prior to the each
Delivery Date will have, good and valid title to the Shares to be sold by the
Selling Stockholder hereunder and under the International Underwriting Agreement
on such date, free and clear of all liens, encumbrances, equities or claims; and
upon delivery of such Shares and payment therefor pursuant hereto and thereto,
good and valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several U.S. Underwriters and International
Managers. Except as described under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Prospectus, no person or group of
persons beneficially owns any shares of Common Stock owned by the Selling
Stockholder.
(c) The Selling Stockholder (other than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) has
placed in custody under a custody agreement (the "Custody Agreement" and,
together with all other similar agreements, the "Custody Agreements") with the
Company, as custodian (the "Custodian"), for delivery under this Agreement and
the International Underwriting Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company having an office or
correspondent in the United States or a member firm of the New York or American
Stock Exchanges) representing the Shares to be sold by the Selling Stockholder
hereunder and thereunder.
(d) The Selling Stockholder (other than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) has duly
and irrevocably executed and delivered a power of attorney (the "Power of
Attorney" and, together with all other similar agreements, the "Powers of
Attorney") appointing Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as attorney-in-fact, with full power
of substitution and resubstitution, and with full authority to execute and
deliver this Agreement and the International Underwriting Agreement and to take
such other action as may be necessary or desirable to carry out the provisions
hereof or thereof on behalf of the Selling Stockholder.
(e) The Selling Stockholder has full right, power and capacity to
enter into this Agreement, the International Underwriting Agreement and, where
applicable, the Power of Attorney and the Custody Agreement and to sell and
deliver the Shares in accordance with and upon the terms and conditions set
forth in this Agreement, the International Underwriting Agreement and the
Registration Statement and Prospectus. At each Delivery Date, all action
required to be taken by the Selling Stockholder for the authorization, sale and
delivery of the Shares and the consummation of the transactions contemplated by
this Agreement and the International Underwriting Agreement shall have been
validly taken. This Agreement, the International Underwriting Agreement and,
where applicable, the Power of Attorney and the Custody Agreement, have been
duly and validly authorized, executed and delivered by the Selling Stockholder.
(f) The execution, delivery and performance of this Agreement, the
International Underwriting Agreement and, where applicable, the Power of
Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby will not (i) conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute such an event) under, any
indenture, mortgage, deed of trust, loan
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13
agreement or other agreement or instrument to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound or to which any of the
property or assets of the Selling Stockholder is subject, (ii) result in any
violation of any law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling Stockholder or
the property or assets of the Selling Stockholder or (iii) result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Selling Stockholder.
(g) Except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, the securities or
"Blue Sky" laws of certain jurisdictions and applicable state or foreign
securities laws in connection with the purchase and distribution of the Shares
by the U.S. Underwriters and the International Managers, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the International Underwriting Agreement or,
where applicable, the Power of Attorney or the Custody Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(h) Except as described in the Prospectus, the Selling Stockholder
has not sold any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Securities Act.
(i) No action, suit or proceeding is pending against or, to the best
knowledge of the Selling Stockholder, threatened against or affecting the
Selling Stockholder before any court or arbitrator or any governmental body,
agency or official, domestic or foreign, which, if adversely determined, would
materially interfere with or adversely affect the issuance of the Shares or in
any manner draw into question the validity or the subject matter of this
Agreement or the International Underwriting Agreement or, where applicable, the
Power of Attorney or Custody Agreement, or the performance by the Selling
Stockholder of his obligations thereunder.
(j) To the extent that statements or omissions, if any, made in any
Preliminary Prospectus, the Prospectus or the Registration Statement or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by the Selling Stockholder
expressly for use therein, such Preliminary Prospectus, the Prospectus and the
Registration Statement and any amendments or supplements thereto, upon
effectiveness or filing with the Commission and at each Delivery Date, as the
case may be, did not or will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(k) The Selling Stockholder has not (i) taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might 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 the Shares or (ii) since the initial filing of the Registration
Statement, except as contemplated by this Agreement, (A) sold, bid for,
purchased or paid anyone
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any compensation for soliciting purchases of the Common Stock or (B) paid or,
except as contemplated hereby, agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(l) Any certificate signed by or on behalf of the Selling
Stockholder and delivered, pursuant to this Agreement or in connection with the
payment of the purchase price and delivery of the certificates for the Shares to
be sold by the Selling Stockholder hereunder, to the Underwriters or counsel to
the Underwriters shall be deemed a representation and warranty by the Selling
Stockholder to each of the Underwriters as to the matters covered thereby.
