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________ Shares
MITCHAM INDUSTRIES, INC.
Common Stock
UNDERWRITING AGREEMENT
September ___, 1996
Xxxxxx & Xxxxxxx, Inc.
Xxxxxxx & Company International
c/o Rodman & Xxxxxxx, Inc.
Two World Financial Center
000 Xxxxxxx Xx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several Underwriters
named in Schedule I attached hereto
Ladies and Gentlemen:
Mitcham Industries, Inc., a Texas corporation (the "Company") and
certain stockholders of the Company named in Schedule III hereto (the "Selling
Stockholders") propose to sell to you and the other underwriters named in
Schedule I attached hereto (the "Underwriters"), for whom you are acting as the
Representatives, an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), of
which 2,500,000 shares (the "Company Shares") are to be issued and sold by the
Company and 500,000 shares (the "Selling Stockholders Shares") are to be sold
by the Selling Stockholders. The obligation of each Selling Stockholder to
sell Firm Shares shall be as set forth opposite his name on Schedule III
attached hereto. The Company and the Selling Stockholders also propose to
grant to the Underwriters an option to purchase up to an additional 450,000
shares (the "Option Shares") of Common Stock for the purpose of covering over-
allotments in connection with the sale of the Firm Shares, of which 375,000
shares are to be issued and sold by the Company and 75,000 shares are to be
sold by the Selling Stockholders. The Firm Shares and the Option Shares are
together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell the Company Shares
and the Selling Stockholders, severally and not jointly, agree to sell
the Selling Stockholder Shares to the several Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase at the
purchase price per share of Common Stock of $_____ (the "Initial
Price"),
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the aggregate number of Firm Shares set forth opposite such
Underwriter's name in Schedule I attached hereto.
(b) The Company grants to the several Underwriters an option
to purchase up to an additional _______ shares at the Initial Price and
the Selling Stockholders grant to the several Underwriters an option to
purchase up to an additional _______ shares at the Initial Price.
Pursuant to such option, the Company and each of the Selling
Stockholders agree to issue and sell the Option Shares to the several
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase at the Initial Price the same percentage (adjusted
by Xxxxxx & Xxxxxxx, Inc. to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below) and from time-to-time
thereafter within 30 days after the date of this Agreement, upon verbal
or telephonic notice by Xxxxxx & Xxxxxxx, Inc. ("Xxxxxx") to the Company
and the Selling Stockholders setting forth the number of Option Shares
to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company and the Selling
Stockholders of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by certified or
official bank check or checks payable in New York Clearing House (next day)
funds to the Company and the Selling Stockholders, shall take place at the
offices of Xxxxxx & Xxxxxxx, Inc., at Two World Financial Center, 000 Xxxxxxx
Xx., 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, at 10:00 a.m., New York City time,
on the third business day following the date on which the public offering of
the Shares commences (unless such date is postponed in accordance with the
provisions of Section 10(b)), or at such time and place on such other date, not
later than 10 business days after the date of this Agreement, as shall be
agreed upon by the Company and Xxxxxx (such time and date of delivery and
payment are called the "Firm Shares Closing Date"). The public offering of the
Shares shall be deemed to have commenced at the time, which is the earlier of
(a) the time, after the Registration Statement (as defined in Section 4 below)
becomes effective, of the release by you for publication of the first newspaper
advertisement which is subsequently published relating to the Shares or (b) the
time, after the Registration Statement becomes effective, when the Shares are
first released by you for offering by the Underwriters or dealers by letter,
facsimile transmission or telegram.
In the event the option with respect to the Option Shares is exercised,
delivery by the Company and the Selling Stockholders of the Option Shares to
the Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or checks
payable in New York, Clearing House (next day) funds to the Company and the
Selling Stockholders shall take place at the offices of Xxxxxx & Xxxxxxx, Inc.
specified above at the time and on the date (which may be the same date as, but
in no event shall be earlier than, the Firm Shares Closing Date) specified in
the notice referred to in Section 1(b) (such time and date of delivery and
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payment is called the "Option Shares Closing Date"). The Firm Shares Closing
Date and the Option Shares Closing Date are called, individually, a "Closing
Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as Xxxxxx shall request at least two full
business days before the Firm Shares Closing Date or the Option Shares Closing
Date, as the case may be, and shall be made available to Xxxxxx for checking
and packaging, at such place as is designated by Xxxxxx, on the full business
day before the Firm Shares Closing Date or the Option Shares Closing Date, as
the case may be.
The documents to be delivered at each Closing Date by or on behalf of
the parties hereto, including the cross receipt for the Shares and any
additional documents requested by the Underwriters, will be delivered at the
offices of Xxxxxx & Xxxxxx L.L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx,
Xxxxx 00000 (the "Closing Location"). A meeting will be held at the Closing
Location at 2:00 p.m., Houston time, on the New York Business Day next
preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law
or executive order to close.
3. Public Offering. The Company and the Selling Stockholders
understand that the Underwriters propose to make a public offering of the
Shares, as set forth in and pursuant to the Prospectus (as defined in Section 4
below), as soon after the effective date of the Registration Statement and the
date of this Agreement as the Representatives deem advisable. The Company and
the Selling Stockholders hereby confirm that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each preliminary
prospectus and are authorized to distribute the Prospectus (as from time to
time amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees with,
the several Underwriters that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement,
and may have filed one or more amendments thereto, on Form S-1
(Registration No. 333-______), including in such registration
statement and each such amendment a related preliminary
prospectus (a "Preliminary Prospectus"), for the registration of
the Shares, in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"). In addition, the Company
has filed or will promptly file a further amendment to such
registration statement, in the form heretofore delivered to you.
