7-Eleven, Inc.
10,000,000 Shares*
Common Stock
($0.0001 par value)
Underwriting Agreement
New York, New York
, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx
Incorporated
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
7-Eleven, Inc., a corporation organized under the laws of
Texas (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, 10,000,000 shares of Common Stock, $0.0001 par
value ("Common Stock") of the Company (said shares to be issued and sold by
the Company being hereinafter called the "Underwritten Securities"). The
Company also proposes to grant to the Underwriters an option to purchase up
to 1,500,000 additional shares of Common Stock to cover over-allotments (the
"Option Securities"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). To the extent there
are no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as
the context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the
----------------------------
* Plus an option to purchase from 7-Eleven, Inc., up to 1,500,000
additional shares to cover over-allotments.
2
filing of any document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-36496) on Form S-3, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission one of the following: either (1) prior to
the Effective Date of such registration statement, a further amendment
to such registration statement (including the form of final prospectus)
or (2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed,
such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement 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 in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact
3
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so duly incorporated (as to a subsidiary), qualified or
be in good standing would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(d) all the outstanding shares of capital stock of each
wholly-owned subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding shares of
capital stock of such subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances.
(e) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required and the statements in the Prospectus
under the headings "Management's Discussion and Analysis of Financial
Condition and Results of Operations Other Issues Environmental" and
"Certain U.S. Federal Tax Considerations for Non-United States Holders
of Common Stock" insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(g) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the
4
Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(i) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties, except in the case of clause (ii), such conflicts,
breaches or violations which would not have a Material Adverse Effect.
(j) Except for such rights as may exist under the shareholders
agreements dated November 15, 1988 and March 5, 1991, each as amended,
among the Company and certain of its shareholders and for such rights
that IYG Holding Company may have, the Company is under no contractual
obligation to register under the Act securities of the Company held by
any person.
(k) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Financial Data" in the Prospectus and Registration Statement fairly
present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein.
(l) No action, suit or proceeding by or before any court or
governmental
5
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries or its or their property is pending or, to the
best knowledge of the Company, threatened that (i) could reasonably be
expected to have a Material Adverse Effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a Material Adverse
Effect, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(m) Each of the Company and each of its subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as presently conducted, except for such failure to own or
lease such properties as would not have a Material Adverse Effect.
(n) Neither the Company nor any wholly-owned subsidiary
thereof is in violation or default of (i) any provision of its charter
or bylaws, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a party or
bound or to which its property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable, except in the case of clauses
(ii) and (iii) for any such violations or defaults that would not have
a Material Adverse Effect.
(o) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(p) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(q) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in
6
good faith or as would not have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(r) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that could have a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(s) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and
there are no claims by the Company or any of its subsidiaries under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause, except for
such claims and denials that would not have a Material Adverse Effect;
neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(t) No subsidiary of the Company (other than Cityplace Center
East Corp. and 7-Eleven Canada Inc. under the terms of their respective
loan agreements) is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution
on such subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company
or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus.
(u) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
7
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(v) The Company and each of its wholly-owned subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(w) The Company has not taken, directly or indirectly, any
action that has constituted or that was designed to or might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(x) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto). Except as set forth in the Prospectus or where the effect of
being so named would not have a Material Adverse Effect, neither the
Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(y) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its wholly-owned
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including,
8
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws,
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(z) Each of the Company and its wholly-owned subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards
of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security
Act of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company and its
wholly-owned subsidiaries have not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
(aa) The Company has no significant subsidiaries as that term
is defined by Rule 1-02 of Regulation S-X.
(bb) Each of the Company's subsidiaries and wholly-owned
subsidiaries, together with their respective jurisdictions of
organizations, are listed on Annex A and Annex B, respectively,
attached hereto.
(cc) The Company and its subsidiaries own, possess, license
or have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted, except in the case where the failure to
have such possession, license or right to use would not have a Material
Adverse Effect. Except in the case where the failure of any of the
following would not have a Material Adverse Effect, there (a) are no
rights of third parties (other than pursuant to license agreements
granted by the Company or its subsidiaries in the ordinary course of
business) to any such Intellectual Property; (b) is no infringement by
third parties of any such Intellectual Property; (c) is no pending or
threatened action, suit, proceeding or claim by others challenging the
Company's rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for
any such claim; (d) is no pending or threatened action, suit,
9
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (e) is no
pending or threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable
basis for any such claim; (f) is no U.S. patent or published U.S.
patent application which contains claims that dominate or may dominate
any Intellectual Property described in the Prospectus as being owned by
or licensed to the Company or that interferes with the issued or
pending claims of any such Intellectual Property; and (g) is no prior
art of which the Company is aware that may render any U.S. patent held
by the Company invalid or any U.S. patent application held by the
Company unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office.