(m) The transfer of shares of Common Stock of the Company (then
named Energy Services International Ltd.) to Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ (collectively,
the "Initial Stockholders") from Energy Services International Limited, a
British Virgin Islands corporation ("ESI"), on or about March 27, 1997, was duly
and validly authorized by all necessary corporate and stockholder action, and
upon the consummation of such transfer, good and valid title to all of the
then-issued and outstanding shares of Common Stock of the Company passed to the
Initial Stockholders, free and clear of all liens, encumbrances, equities or
claims.
3. Purchase of the Shares by the U.S. Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 7,200,000 of the Firm
Shares and each Selling Stockholder hereby agrees to sell the number of Firm
Shares set opposite his name on Schedule 2 hereto, severally and not jointly, to
the several U.S. Underwriters, and each of the U.S. Underwriters, severally and
not jointly, agrees to purchase the number of Firm Shares set opposite that U.S.
Underwriter's name in Schedule 1 hereto. Each U.S. Underwriter shall be
obligated to purchase from the Company and from each Selling Stockholder that
number of Firm Shares which represents the same proportion of the number of Firm
Shares to be sold by the Company and by each Selling Stockholder, as the number
of Firm Shares set forth opposite the name of such U.S. Underwriter in Schedule
1 represents of the total number of Firm Shares to be purchased by all of the
U.S. Underwriters pursuant to this Agreement. The respective purchase
obligations of the U.S. Underwriters with respect to the Firm Shares shall be
rounded among the U.S. Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company and the Selling Stockholders grant to the
U.S. Underwriters an option to purchase up to an aggregate of 1,440,000 Option
Shares. Such option is granted solely for the purpose of covering
over-allotments in the sale of Firm Shares and is exercisable as provided in
Section 5 hereof. Option Shares shall be purchased severally for the account of
the U.S. Underwriters in proportion to the number of Firm Shares set opposite
the names of such U.S. Underwriters in Schedule 1 hereto. Of the total amount of
Option Shares purchased, one-half shall be issued, sold and delivered by the
Company and the other one-half shall be sold and delivered by the Selling
Stockholders in proportion to the number of Firm Shares set opposite the names
of such Selling Stockholders in Schedule 2 hereto. The respective purchase
obligations of each U.S. Underwriter with respect to the Option Shares shall be
adjusted by the Representatives so that no
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U.S. Underwriter shall be obligated to purchase Option Shares other than in 100
Share amounts. The price of both the Firm Shares and any Option Shares shall be
$ _____ per Share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Shares to be delivered on the First Delivery Date or the
Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Shares to be purchased on such Delivery Date as provided
herein and in the International Underwriting Agreement.
4. Offering of Shares by the U.S. Underwriters. Upon authorization
by the Representatives of the release of the Firm Shares, the several U.S.
Underwriters propose to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
Each U.S. Underwriter agrees that, except to the extent permitted by
the Agreement Between the U.S. Underwriters and International Managers, it will
not offer or sell any of the Shares outside the United States or Canada.
5. Delivery of and Payment for the Shares. Delivery of and payment
for the Firm Shares shall be made at such place as shall be determined by
agreement between the Representatives and the Company, at 10:00 A.M., New York
City time, on the fourth full Business Day (as defined in Section 17 hereof)
following the date of this Agreement or at such other date as shall be
determined by agreement between the Representatives and the Company. This date
and time are sometimes referred to as the "First Delivery Date." On the First
Delivery Date, the Company and the Selling Stockholders shall deliver or cause
to be delivered certificates representing the Firm Shares to the Representatives
for the account of each U.S. Underwriter against payment to or upon the order of
the Company and the Selling Stockholders of the purchase price by wire transfer
of immediately available funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each U.S. Underwriter hereunder. Upon delivery, the Firm
Shares shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full Business Days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Shares, the Company and the Selling
Stockholders shall make the certificates representing the Firm Shares available
for inspection by the Representatives in New York City, not later than 2:00
P.M., New York City time, on the Business Day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 3 may be exercised by written notice
being given to the Company and the Selling Stockholders by the Representatives.