Other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which became effective
upon filing, no other document with respect to the registration
statement referred to
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above has heretofore been filed with the Commission. As used in
this Agreement, the term "Registration Statement" means such
registration statement and the Rule 462(b) Registration
Statement, if any, as amended, on file with the Commission at the
time such registration statement becomes effective (including the
prospectus, financial statements, exhibits and all other
documents filed as a part thereof or incorporated by reference
directly or indirectly therein), provided that such Registration
Statement, at the time it becomes effective, may omit such
information as is permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the
General Rules and Regulations promulgated under the Act (the
"Regulations"), which information ("Rule 430 Information") shall
be deemed to be included in such Registration Statement when a
final prospectus is filed with the Commission in accordance with
Rules 430A and 424(b)(1) or (4) of the Regulations; the term
"Preliminary Prospectus" means each prospectus included in the
Registration Statement, or any amendments thereto, before it
becomes effective under the Act, the form of prospectus omitting
Rule 430A Information included in the Registration Statement when
it becomes effective, if applicable (the "Rule 430A Prospectus"),
and any prospectus filed by the Company with your consent
pursuant to Rule 424(a) of the Regulations; and the term
"Prospectus" means the final prospectus included as part of the
Registration Statement, except that if the prospectus relating to
the securities covered by the Registration Statement in the form
first filed on behalf of the Company with the Commission pursuant
to Rule 424(b) of the Regulations shall differ from such final
prospectus, the term "Prospectus" shall mean the prospectus as
filed pursuant to Rule 424(b) from and after the date on which it
shall have first been used.
(ii) When the Registration Statement becomes effective,
and at all times subsequent thereto to and including the Closing
Dates and during such longer period as the Prospectus may be
required to be delivered in connection with sales by the
Underwriters or a dealer, and during such longer period until any
post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment thereto)
and the Prospectus (as amended or as supplemented if the Company
shall have filed with the Commission any amendment or supplement
to the Registration Statement or the Prospectus) will contain all
statements which are required to be stated therein in accordance
with the Act and the Regulations, will comply with the Act and
the Regulations, and 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, and no event will have occurred which should have
been set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not then been set forth in
such an amendment or supplement; if a Rule 430A Prospectus is
included in the Registration Statement at the time it becomes
effective, the Prospectus filed pursuant to Rules 430A and
424(b)(1) or (4) will contain all Rule 430A Information: and each
Preliminary Prospectus, as of the date filed with the Commission,
did not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not
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misleading; except that no representation or warranty is made in
this Section 4(a)(ii) with respect to statements or omissions
made in reliance upon and in conformity with written information
furnished to the Company as stated in Section 7(b) with respect
to any Underwriter by or on behalf of such Underwriter through
the Representatives expressly for inclusion in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto.
(iii) Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction have issued an order (a
"Stop Order") suspending the effectiveness of the Registration
Statement, preventing or suspending the use of any Preliminary
Prospectus, the Prospectus, the Registration Statement, or any
amendment or supplement thereto, refusing to permit the
effectiveness of the Registration Statement or suspending the
registration or qualification of the Firm Shares or the Option
Shares, nor has any of such authorities instituted or, to the
knowledge of the Company, threatened to institute any proceedings
with respect to a Stop Order.
(iv) Any contract, agreement, instrument, lease or
license required to be described in the Registration Statement or
the Prospectus has been properly described therein. Any contract
agreement, instrument, lease or license required to be filed as
an exhibit to the Registration Statement has been filed with the
Commission as an exhibit to or has been incorporated as an
exhibit by reference into the Registration Statement.
(v) The Company has no subsidiary or subsidiaries and
does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business
organization, except for those set forth on Schedule II hereto
(each such corporation singly a "Subsidiary" and collectively the
"Subsidiaries"). The Company and its Subsidiaries are
corporations duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation,
with full corporate power and authority and all necessary
consents, authorizations, approvals, orders, licenses,
certificates and permits of and from, and declarations and
filings with, all federal, state, foreign, local and other
governmental authorities and all courts and other tribunals, to
own, lease, license and use their properties and assets and to
carry on their business as now being conducted and in the manner
described in the Prospectus, except where such failure would not
have a material adverse effect on the Company and the
Subsidiaries. The Companies and its Subsidiaries have been duly
qualified to do business and are in good standing in each
jurisdiction in which their respective ownership, leasing,
licensing or character, location or use of property and assets or
the conduct of their respective business makes such qualification
necessary, except where the failure to so qualify would not have
a material adverse effect upon the operations, business,
properties, assets, stockholder's equity, results of operations
or financial condition of the Company or any of the Subsidiaries
("Material Adverse Effect").
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(vi) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable, without any personal
liability attaching to the ownership thereof, and have not been
issued and are not owned or held in violation of any preemptive
rights of shareholders, optionholders, warrantholders or other
persons. The Company owns all of the shares of capital stock of
the Subsidiaries, free and clear of all liens, claims, security
interests, restrictions, stockholders' agreements, voting trusts
and any other encumbrances whatsoever, except as described in the
Prospectus. There is no commitment, plan, preemptive right or
arrangement to issue, and no outstanding option, warrant or other
right calling for the issuance of, shares of capital stock of the
Company or any of the Subsidiaries or any security or other
instrument which by its terms is convertible into, exercisable
for or exchangeable for capital stock of the Company or any of
the Subsidiaries, except as described in the Prospectus. There
is outstanding no security or other instrument which by its terms
is convertible into or exchangeable for capital stock of the
Company or any of the Subsidiaries, except as described in the
Prospectus.