(dd) The statements contained in the Prospectus under the
captions "Business -- Products and Services; Retail Information
Systems," insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a
purchase price of $ per share, the amount of the Underwritten Securities set
forth opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to 1,500,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of shares of the Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the Option
Securities to be purchased by the several Underwriters as such Underwriter is
purchasing
10
of the Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for
in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on , 2000, or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of
the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the Company.
Delivery of the Underwritten Securities and the Option Securities shall be
made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is
exercised after the third Business Day prior to the Closing Date, the Company
will deliver the Option Securities (at the expense of the Company) to the
Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date
for the Option Securities, and the obligation of the Underwriters to purchase
the Option Securities shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 6
hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the
several Underwriters propose to offer the Securities for sale to the public
as set forth in the Prospectus.
5. AGREEMENTS. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless
11
the Company has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which
you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives (1)
when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the
12
Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common
Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of 90 days after
the date of the Underwriting Agreement, PROVIDED, HOWEVER, that the
Company may issue and sell Common Stock pursuant to any director or
employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time and
the Company may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution
Time.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of
13
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as
of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, and to the performance by
the Company of its obligations hereunder. In addition, the obligations of the
Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the following conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Xxxxxx &
Xxxxxx LLP, counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and to
such counsel's knowledge is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification, except
where the failure to be so qualified would not have a Material
Adverse Effect;
(ii) the Company's authorized equity capitalization
is as set forth in the Prospectus; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Prospectus; the outstanding shares of
Common Stock have been duly and validly authorized and issued
and are fully paid and nonassessable; the Securities have been
duly and validly authorized, and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement,
will be fully paid and nonassessable; the Securities are duly
listed, and admitted and
14
authorized for trading on the Nasdaq National Market (based
upon oral conversations counsel has had with authorized
representatives of the Nasdaq National Market) and approved
for listing on the New York Stock Exchange; the certificates
for the Securities are in valid and sufficient form under the
laws of Texas; to such counsel's knowledge, the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, to
such counsel's knowledge no options, warrants or other rights
to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property of a character required to be disclosed
in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or
filed as required; and the statements included or incorporated
by reference in the Prospectus under the headings
"Management's Discussion and Analysis of Financial Condition
and Results of Operations Other Issues Environmental",
"Certain U.S. Federal Tax Considerations for Non-United States
Holders of Common Stock" and "Description of Capital Stock"
fairly summarize the matters therein described;
(iv) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened; and in a separate letter addressed to the
Underwriters counsel shall state that in addition to rendering
legal advice and assistance to the Company in the course of
the preparation of the Registration Statement and the
Prospectus, involving, among other things, discussion and
inquiries concerning certain legal matters and the review of
certain corporation records, documents and proceedings, it
also participated in conferences with certain certified public
accountants and with the Underwriters and Underwriters'
counsel at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and that
it has not, however, independently checked or verified the
accuracy, completeness or
15
fairness of the information contained in the Registration
Statement and Prospectus but that based upon such
participation counsel confirms that counsel has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein as to which such counsel
expresses no belief) the Registration Statement, as of its
effective date, did not comply as to form in all material
respects with the requirements of the Act or contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that (except for
financial statements and schedules and other financial and
statistical data included or incorporated by reference therein
as to which such counsel expresses no belief) the Prospectus
or any amendment or supplement thereto, as of its respective
date, and as of the Closing date, contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading and for the
purposes of this paragraph, it is understood that such
statement of counsel relating to documents incorporated by
reference in the Prospectus shall relate to such incorporated
documents (except for financial statements and schedules and
other financial and statistical data included or incorporated
by reference therein) as of the date of filing such documents;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing
with or order of any U.S. court or governmental agency or body
is required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction (with respect to which counsel expresses no
opinion) in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated
in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained;
and
(ix) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any
16
property or assets of the Company pursuant to, (i) the charter
or by-laws of the Company, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
or instrument to which the Company is a party or bound or to
which its or their property is subject and in each case is an
exhibit to the Registration Statement or a document
incorporated by reference in the Registration Statement, or
(iii) any U.S. statute, law, rule or regulation or any
judgment, order or decree to which counsel has knowledge
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other U.S authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties
(other than the blue sky laws of any jurisdiction, with
respect to which counsel expresses no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Texas or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Underwriters and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Representatives shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration Statement,
the Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company acting in such capacity, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied under this Agreement at or prior to the Closing
Date;
17
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has