Such notice shall set forth the aggregate number of Option Shares as to which
the option is being exercised, the names in which the Option Shares are to be
registered, the denominations in which the Option Shares are to be issued and
the date and time, as determined by the Representatives, when the Option Shares
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second Business Day
after the date on which the option shall have been exercised nor later than the
fifth Business Day after the date on which the option shall have been exercised.
The date and time the
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Option Shares are delivered are sometimes referred to as the "Second Delivery
Date," and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives, the Company and the Selling Stockholders) at 10:00 A.M., New
York City time, on the Second Delivery Date. On the Second Delivery Date, the
Company and the Selling Stockholders shall deliver or cause to be delivered the
certificates representing the Option Shares to the Representatives for the
account of each U.S. Underwriter against payment to or upon the order of the
Company and the Selling Stockholders of the purchase price by wire transfer of
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each U.S. Underwriter hereunder. Upon delivery, the Option
Shares shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Shares, the Company shall make the certificates representing the Option Shares
available for inspection by the Representatives in New York City, not later than
2:00 P.M., New York City time, on the Business Day prior to the Second Delivery
Date.
6. Further Agreements of the Company. The Company covenants and
agrees with each U.S. Underwriter:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
Business Day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) of the Rules
and Regulations; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the U.S. Underwriters an executed copy of the Registration Statement
as originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith;
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17
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the offering or
sale of the Shares or any other securities relating thereto and if at such time
any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request, to file
such document and to prepare and furnish without charge to each U.S. Underwriter
and to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended or supplemented Prospectus which
will correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company, the Selling Stockholders or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the U.S. Underwriters and obtain the consent
of the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and the Subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the Company
to its security holders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange or automated quotation system upon which the Shares may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act, or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
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complete the distribution of the Shares; provided that in no event shall the
Company be obligated in connection therewith to qualify as a foreign
corporation, or to execute a general consent to service of process;
(i) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (other than the issuance of shares of
Common Stock upon the exercise of currently outstanding options or options to be
granted on the First Delivery Date as described in the Prospectus) or securities
convertible into or exchangeable for Common Stock, or sell or grant options,
rights or warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc.; and to cause each stockholder of the Company (other than the Selling
Stockholders) and each Named Executive Officer (as such term is defined in the
Prospectus) to furnish to the Representatives, prior to the First Delivery Date,
a letter or letters, substantially in the form attached hereto as Exhibit A,
pursuant to which each such person shall agree not to, directly or indirectly,
(1) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.;
(j) Prior to the Effective Date, to apply for the inclusion of the
Shares on the NYSE and to use its best efforts to complete that inclusion,
subject only to official notice of issuance and evidence of satisfactory
distribution, prior to the First Delivery Date, and to take such action as shall
be necessary to comply with the rules and regulations of the NYSE with respect
to such Shares;
(k) To apply the net proceeds from the sale of the Shares being sold
by the Company as set forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither
the Company nor the Subsidiaries shall become an "investment company" within the
meaning of such term under the Investment Company Act and the rules and
regulations of the Commission thereunder; and
(m) To timely complete all required filings and otherwise fully
comply in a timely manner with all provisions of the Exchange Act, including the
rules and regulations thereunder, in connection with the registration of the
Shares thereunder.
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7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder covenants and agrees with each U.S. Underwriter:
(a) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (other than the Shares to be sold by the
Selling Stockholder) or securities convertible into or exchangeable for shares
of Common Stock or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.;
(b) That the Shares to be sold by the Selling Stockholder hereunder,
which are represented by the certificates held in custody for the Selling
Stockholder (other than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇), are subject to the interest of the
Underwriters and the other Selling Stockholders, that the arrangements made by
the Selling Stockholder (other than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) for such custody are to
that extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law, by the death or incapacity of any Selling Stockholder or the
occurrence of any other event;
(c) To deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person); and
(d) To deliver to the Representatives such documentation, materials
or other information as any U.S. Underwriter may reasonably request in form and
substance reasonably satisfactory to the Representatives or their counsel to
effectuate any of the provisions of this Agreement, the International
Underwriting Agreement or, where applicable, the Custody Agreement or the Power
of Attorney.