(vii) The financial statements of the Company included in
the Registration Statement and the Prospectus fairly present in
all material respects, with respect to the Company, the financial
position, the results of operations and the other information
purported to be shown therein at the respective dates and for the
respective periods to which they apply. Such financial
statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods involved, are correct and complete and are in
accordance with the books and records of the Company. The
accountants whose reports on the audited financial statements are
filed with the Commission as a part of the Registration Statement
are, and during the periods covered by their reports included in
the Registration Statement and the Prospectus were, independent
certified public accountants with respect to the Company within
the meaning of the Act and the Regulations. No other financial
statements are required by Form S-1 or otherwise to be included
in the Registration Statement or the Prospectus. There has at no
time been a material adverse change in the financial condition,
results of operations, business, properties, assets, liabilities,
or future prospects of the Company or any of the Subsidiaries
from the latest information set forth in the Registration
Statement or the Prospectus.
(viii) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal) or
investigation before any court or before any public body or board
pending, or, to the knowledge of the Company, threatened or in
prospect (or any basis therefor) with respect to the Company or
any of the Subsidiaries, or any of their respective operations,
business, properties or assets, except as may be properly
described in the Prospectus or such as individually or in the
aggregate do not now have and could not reasonably be expected in
the future to have a Material Adverse Effect. Neither the
Company nor any of the Subsidiaries is
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involved in any labor dispute nor, to the knowledge of the
Company, is such dispute threatened, which dispute could
reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of the Subsidiaries is in violation
of, or in default with respect to, the provisions of its articles
of incorporation or by-laws or any law, rule, regulation, order,
judgment or decree which could reasonably be expected to have a
Material Adverse Effect; nor is the Company or any of the
Subsidiaries required to take any action in order to avoid any
such violation or default with respect thereto.
(ix) Except as described in the Prospectus, the Company
and each of the Subsidiaries have (1) good and indefeasible title
to all real property and good and marketable title to all other
material properties and assets described in the Prospectus as
owned by the Company or any of the Subsidiaries and (2) valid,
subsisting and enforceable leases for all of the properties and
assets, real or personal, described in the Prospectus as leased
by them, in each case free and clear of any security interests,
mortgages, pledges, liens, encumbrances or charges of any kind,
other than those described in the Prospectus and those that could
not, individually or in the aggregate, have a Material Adverse
Effect.
(x) The Company and each of the Subsidiaries, and to
the knowledge of the Company, any other party, is not now and is
not expected by the Company to be in violation or breach of, or
in default with respect to, complying with any term, obligation
or provision of any contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement or
understanding which is material to the Company or any of the
Subsidiaries and no event has occurred which with notice or lapse
of time or both would constitute such a default, and each such
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding is in
full force and is the legal, valid and binding obligation of the
parties thereto and is enforceable as to the Company, each of the
Subsidiaries and, to the knowledge of the Company, each other
party thereto, in accordance with its terms, subject to
applicable bankruptcy, insolvency and other laws affecting the
enforceability of creditor's rights generally and the effects of
general principles of equity. The Company and each of the
Subsidiaries enjoys peaceful and undisturbed possession under all
property leases and licenses under which it is operating, the
loss of any of which would not have a Material Adverse Effect.
Neither the Company nor any of the Subsidiaries is in violation
or breach of, or in default with respect to, any term of its
certificate of incorporation (or other charter document) or
by-laws or of any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, which breach or default of
such franchise, license, permit, judgment, decree, order,
statute, rule or regulation could reasonably be expected to have
a Material Adverse Effect.
(xi) The Company and the Subsidiaries have filed all
federal, state, local and foreign tax returns which are required
to be filed through the date hereof, or have received extensions
thereof, and have paid all taxes shown on such returns and all
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assessments received by them to the extent that the same are
material and have become due.
(xii) None of the Company, any Subsidiary, director,
officer, agent, employee or other person associated with or
acting on behalf of the Company and the Subsidiaries has,
directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate
funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment. No
transaction has occurred between or among the Company or the
Subsidiaries and any officers or directors or any affiliates or
affiliates of any such officer or director, except as described
in the Prospectus.
(xiii) The Company and each of the Subsidiaries (A) are in
compliance with any and all applicable federal, state and local
laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
waste, pollutants or contaminants ("Environmental Laws"), (B)
have received all permits, licenses or other approvals required
of it under applicable Environmental Laws to conduct its business
and (C) are in compliance with all terms and conditions of any
such permit, license or approval, except for such noncompliance
with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals that would
not, singly or in the aggregate, have a Material Adverse Effect.
There has been no storage, disposal, generation, transportation,
handling or treatment of hazardous substances or solid wastes by
the Company or any of the Subsidiaries (or to the knowledge of
the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the
Company or any of the Subsidiaries in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action by the Company or
any of the Subsidiaries under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not result in, or
which would not be reasonably likely to result in, singularly or
in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no spill, discharge,
leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such
property of any solid wastes or hazardous substances due to or
caused by the Company or any of the Subsidiaries, except for any
such spill, discharge, leak, emission, injection, escape, dumping
or release which would not result in or would not be reasonably
likely to result in, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Material Adverse Effect; and the terms
"hazardous substances" and "solid wastes" shall have the meanings
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specified in any applicable local, state and federal laws or
regulations with respect to environmental protection;
(xiv) The Company and the Subsidiaries have all requisite
corporate power and authority to execute, deliver and perform
this Agreement. All necessary corporate proceedings of the
Company and the Subsidiaries have been duly taken to authorize
the execution, delivery and performance of this Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company, is the legal, valid and binding obligation of the
Company and is enforceable as to the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency and other
laws affecting the enforceability of creditor's rights generally
and the effects of general principles of equity. No consent,
authorization, approval, order, license, certificate or permit of
or from, or declaration or filing with, any federal, state,
local, foreign or other governmental authority or any court or
other tribunal is required by the Company or the Subsidiaries for
the execution, delivery or performance by the Company of this
Agreement (except filings under the Act which have been or will
be made before the applicable Closing Date and such consents
consisting only of consents under "blue sky" or securities laws
which have been obtained at or prior to the date of this
Agreement). No consent of any party to any contract, agreement,
instrument, lease, license, indenture, mortgage, deed of trust,
note, arrangement or understanding to which the Company or the
Subsidiaries is a party, or to which any of their respective
properties or assets are subject, is required for the execution,
delivery or performance of this Agreement, and the execution,
delivery and performance of this Agreement will not violate,
result in a breach of, conflict with, accelerate the due date of
any payments under, or (with or without the giving of notice or
the passage of time or both) entitle any party to terminate or
call a default under any such contract, agreement, instrument,
lease, license, indenture, mortgage, deed of trust, note,
arrangement or understanding, or violate or result in a breach of
any term of the certificate of incorporation (or other charter
document) or by-laws of the Company or any of the Subsidiaries,
or violate, result in a breach of or conflict with any law, rule,
regulation, order, judgment or decree binding on the Company or
any of the Subsidiaries or to which any of their respective
operations, business, properties or assets are subject.