been no Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(e) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at
the Execution Time and at the Closing Date, letters, dated respectively
as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the
three-month period ended March 31, 2000, and as of March 31, 2000 in
accordance with Statement on Auditing Standards No. 71, and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted by
the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
three-month period ended March 31, 2000, and as at March 31,
2000 incorporated by reference in the Registration Statement
and the Prospectus; carrying out certain specified procedures
(but not an audit in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and audit committees of the Company
and the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1999,
nothing came to their attention which caused them to believe
18
that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act
and with the related rules and regulations adopted by the
Commission with respect to financial statements included or
incorporated by reference in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated by reference in the Registration
Statement and the Prospectus;
(2) with respect to the period subsequent to
March 31, 2000, there were any changes, at a specified date
not more than five days prior to the date of the letter, in
the long-term debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the
shareholders' equity of the Company as compared with the
amounts shown on the March 31, 2000, consolidated balance
sheet included or incorporated by reference in the
Registration Statement and the Prospectus, or for the period
from April 1, 2000 to such specified date there were any
decreases, as compared with the corresponding period of 1999
in earnings before income tax expense (benefit) and
extraordinary gain in or in total or net earnings per
common share, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not
deemed necessary by the Representatives; or
(3) the information included or incorporated by
reference in the Registration Statement and Prospectus in
response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information) and
Item 402 (Executive Compensation) is not in conformity with
the applicable disclosure requirements of Regulation S-K;
and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information set
forth under the captions
19
"Prospectus Summary", "Risk Factors", "Capitalization",
"Selected Financial Data", "Management's Discussion and
Analysis of Financial Condition and Results of Operations",
"Business" and "Description of Indebtedness" in the
Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7, 7A and 11 of the Company's
Annual Report on Form 10-K, incorporated by reference in the
Registration Statement and the Prospectus, and the
information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q, incorporated by reference in
the Registration Statement and the Prospectus, and certain
information included or incorporated by reference in the
company's Form DEF 14A Proxy Statement agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(g) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(h) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(i) The Securities shall have been listed and admitted and
authorized for
20
trading on the Nasdaq National Market and approved for listing on the
New York Stock Exchange, and satisfactory evidence of such actions
shall have been provided to the Representatives.
(j) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each director of the Company, each executive officer of the
Company and certain shareholders of the Company named on Annex C hereto
addressed to the Representatives.
If any of the conditions specified in paragraphs (a) through
(j) of this Section 6 shall not have been fulfilled in all material respects
when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancelation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Shearman & Sterling, counsel for the Underwriters,
at 000 Xxxxxxxxx, Xxx Xxxx, XX 00000-0000, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of
the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters severally through Xxxxxxx Xxxxx Xxxxxx on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees
to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in
any amendment thereof, or in any Preliminary Prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein
21
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have. The indemnification contained in this paragraph (a) with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Securities by such Underwriter to any person if a copy of the
Prospectus shall not have been delivered or sent to such person within the time
required by the Act and the regulations thereunder, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus,
provided that the Company has delivered the Prospectus to the several
Underwriters in requisite quantity on a timely basis to permit such delivery or
sending.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page
regarding delivery of the Securities and, under the heading "Underwriting",
(i) the list of Underwriters and their respective participation in the sale
of the Securities, (ii) the third paragraph insofar as it discusses
concessions and reallowances and (iii) the ninth and tenth paragraphs insofar
as they discuss stabilization, syndicate covering transactions and penalty
bids in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such
action and such
22
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); PROVIDED, HOWEVER, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is understood, however, that the
Company shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons, which
firm shall be designated in writing by Xxxxxxx Xxxxx Barney. An indemnifying
party will not, without the prior written consent of the indemnified parties,
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.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in
23
any agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do
24
not purchase all the Securities, this Agreement will terminate without liability
to any nondefaulting Underwriter or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice
given to the Company prior to delivery of and payment for the Securities, if
at any time prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the Nasdaq National Market or the New York
Stock Exchange shall have been suspended or limited or minimum prices shall
have been established on such exchanges, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
the Company or any of the officers, directors, employees, agents or
controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and
8 hereof shall survive the termination or cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc.
General Counsel (fax no.: (000) 000-0000) and confirmed to the General
Counsel, Xxxxxxx Xxxxx Barney Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to (000) 000-0000 and confirmed to it at (214)
828-7991, attention of the General Counsel.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers, directors, employees, agents and controlling persons referred
to in Section 8 hereof, and no other person will have any right or obligation
hereunder.
25
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or the State of Texas.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in
26
which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as
the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by
Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
The uncapitalized term "subsidiary" shall mean any
corporation, association, limited liability company, partnership or
other business entity of which more than 50% of the total voting power
of shares of capital stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by
the Company.