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Shares and any taxes payable
in that connection; (b) the costs incident to the preparation, printing, filing,
delivery and shipping of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), each Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
the Agreement Between the U.S. Underwriters and International Managers, any
Supplemental Agreement Among U.S. Underwriters and any other related documents
in connection with the offering, purchase, sale and delivery of the Shares; (e)
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms
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of sale of the Shares; (f) any applicable listing or other similar fees; (g) the
fees and expenses of qualifying the Shares under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum, if the preparation of such Memorandum is
requested by the Representatives (including related fees and expenses of counsel
to the U.S. Underwriters); (h) the cost of printing certificates representing
the Shares; (i) the costs and charges of any transfer agent or registrar; and
(j) all other costs and expenses incident to the performance of the obligations
of the Company or the Selling Stockholders; provided that, except as provided in
this Section 8 and in Section 13, the U.S. Underwriters shall pay their own
costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Shares which they may sell and the expenses of advertising
any offering of the Shares made by the U.S. Underwriters.
9. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company and the Selling Stockholders contained herein, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 6(a) hereof, the Registration Statement and all
post-effective amendments to the Registration Statement shall have become
effective, all filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made and no such filings shall have been made
without the consent of the Representatives; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto or suspending the qualification of the Shares for offering or sale in
any jurisdiction shall have been issued; no proceedings for the issuance of any
such order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been disclosed to the
Representatives and complied with to their satisfaction.
(b) No U.S. Underwriter shall have been advised by the Company or
shall have discovered and disclosed to the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto contains an
untrue statement of fact which, in the opinion of the Representatives or in the
opinion of counsel to the U.S. Underwriters, is material or omits to state a
fact which, in the opinion of the Representatives or in the opinion of counsel
to the U.S. Underwriters, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the International
Underwriting Agreement, the Custody Agreements, the Powers of Attorney, the
Shares, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and
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the Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(d) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Company
their written opinion, as counsel for the Company, addressed to the Company and
dated on or before the First Delivery Date, in form and substance satisfactory
to the Representatives, regarding certain tax matters relating to the Merger.
(e) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the
Representatives their written opinion, as counsel for the Company, addressed to
the U.S. Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, with respect to the matters set forth in
Exhibit B hereto.
(f) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the
Representatives their written opinion, as counsel for the Selling Stockholders,
addressed to the U.S. Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, with respect to the matters set
forth in Exhibit C hereto.
(g) The Representatives shall have received from ▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., counsel for the U.S. Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representatives 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 upon such matters.
(h) At the time of execution of this Agreement, the Representatives
shall have received from KPMG Peat Marwick LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the U.S. Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to U.S.
Underwriters in connection with registered public offerings.
(i) With respect to the letter of KPMG Peat Marwick LLP referred to
in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the U.S. Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of
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the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters covered by
the initial letter and (iii) confirming in all material respects the conclusions
and findings set forth in the initial letter.
(j) On each Delivery Date, there shall have been furnished to the
Representatives a certificate, dated such Delivery Date and addressed to the
Representatives, signed on behalf of the Company by its Chief Executive Officer
and its Chief Financial Officer, to the effect that (i) the representations,
warranties and agreements of the Company contained in this Agreement are true
and correct, as if made at and as of such Delivery Date, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be complied with or satisfied at or prior to such Delivery Date; (ii) no stop
order suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been initiated or threatened;
(iii) the signers of said certificate have carefully examined the Registration
Statement and the Prospectus and any amendments or supplements thereto, and such
documents contain all statements and information required to be included
therein, and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading; (iv) since the Effective Date there has
occurred no event required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set forth; and
(v) no event contemplated by subsection (l) of this Section 9 in respect of the
Company or the Subsidiaries shall have occurred.
(k) The Selling Stockholders shall have furnished to the
Representatives on each Delivery Date a certificate, dated such Delivery Date,
signed by or on behalf of the Selling Stockholder to the effect that the
representations, warranties and agreements of the Selling Stockholder contained
herein are true and correct as of such Delivery Date and that the Selling
Stockholder has complied with all agreements contained herein to be performed by
the Selling Stockholder at or prior to such Delivery Date.
(l) Since the Effective Date, neither the Company nor any of the
Subsidiaries shall have sustained any material loss or interference with its
business by fire, flood, explosion, accident or other calamity, whether or not
covered by insurance, or shall have become a party to or the subject of any
litigation, court or governmental action, investigation, order or decree which
is materially adverse to the Company or the Subsidiaries; nor shall there have
been a change in the capital stock, short-term debt or long-term debt of the
Company or the Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, operations, business, prospects, management, capitalization, financial
condition, results of operations or net worth of the Company or the
Subsidiaries, which loss, litigation, change or development, in the judgement of
the Representatives, shall render it impractical or inadvisable to proceed with
the payment for and delivery of the Shares.