(xv) The Shares have been duly and validly authorized.
The Firm Shares, when issued and delivered in accordance with
this Agreement, and the Option Shares, when issued and delivered
in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, without any personal
liability attaching to the ownership thereof, and will not be
issued in violation of any preemptive rights of shareholders,
optionholders, warrantholders and any other persons and the
Underwriters will receive good title to the Firm Shares and the
Option Shares purchased by them, respectively, free and clear of
all liens, security interests, pledges, charges, encumbrances,
shareholders' agreements and voting trusts.
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(xvi) All types and series of capital stock of the
Company, the Firm Shares and the Option Shares conform to all
statements relating thereto contained in the Registration
Statement or the Prospectus.
(xvii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as may otherwise be properly described
therein, there has not been any material adverse change in the
assets or properties, business or results of operations or
financial condition of the Company or the Subsidiaries, whether
or not arising from transactions in the ordinary course of
business; neither the Company nor the Subsidiaries have sustained
any material loss or interference with its respective business or
properties from fire, explosion, earthquake, flood or other
calamity, whether or not covered by insurance; since the date of
the latest balance sheet included in the Registration Statement
and the Prospectus, except as reflected in the Registration
Statement, neither the Company nor the Subsidiaries, have
undertaken any liability or obligation, direct or contingent,
except for liabilities or obligations undertaken in the ordinary
course of business; and neither the Company nor the Subsidiaries
have (A) issued any securities or incurred any liability or
obligation, primary or contingent, for borrowed money, (B)
entered into any transaction not in the ordinary course of
business or (C) declared or paid any dividend or made any
distribution on any of its capital stock or redeemed, purchased
or otherwise acquired or agreed to redeem, purchase or otherwise
acquire any shares of its capital stock.
(xviii) The Company and each Subsidiary maintain insurance
covering their properties, operations, personnel and businesses
that, in the Company's reasonable judgment, insures against such
losses and risks as are adequate in accordance with customary
industry practice to protect the Company and the Subsidiaries and
their businesses.
(xix) The Company and each Subsidiary maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (a) transactions are executed in accordance with
management's general or specific authorizations, (b) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability, (c) access to
assets is permitted only in accordance with management's general
or specific authorization and (d) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xx) Neither the Company nor its Subsidiaries or any of
their respective officers, directors or affiliates (as defined in
the Regulations), have taken or will take, directly or
indirectly, prior to the termination of the underwriting
syndicate contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the Company,
or which has caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
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manipulation of the price of any security of the Company, to
facilitate the sale or resale of any of the Firm Shares or the
Option Shares.
(xxi) The Company has obtained from each of its executive
officers and directors, their enforceable written agreement, in
form and substance satisfactory to counsel for the Underwriters,
that for a period of 180 days from the date on which the public
offering of the Shares commences they will not, without your
prior written consent, offer, pledge, sell, contract to sell,
grant any option for the sale of or otherwise dispose of,
directly or indirectly, any shares of Common Stock or other
securities of the Company (or any security or other instrument
which by its terms is convertible into, exercisable for or
exchangeable for shares of Common Stock or other securities of
the Company, including, without limitation, any shares of Common
Stock issuable under any employee stock options), beneficially
owned by them, except with respect to Shares being sold in
connection herewith.
(xxii) The Company and Subsidiary are not, and after
giving effect to the offering and sale of the Shares, will not be
an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(xxiii) Xxxx & Associates LLP, who have certified certain
financial statements of the Company, are independent public
accountants as required by the Act and the rules and regulations
of the Commission thereunder.
(xxiv) No person or entity has the right to require
registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the
Registration Statement, other than such rights as described in
the Prospectus and which have been duly and effectively waived.
(xxv) Except as may be set forth in the Prospectus, the
Company has not incurred any liability for a fee, commission or
other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this
Agreement.
(xxvi) No transaction has occurred between or among the
Company, the Subsidiaries or any of their officers or directors
or any affiliates of any such officers or directors that is
required to be described in and is not described in the
Registration Statement and the Prospectus.
(xxvii) The Common Stock, including the Shares, are
authorized for quotation on the Nasdaq National Market.
(b) The Selling Stockholders, severally and not jointly,
represent and warrant to, and agree with, the several Underwriters that:
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(i) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or beneficiary, public body or
board pending, threatened, or in prospect (or any basis therefor
known to such Selling Stockholder) with respect to such Selling
Stockholder or any of such Selling Stockholder's business,
properties or assets. Such Selling Stockholder is not in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree; nor is such Selling
Stockholder required to take any action in order to avoid such
violation or default.
(ii) Such Selling Stockholder has all requisite power
and authority to execute, deliver, and perform this Agreement.