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
7-Eleven, Inc.
By:
-----------------------
Name:
Title:
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx
Incorporated
By: Xxxxxxx Xxxxx Barney Inc.
By:
------------------------------
Name:
Title:
By: Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx
Incorporated
------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
EXHIBIT A
[Letterhead of officer, director or major stockholder of
7-Eleven, Inc.]
7-ELEVEN, INC.
PUBLIC OFFERING OF COMMON STOCK
June , 2000
Xxxxxxx Xxxxx Barney Inc.
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx
Incorporated
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with
the proposed Underwriting Agreement (the "Underwriting Agreement"), between
7-Eleven, Inc., a Texas corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.0001 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned) directly or indirectly, including the filing (or
participation in the filing of) a registration statement with the Securities
and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder with respect to, any shares of capital
stock of the Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the date of the
Underwriting Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by Xxxxxxx Xxxxx Barney Inc.
2
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major
stockholder]
[Name and address of officer, director or
major stockholder]
SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Xxxxxxx Xxxxx Xxxxxx Inc.............................
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx,
Incorporated...............................
Deutsche Bank Securities Inc.........................
Xxxxxxxxx, Lufkin & Xxxxxxxx.........................
Xxxxxxx, Sachs & Co..................................
==========================
Total............
--------------------------
ANNEX A
SUBSIDIARIES JURISDICTION
------------ ------------
Bawco Ohio
Xxx of Vermont, Inc. Vermont
Brazos Comercial E Empreendimentos Ltda. Brazil
Christy's Market, Inc. Massachusetts
Cityplace Center East Corporation Texas
Lavicio's, Inc. California
Xxxxx Enterprises, Inc. Colorado
MTA CAL, Inc. California
Puerto Rico B 7, Inc. Puerto Rico
7-Eleven Beverage Company, Inc. Texas
7-Eleven Canada, Inc. Canada
7-Eleven Comercial Ltda. Brazil
7-Eleven International, Inc. Nevada
7-Eleven Limited United Kingdom
7-Eleven of Idaho, Inc. Idaho
7-Eleven of Massachusetts, Inc. Massachusetts
7-Eleven of Nevada, Inc. Delaware
7-Eleven of Virginia, Inc. Virginia
7-Eleven Pty. Ltd. Australia
7-Eleven Stores (NZ) Limited New Zealand
7-Eleven Sales Corporation Texas
SLC Financial Services, Inc. Texas
Southland International Investment Corporation N.V. Netherlands Antilles
Southland Investment Canada Limited Canada
TSC Lending Group, Inc. Texas
The Seven Eleven Limited Hong Kong
The Southland Corporation Employees= Savings
and Profit Sharing Plan Title Holding Corporation Texas
ANNEX B
WHOLLY-OWNED SUBSIDIARIES JURISDICTION
------------------------- ------------
Bawco Ohio
Xxx of Vermont, Inc. Vermont
Brazos Comercial E Empreendimentos Ltda. Brazil
Christy's Market, Inc. Massachusetts
Cityplace Center East Corporation Texas
Lavicio's, Inc. California
Xxxxx Enterprises, Inc. Colorado
MTA CAL, Inc. California
7-Eleven Beverage Company, Inc. Texas
7-Eleven Canada, Inc. Canada
7-Eleven Comercial Ltda. Brazil
7-Eleven International, Inc. Nevada
7-Eleven Limited United Kingdom
7-Eleven of Idaho, Inc. Idaho
7-Eleven of Massachusetts, Inc. Massachusetts
7-Eleven of Nevada, Inc. Delaware
7-Eleven of Virginia, Inc. Virginia
7-Eleven Sales Corporation Texas
SLC Financial Services, Inc. Texas
Southland International Investment Corporation N.V. Netherlands Antilles
Southland Investment Canada Limited Canada
TSC Lending Group, Inc. Texas
The Seven Eleven Limited Hong Kong
The Southland Corporation Employees' Savings
and Profit Sharing Plan Title Holding Corporation Texas
ANNEX C
Xxxxxxxxx Xxx
Toshifumi Suzuki
Xxxxx X. Xxxxxxxx, XX
Xxxxx X. Xxxxx
Xxxxxxx Xxxxxxx
Yoshitami Arai
Xxxxxxx X. Xxxxxx
Xxx X. Xxxx
Xxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxxxxx Xxxx
Xxxxxx X. Xxxxx
Xxxx Xxxx
Xxxx Xxxxxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxx
Xxx-Yokado Co., Ltd.
Seven-Eleven Japan Co., Ltd.
IYG Holding Company