(m) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any of the following: (i) trading in securities
generally on the NYSE or the American
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Stock Exchange or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
judgment of a majority in interest of the several U.S. Underwriters,
impracticable or inadvisable to proceed with the public offering or delivery of
the Shares being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) The NYSE shall have approved the Shares for listing, subject
only to official notice of issuance and evidence of satisfactory distribution.
(o) The Representatives shall have been furnished by the Company
such additional documents and certificates as the Representatives or counsel for
the U.S. Underwriters may reasonably request.
(p) Simultaneously with the closing hereunder on the First Delivery
Date, the closing of the International Underwriting Agreement shall have
occurred.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives and to counsel for the U.S. Underwriters. The
Company shall furnish to the Representatives conformed copies of such opinions,
certificates, letters and other documents in such number as they shall
reasonably request. If any of the conditions specified in this Section 9 shall
not have been fulfilled, when and as required by this Agreement, this Agreement
and all obligations of the U.S. Underwriters hereunder may be canceled at, or at
any time prior to, each Delivery Date, by the Representatives. Any such
cancellation shall be without liability of the U.S. Underwriters to the Company,
the Selling Stockholders or any of their affiliates. Notice of such cancellation
shall be given to the Company in writing, or by telegraph or telephone and
confirmed in writing.
10. Indemnification and Contribution.
(a) The Company and the Selling Stockholders, jointly and severally,
shall indemnify and hold harmless each U.S. Underwriter (including any U.S.
Underwriter in its role as qualified independent underwriter pursuant to the
rules of the National Association of Securities Dealers, Inc.), its officers and
employees and each person, if any, who controls any U.S. Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that U.S. Underwriter, officer,
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employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) in
any blue sky application or other document prepared or executed by the Company
(or based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Shares under the securities laws
of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any U.S.
Underwriter in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that neither the Company
nor any Selling Stockholder shall be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such U.S. Underwriter through its negligence or willful misconduct), and
shall reimburse each U.S. Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that U.S. Underwriter, officer, employee or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that neither the Company nor any Selling
Stockholder shall be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information concerning such U.S. Underwriter
furnished to the Company through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Company or any Selling
Stockholder may otherwise have to any U.S. Underwriter or to any officer,
employee or controlling person of that U.S. Underwriter.
(b) Each Selling Stockholder shall indemnify and hold harmless each
U.S. Underwriter (including any U.S. Underwriter in its role as qualified
independent underwriter pursuant to the rules of the National Association of
Securities Dealers, Inc.), its officers and employees, and each person, if any,
who controls any U.S. Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares), to which
that U.S. Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, the inaccuracy or
breach of any representation, warranty or agreement of such Selling Stockholder
set forth in Section 2 of this Agreement and shall reimburse each U.S.
Underwriter, its officers and employees and each such
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controlling person for any legal or other expenses reasonably incurred by that
U.S. Underwriter, its officers and employees or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Selling
Stockholders may otherwise have to any U.S. Underwriter or any officer, employee
or controlling person of that U.S. Underwriter.
(c) Each U.S. Underwriter, severally but not jointly, shall
indemnify and hold harmless the Company, and its officers, employees and
directors (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), and each
other person, if any, who controls the Company within the meaning of the
Securities Act, and each of the Selling Stockholders from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer, controlling person or
Selling Stockholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such U.S. Underwriter furnished
to the Company through the Representatives by or on behalf of that U.S.
Underwriter specifically for inclusion therein, and shall reimburse the Company
and any such director, officer, controlling person or Selling Stockholder for
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person or Selling Stockholder in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any U.S. Underwriter
may otherwise have to the Company or any such director, officer, employee,
controlling person or Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the
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indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that any U.S. Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such U.S. Underwriters or such controlling
person unless (i) the employment of such counsel has been specifically
authorized in writing by the Company or the Selling Stockholders or both, as the
case may be, (ii) the Company or the Selling Stockholders or both, as the case
may be, shall have failed to assume the defense and employ counsel or (iii) the
named parties to any such action (including any impleaded parties) include both
such U.S. Underwriter or such controlling person and the Company or the Selling
Stockholders or both, as the case may be, and such U.S. Underwriter or such
controlling person shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the Company or the Selling Stockholders or both, as the case
may be (in which case the Company or the Selling Stockholders or both, as the
case may be, shall not have the right to assume the defense of such action on
behalf of such U.S. Underwriter or such controlling person and the fees and
expenses of such separate counsel shall be paid by the Company or the Selling
Stockholders or both, as the case may be). The Company or the Selling
Stockholders or both, as the case may be, shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for such indemnified party, which firm shall be designated by the U.S.