This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder, is the legal, valid and
binding obligation of such Selling Stockholder, and is
enforceable as to such Selling Stockholder in accordance with its
terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with,
any federal, state, local or other governmental authority or any
court or other tribunal is required by such Selling Stockholder
for the execution, delivery or performance of this Agreement
(except filings under the Act which have been made before the
applicable Closing Date and such consents consisting only of
consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement) by such
Selling Stockholder. No consent of any party to any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding to which such
Selling Stockholder is a party, or to which any of such Selling
Stockholder's properties or assets are subject, is required for
the execution, delivery or performance of this Agreement; and the
execution, delivery and performance of this Agreement will not
violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding, or
violate, result in or breach of, or conflict with, any law, rule,
regulation, order, judgment or decree binding on such Selling
Stockholder or to which any of such Selling Stockholder's
operations, business, properties, or assets are subject.
(iii) Such Selling Stockholder has good title to the
Selling Stockholder shares and Option Shares, as the case may be,
to be sold by such Selling Stockholder pursuant to this
Agreement, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders' agreements and
voting trusts and when delivered in accordance with this
Agreement, the Underwriters will receive good title to the
Selling Stockholder Shares and the Option Shares purchased by
them, respectively, from such Selling Stockholder, free and clear
of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts.
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(iv) Neither such Selling Stockholder nor any of such
Selling Stockholder's affiliates (as defined in the Regulations)
has taken or will take, directly or indirectly, prior to the
termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the
price of any security of the Company, or which has caused or
resulted in, or which might in the future reasonably be expected
to cause or result in, stabilization or manipulation of the price
of any security of the Company, to facilitate the sale or resale
of any of the Selling Stockholder Shares or the Option Shares.
(v) All Information furnished or to be furnished to the
Company by or on behalf of such Selling Stockholder for use in
connection with the preparation of the Registration Statement and
the Prospectus is true in all respects and does not and will 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.
(vi) Except as may be set forth in the Prospectus, such
Selling Stockholder has not incurred any liability for a fee,
commission or other compensation on account of the employment of
a broker or finder in connection with the transactions
contemplated by this Agreement.
(vii) Such Selling Stockholder has no knowledge that, and
does not believe that, any representation or warranty of the
Company in Section 4(a) is incorrect.
(viii) Such Selling Stockholder has not, directly or
indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or
domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment.
(ix) No transaction has occurred between such Selling
Stockholder and the Company that is required to be described in
the Registration Statement or the Prospectus.
5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares are subject
to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness
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of the Registration Statement shall be in effect and no proceedings for
such purpose shall be pending before or threatened by the Commission,
and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.
(c) The representations and warranties of the Company and of
the Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Section 5(d) shall be true and
correct when made and on and as of each Closing Date as if made on such
date and the Company and the Selling Stockholders shall have performed
all covenants and agreements and satisfied all the conditions contained
in this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) The Representatives shall have received on each Closing
Date (i) a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive officer and the chief financial
officer of the Company to the effect that the persons executing such
certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and
warranties of the Company in this Agreement are true and correct on and
as of such Closing Date with the same effect as if made on such Closing
Date and the Company has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date and (ii)
certificates, addressed to the Representatives and dated such Closing
Date, of each of the Selling Stockholders to the effect that the
representations and warranties of such Selling Stockholders are true and
correct on and as of such Closing Date and such Selling Stockholder has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by
such Selling Stockholder at or prior to such Closing Date.
(e) The Representatives shall have received at the time this
Agreement is executed and on each Closing Date, signed letters from Xxxx
& Associates LLP, addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
the form and scope reasonably satisfactory to the Representatives, with
reproduced copies or signed counterparts thereof for each of the
Underwriters confirming that they are independent accountants within the
meaning of the Act and the Regulations, that the response to Item 10 of
the Registration Statement is correct in so far as it relates to them
and stating in effect that:
(i) in their opinion the audited financial statements
included in the Registration Statement and the Prospectus
(including the related schedules and notes) and reported on by
them comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act
and the related published rules and regulations thereunder;
(ii) on the basis of specified procedures as of a
specified date not more than five days prior to the date of their
letter (which procedures do not constitute an examination made in
accordance with generally accepted accounting principles) and
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which include a reading of the latest available unaudited interim
consolidated financial statements of the Company and the
Subsidiaries, a reading of the minutes of the meetings of the
shareholders and directors of the Company and inquiries of
certain officials of the Company and the Subsidiaries who have
responsibility for financial and accounting matters of the
Company and the Subsidiaries as to transactions and events
subsequent to the date of the latest audited financial
statements, except as disclosed in the Registration Statement and
the Prospectus, nothing came to their attention which caused them
to believe that:
(A) the amounts in "Summary Financial Data," and
included in the Registration Statement and the Prospectus
do not agree with the corresponding amounts in the audited
financial statements from which such amounts were derived;
or
(B) there were any decreases in net lease or
sales revenue, income before income taxes and net income
or any increases in long-term debt of the Company or any
decreases in the capital stock, working capital or the
shareholders' equity in the Company, as compared with the
amounts shown on the Company's audited Balance Sheet for
the fiscal year ended January 31, 1996, included in the
Registration Statement or the audited Statement of
Operations, for such year; and
(iii) 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) set forth in the Registration Statement
and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the
Company.
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented at
the date of such letter.
(f) The Representatives shall have received on each Closing
Date from Norton, Jacobs, Xxxx & XxXxxx, L.L.P., counsel for the
Company, an opinion, addressed to the Representatives and dated such
Closing Date, and in form and scope satisfactory to counsel for the
Underwriters, with reproduced copies or signed counterparts thereof for
each of the Underwriters, to the effect that:
(i) The Company and its Subsidiaries are corporations
duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation, with full
corporate power and authority to own, lease, license and use
their
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properties and assets and to conduct their business in the manner
described in the Prospectus. The Company and its Subsidiaries
have all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and declarations and
filings with, all federal, state, foreign, local and other
governmental authorities and all courts and other tribunals, to
own, lease, license and use their properties and assets and to
conduct their business in the manner described in the Prospectus.
The Company has no subsidiary or subsidiaries and does not
control, directly or indirectly, any corporation, partnership,
joint venture, association or other business organization, except
for those set forth on Schedule II hereto.
(ii) The Company and its Subsidiaries have been duly
qualified to do business and are in good standing under the laws
of each other jurisdiction in which they own or lease properties
or conduct any business so as to require such qualification or
are subject to no material liability or disability by reason of
failure to be so qualified in any such jurisdiction (such counsel
being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or the Subsidiaries,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(iii) The Company has authorized, issued and outstanding
capital stock as set forth in the "actual" column of the
capitalization table under the caption "Capitalization" in the
Prospectus. The certificates evidencing the shares are in due
and proper legal form. Each outstanding share of Common Stock
has been duly and validly authorized and issued and is fully paid
and nonassessable, without any personal liability attaching to
the ownership thereof, and has not been issued and is not owned
or held in violation of any preemptive right of shareholders.
The Company owns all of the shares of capital stock of the
Subsidiaries, except as disclosed in the Prospectus, and to the
knowledge of such counsel, such shares have been duly and validly
authorized and issued, are fully paid and non-assessable, and
(except as set forth in the Prospectus) are owned directly or
indirectly by the Company, and are owned by the Company free and
clear of all liens, claims, security interests, restrictions,
shareholders' agreements, voting trusts and any other
encumbrances whatsoever. There is no commitment, plan or
arrangement to issue, and no outstanding option, warrant or other
right calling for the issuance of, any share of capital stock of
the Company or any security or other instrument which by its
terms is convertible into, exercisable for or exchangeable for
capital stock of the Company, except as described in the
Prospectus. There is outstanding no security or other instrument
which by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company or any of the
Subsidiaries, except as described in the Prospectus.
(iv) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal) or
investigation before any court or before any public body or board
pending, or to the best of such counsel's knowledge threatened or
in prospect (or any basis therefor) with respect to the Company,
any of the Subsidiaries or any of their respective operations,
businesses, properties, assets or financial condition except as
may be properly described in the Prospectus or such as
individually or in the aggregate do not now have and could not
reasonably be expected in the future to have a Material Adverse
Effect.
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(v) Neither the Company nor any of the Subsidiaries or
any other party is now or is expected by the Company to be in
violation or breach of, or in default with respect to, complying
with any term, obligation or provision of any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding which is material to
the Company and known to such counsel, and to the knowledge of
such counsel, no event has occurred which with notice or lapse of
time or both would constitute such a default.
(vi) Neither the Company nor any of the Subsidiaries is
in violation or breach of, or in default with respect to, any
term of its certificate of incorporation (or other charter
document) or bylaws.
(vii) The Company has all requisite power and authority
to execute, deliver and perform this Agreement and to issue and
sell the Shares. All necessary corporate proceedings of the
Company have been taken to authorize the execution, delivery and
performance by the Company of this Agreement. This Agreement has
been duly authorized, executed and delivered by the Company, is
the legal, valid and binding obligation of the Company, and
(subject to applicable bankruptcy, insolvency and other laws
affecting the enforceability of creditor's rights generally and
the effects of general principles of equity) is enforceable as to
the Company in accordance with its terms. No consent,
authorization, approval, order, license, certificate or permit of
or from, or declaration or filing with, any federal, state,
foreign, local or other governmental authority or any court or
other tribunal is required by the Company for the execution,
delivery or performance by the Company of this Agreement (except
filings under the Act which have been made prior to the Closing
Date and consents consisting only of consents under "blue sky" or
securities laws). No consent of any party to any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding to which the Company
or any of the Subsidiaries is a party, or to which any of their
respective properties or assets are subject, is required for the
execution, delivery or performance of this Agreement; and the
execution, delivery and performance of this Agreement will not
violate, result in a breach of, conflict with or (with or without
the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding, or violate or
result in a breach of any term of the certificate of
incorporation (or other charter document) or by-laws of the
Company or any of the Subsidiaries, or violate, result in a
breach of, or conflict with any law, rule, regulation, order,
judgment, or decree binding on the Company or any of the
Subsidiaries or to which any of their respective operations,
businesses, properties or assets are subject.
(viii) The Shares are duly and validly authorized. Such
opinion delivered at each of the Closing Dates shall state that
each Share, as the case may be, to be delivered on that date is
duly and validly issued, fully paid and non-assessable, with no
personal liability attaching to the ownership thereof, and is not
issued in violation
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of any preemptive rights of shareholders, and the Underwriters
have received good title to the Shares purchased by them from the
Company for the consideration contemplated herein. The Shares
and all series of preferred stock conform to all statements
relating thereto contained in the Registration Statement or the
Prospectus.
(ix) Any contract, agreement, instrument, lease or
license required to be described in the Registration Statement or
the Prospectus has been properly described therein. Any
contract, agreement, instrument, lease or license required to be
filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to or has been incorporated as
an exhibit by reference into the Registration Statement.
(x) Insofar as statements in the Prospectus purport to
summarize the status of litigation or the provisions of laws,
rules, regulations, orders, judgments, decrees, contracts
agreements, instruments, leases or licenses, such statements have
been prepared or reviewed by such counsel and to the knowledge of
such counsel, accurately reflect the status of such litigation
and provisions purported to be summarized and are correct in all
material respects.
(xi) Neither the Company nor any of the Subsidiaries is
an "investment company" as defined in Section 3(a) of the
Investment Company Act and, if the Company and the Subsidiaries
conduct their businesses as set forth in the Prospectus, will not
become an "investment company" and will not be required to be
registered under the Investment Company Act.
(xii) No person or entity has the right to require
registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the
Registration Statement.
(xiii) The Registration Statement has become effective
under the Act. No Stop Order has been issued and no proceedings
for that purpose have been instituted or are threatened, pending
or contemplated.