Underwriters. No indemnifying party shall (i) without the prior written consent
of the indemnified parties (which consent shall not be unreasonably withheld)
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company or the Selling Stockholders or both, as the case may be,
on the one hand, and the U.S. Underwriters, on the other hand, from the offering
of the
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Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company or the Selling Stockholders or both, as the case may be, on the one
hand, and the U.S. Underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Selling
Stockholders or both, as the case may be, on the one hand, and the U.S.
Underwriters, on the other hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses) received by
the Company or the Selling Stockholders or both, as the case may be, on the one
hand, and the total underwriting discounts and commissions received by the U.S.
Underwriters with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Stockholders, as the case may be, or the U.S.
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company or the Selling Stockholders, as the case may be, and the U.S.
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the U.S. Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no U.S.
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 was offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise paid or becomes liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The U.S. Underwriters'
obligations to contribute as provided in this Section 10(e) are several in
proportion to their respective underwriting obligations and not joint.
(f) The U.S. Underwriters severally confirm and each of the Company
and the Selling Stockholders acknowledges that the statements with respect to
the public offering of the Shares by the U.S. Underwriters set forth on the
cover page of, the legend concerning over-allotments on the inside front cover
page of and the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such U.S. Underwriters furnished in writing to the
Company by or on behalf of the U.S. Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
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(g) The indemnification obligations of the Selling Stockholders are
subject to the following additional provisions:
(i) The liability of each Selling Stockholder under Section 10
shall be limited to the total proceeds (net of underwriting
discounts and commissions but before deducting expenses) received by
such Selling Stockholder under this Agreement; provided that such
limitation shall not apply in any instances in which liability under
this Section 10 arises out of or in connection with the breach or
inaccuracy of the representation of the Selling Stockholders set
forth in Section 2(m) of this Agreement.
(ii) It shall be a condition to the obligation of the Selling
Stockholders to indemnify an indemnified party pursuant to Section
10(a) (or pursuant to Section 10(e) where the liability arises under
Section 10(a)) or pursuant to Section 10(b) as a result of the
breach or inaccuracy of the representation of the Selling
Stockholders set forth in Section 2(a) (or pursuant to Section 10(e)
where the liability arises under Section 10(b) in connection with
such a breach or inaccuracy) that such indemnified party shall have
made a demand for indemnification from the Company in accordance
with Section 10(d) and either (A) the full amount of such claim
shall not have been paid within 90 days from the making of such
demand or (B) such demand for indemnification shall have been
rejected by the Company.
11. Defaulting U.S. Underwriters.
If, on either Delivery Date, any U.S. Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting U.S. Underwriters shall be obligated to purchase the Shares which
the defaulting U.S. Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of Firm Shares set opposite
the name of each remaining non-defaulting U.S. Underwriter in Schedule 1 hereto
bears to the total number of Firm Shares set opposite the names of all the
remaining non-defaulting U.S. Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting U.S. Underwriters shall not be
obligated to purchase any of the Shares on such Delivery Date if the total
number of Shares which the defaulting U.S. Underwriter or defaulting U.S.
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of Shares to be purchased on such Delivery Date, and any remaining
non-defaulting U.S. Underwriter shall not be obligated to purchase more than
110% of the number of the Shares which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting U.S. Underwriters, or those other U.S. Underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Shares to be purchased on such Delivery Date. If the
remaining U.S. Underwriters or other U.S. Underwriters satisfactory to the
Representatives do not elect to purchase the Shares which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase on such Delivery
Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the U.S. Underwriters to purchase, and of the Company and the
Selling Stockholders to sell, the
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Option Shares) shall terminate without liability on the part of any
non-defaulting U.S. Underwriter or the Company or the Selling Stockholders,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 8 and 13. As used in this Agreement, the
term "U.S. Underwriter" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 11, purchases Firm Shares which a defaulting U.S.