(xiv) The Registration Statement, any Rule 430A
Prospectus and the Prospectus, and any amendment or supplement
thereto (other than financial statements and other financial data
and schedules which are or should be contained in any thereof, as
to which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and the
Regulations. The conditions for the use of Form S-1 have been
satisfied with respect to the Registration Statement.
(xv) Since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in an amendment or supplement to the Registration Statement or
the Prospectus which has not been set forth in such an amendment
or supplement.
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In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the
Prospectus and in conferences with officers and other representatives of
the Company, representatives of the Representatives and representatives
of the independent accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel has not independently
verified and is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement and the Prospectus (except as specified in
the foregoing opinion), on the basis of the foregoing and relying as to
materiality upon the representations of executive officers of the
Company after conferring with such executive officers, no facts have
come to the attention of such counsel which lead such counsel to believe
that the Registration Statement at the time it became effective
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, except for
the financial statements and other financial and statistical data
included therein as to which counsel need express no opinion, as amended
or supplemented on the date thereof contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering their opinion as aforesaid, such counsel may rely,
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company, provided that
executed copies of such certificates are provided to the
Representatives.
(g) The Representatives shall have received on each Closing
Date from counsel for each of the Selling Stockholders, an opinion,
addressed to the Representatives and dated such Closing Date, and in
form and scope satisfactory to counsel for the Underwriters, with
reproduced copies or signed counterparts thereof for each of the
Underwriters, to the effect that:
(i) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or beneficiary, public body or
board pending, threatened, or in prospect (or any basis therefor
known to such Selling Stockholder) with respect to such Selling
Stockholder or any of such Selling Stockholder's business,
properties or assets. Such Selling Stockholder is not in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree; nor is such Selling
Stockholder required to take any action in order to avoid such
violation or default.
(ii) Such Selling Stockholder has all requisite power
and authority to execute, deliver, and perform this Agreement.
This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder, is the legal, valid and
binding obligation of such Selling Stockholder, and is
enforceable as to such Selling Stockholder in accordance with its
terms. No consent, authorization,
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approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local or other
governmental authority or any court or other tribunal is required
by such Selling Stockholder for the execution, delivery or
performance of this Agreement (except filings under the Act which
have been made before the applicable Closing Date and such
consents consisting only of consents under "blue sky" or
securities laws which have been obtained at or prior to the date
of this Agreement) by such Selling Stockholder. No consent of
any party to any contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or
understanding to which such Selling Stockholder is a party, or to
which any of such Selling Stockholder's properties or assets are
subject, is required for the execution, delivery or performance
of this Agreement; and the execution, delivery and performance of
this Agreement will not violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default
under any such contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or
understanding, or violate, result in or breach of, or conflict
with, any law, rule, regulation, order, judgment or decree
binding on such Selling Stockholder or to which any of such
Selling Stockholder's operations, business, properties, or assets
are subject.
(iii) Such Selling Stockholder has good title to the
Selling Stockholder shares and Option Shares, as the case may be,
to be sold by such Selling Stockholder pursuant to this
Agreement, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders' agreements and
voting trusts and when delivered in accordance with this
Agreement, the Underwriters will receive good title to the
Selling Stockholder Shares and the Option Shares purchased by
them, respectively, from such Selling Stockholder, free and clear
of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts.
(iv) Neither such Selling Stockholder nor any of such
Selling Stockholder's affiliates (as defined in the Regulations)
has taken or will take, directly or indirectly, prior to the
termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the
price of any security of the Company, or which has caused or
resulted in, or which might in the future reasonably be expected
to cause or result in, stabilization or manipulation of the price
of any security of the Company, to facilitate the sale or resale
of any of the Selling Stockholder Shares or the Option Shares.
(v) All Information furnished or to be furnished to the
Company by or on behalf of such Selling Stockholder for use in
connection with the preparation of the Registration Statement and
the Prospectus is true in all respects and does not and will 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.
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(vi) Except as may be set forth in the Prospectus, such
Selling Stockholder has not incurred any liability for a fee,
commission or other compensation on account of the employment of
a broker or finder in connection with the transactions
contemplated by this Agreement.
(vii) Counsel for such Selling Stockholder has no
knowledge that, and does not believe that, any representation or
warranty of the Company in Section 4(a) is incorrect.
(viii) To counsel's knowledge, such Selling Stockholder
has not, directly or indirectly: used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees
or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment.
(ix) No transaction has occurred between such Selling
Stockholder and the Company that is required to be described in
the Registration Statement or the Prospectus.
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
satisfactory in form and substance to the Representatives and its
counsel, and the Underwriters shall have received from Xxxxxx & Xxxxxx
L.L.P., a favorable opinion, addressed to the Representatives and dated
such Closing Date, with respect to such matters as the Representatives
may reasonably request, and the Company shall have furnished to Xxxxxx &
Xxxxxx L.L.P., such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(i) The Company shall not have sustained (i) since the date of
the latest audited financial statements included in the Prospectus, any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus and (ii) since the
respective dates as of which information is given in the Prospectus,
there shall not have been any change in the capital stock, short-term
debt or long-term debt of the Company or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), in the judgment of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus.
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(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of its officers and directors,
substantially to the effect set forth in Subsection 6(a)(viii) hereof in
form and substance satisfactory to you.