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter
of any liability it may have to the Company or the Selling Stockholders for
damages, including expenses paid by the Company pursuant to Sections 8 and 13,
caused by its default. If other U.S. Underwriters are obligated or agree to
purchase the Shares of a defaulting or withdrawing U.S. Underwriter, either the
Representatives, the Company or the Selling Stockholders may postpone the
Delivery Date for up to seven full Business Days in order to effect any changes
that in the opinion of counsel for the Company or the Selling Stockholders or
counsel for the U.S. Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
12. Termination. The obligations of the U.S. Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Shares if, prior to that
time, any of the events described in Section 9(l) or 9(m) shall have occurred or
if the U.S. Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
13. Reimbursement of U.S. Underwriters' Expenses. If the Company or
any of the Selling Stockholders shall fail to tender the Shares for delivery to
the U.S. Underwriters by reason of any failure, refusal or inability on the part
of the Company or such Selling Stockholder to perform any agreement on its part
to be performed, or because any other condition of the U.S. Underwriters'
obligations hereunder required to be fulfilled by the Company or any of the
Selling Stockholders is not fulfilled, the Company will reimburse the U.S.
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the U.S. Underwriters in connection with
this Agreement and the proposed purchase of the Shares, and upon demand the
Company shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 11 by reason of the default of one
or more U.S. Underwriters, neither the Company nor any of the Selling
Stockholders shall be obligated to reimburse any defaulting U.S. Underwriter on
account of those expenses.
14. Notices. Any notice, consent, request, instruction, approval and
other communication provided for herein shall be in writing, shall be delivered
or sent by mail, telex or facsimile transmission and shall be deemed validly
given, made or served (i) on the date on which it is delivered personally with
receipt acknowledged, (ii) five Business Days after it is sent by registered or
certified mail (receipt requested and postage prepaid), (iii) one Business Day
after it is sent by overnight courier (charges prepaid) or (iv) on the same
Business Day when sent before 5:00 P.M., recipient's time (and on the next
Business Day when sent after 5:00 P.M., recipient's time) by telex or
telecopier, transmission confirmed and charges prepaid. Such notices shall be in
writing, and
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(a) if to the Company or any of the Selling Stockholders, such
notice shall be addressed to the Company or such Selling Stockholder
(in care of the Company) at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Fax: 713/▇▇▇-▇▇▇▇); and
(b) if to the U.S. Underwriters, such notice shall be
addressed to the Representatives in care of ▇▇▇▇▇▇ Brothers Inc., 3
World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Syndicate Department (Fax: 212/▇▇▇-▇▇▇▇), with a copy, in
the case of any notice pursuant to Section 10(d), to the Director of
Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., 3
World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
provided, however, that any notice to a U.S. Underwriter pursuant to Section
10(d) shall be delivered or sent by mail, telex or facsimile transmission to
such U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the U.S.
Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the Company,
the Selling Stockholders and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of those persons, except
that (A) the representations, warranties, indemnities and agreements of the
Company and the Selling Stockholders contained in this Agreement shall also be
deemed to be for the benefit of each International Manager who offers or sells
any shares of Common Stock in accordance with the terms of the Agreement Between
U.S. Underwriters and International Managers and the person or persons, if any,
who control each U.S. Underwriter or International Manager within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the U.S.
Underwriters contained in Section 10(c) of this Agreement shall be deemed to be
for the benefit of the directors of the Company, officers of the Company who
have signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 15, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the U.S.
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
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17. Definition of the Term "Business Day." For purposes of this
Agreement, "business day" means any day on which the NYSE is open for trading.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholders and the U.S. Underwriters, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
IRI INTERNATIONAL CORPORATION
By:________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman and Chief Executive Officer
SELLING STOCKHOLDERS:
__________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Attorney-in-Fact
__________________________________________
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Attorney-in-Fact
33
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
HOWARD, WEIL, LABOUISSE, ▇▇▇▇▇▇▇▇▇▇
INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
CREDIT LYONNAIS SECURITIES (USA), INC.
For themselves and as
Representatives of the
several U.S. Underwriters named
in Schedule 1 hereto
By: ▇▇▇▇▇▇ BROTHERS INC.
By:___________________________________
Authorized Representative