(k) At the Firm Shares Closing Date, the Company shall have
executed and entered into a Warrant Agreement in substantially the form
attached hereto (Exhibit A) granting and issuing to the Representatives
a warrant to purchase pursuant to such Warrant Agreement 200,000 shares
of Common Stock.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as
possible. If the Registration Statement has become or becomes
effective with a form of prospectus omitting Rule 430A
information, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus, properly
completed, pursuant to Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to you of such
timely filing. The Company shall notify you immediately, and
confirm such notice in writing, (A) when the Registration
Statement and any post-effective amendment thereto become
effective, (B) of the receipt of any comments from the Commission
or the "blue sky" or securities authority of any jurisdiction
regarding the Registration Statement, any posteffective amendment
thereto, the Prospectus or any amendment or supplement thereto
and (C) of the receipt of any notification with respect to a Stop
Order. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus unless the
Company has furnished the Representatives a copy for their review
prior to filing and shall not file any such proposed amendment or
supplement to which the Representatives reasonably object. The
Company shall use its best efforts to prevent the issuance of any
Stop Order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) During the time when a prospectus relating to the
Shares is required to be delivered hereunder or under the Act or
the Regulations, the Company shall comply so far as it is able
with all requirements imposed upon it by the Act, as now existing
and as hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance of
sales of or dealings in the Shares in accordance with the
provisions hereof and the Prospectus. If, at any time when a
prospectus relating to the Shares is required to be delivered
under the Act and the Regulations, any event as a result of which
the Prospectus as then amended or 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 or supplement the Prospectus to
comply with the Act or the Regulations, the Company promptly
shall prepare and file with the Commission, subject to the
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fourth sentence of paragraph (i) of this Section 6(a), an
amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iii) Prior to 10:00 a.m., New York City Time, on the New
York Business Day next succeeding the date of this Agreement and
from time to time, the Company shall furnish the Underwriters
with copies of the Prospectus in New York City in such quantities
as you may reasonably request. The Company shall make generally
available to its security holders and to the Representatives as
soon as practicable, but not later than 45 days after the end of
the 12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date (or 90 days if such
12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company,
covering such 12-month period, which shall satisfy the provisions
of Section 11(a) of the Act or Rule 158 of the Regulations.
(iv) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission
the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed copies
of the Registration Statement (including all exhibits and
amendments thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act or the
Regulations, as many copies of any preliminary prospectus and the
Prospectus and any amendments thereof and supplements thereto as
the Representatives may reasonably request.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the
Shares for offer and sale under the laws of such jurisdictions as
the Representatives may designate and shall maintain such
qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be
required in connection therewith, as a condition thereof, to
qualify as a foreign corporation or to execute a general consent
to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction.
(vii) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives, and
to each other Underwriter who may so request in writing, copies
of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally
to the
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holders of any class of its capital stock and to furnish to the
Representatives a copy of each annual or other report it shall be
required to file with the Commission.
(viii) Without the prior written consent of the
Representatives, for a period of 180 days from the date on which
a public offering of the Shares commences, the Company shall not
issue, sell or register with the Commission or otherwise dispose
of, directly or indirectly, any securities of the Company (or any
securities convertible into or exercisable or exchangeable for
securities of the Company), except for the issuance of the Shares
pursuant to the Registration Statement; and the Company agrees
that it will deliver to the Representatives agreements of the
Company's officers and directors to the same effect.
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market.
(x) During a period of five years from the effective
date of the Registration Statement, the Company shall furnish to
you copies of all reports or other communications (financial or
other) furnished to stockholders and deliver to you (i) as soon
as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of
the Company is listed and (ii) such additional information
concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the
Commission).
(xi) The Company shall use the net proceeds received by
it from the sale of the Shares pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of
Proceeds."
(xii) Prior to each Closing Date and for a period of 25
days thereafter, you shall be given reasonable written prior
notice of any press release or other direct or indirect
communication and of any press conference with respect to the
Company, the financial conditions, results of operations,
business, properties, assets, liabilities of the Company, or this
offering.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
relating to the registration and public offering of the Shares including
those relating to: (i) the preparation, printing, filing and
distribution of the Registration Statement including all exhibits
thereto, each preliminary prospectus, the Prospectus, all amendments and
supplements to the Registration Statement and the Prospectus, and any
documents required to be delivered with any Preliminary Prospectus or
the Prospectus, and the printing, filing and distribution of the
Agreement Among Underwriters, this Agreement and related documents; (ii)
the preparation and delivery of
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certificates for the Shares to the Underwriters; (iii) the registration
or qualification of the Shares for offer and sale under the securities
or Blue Sky laws of the various jurisdictions referred to in Section
6(a)(vi), including the fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and
the preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters
of copies of each preliminary prospectus, the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonably requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be sold;
(v) the filing fees of the National Association of Securities Dealers,
Inc. in connection with its review of the terms of the public offering;
(vi) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of all reports and
information required by Section 6(a)(vii); (vii) inclusion of the Shares
for quotation on the Nasdaq National Market; (viii) the cost and charges
of any transfer agent or registration; and (ix) all transfer taxes, if
any, with respect to the sale and delivery of the Shares by the Company
to the Underwriters. In addition, the Company will pay the
Representatives a nonaccountable expense allowance in an amount equal to
1.0% of the gross amount of funds raised by the offering of the Shares.
Except as otherwise contemplated by Section 9 hereof, the Underwriters
will pay their own counsel fees and expenses to the extent not otherwise
covered by clause (iii) above, and their own travel and travel-related
expenses in connection with the distribution of the Shares.
7. Indemnification.
(a) (i) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the Exchange Act
or other federal, state or foreign law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein such fact required to be stated
therein or necessary to make such statements therein not misleading. The
Selling Stockholders agree, jointly and severally, to indemnify such
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities
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arise out of or are based upon any untrue statement or alleged untrue
statement or alleged untrue statement of a material fact with respect to
such Selling Stockholders contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto (which amendments or supplements are furnished to
such Selling Stockholders), or which arise out of or are based upon any
omission or alleged omission to state therein such fact required to be
stated therein or necessary to make such statements therein not
misleading, but only with reference to information relating to such
Selling Stockholders furnished in writing to the Company by or on behalf
of such Selling Stockholders expressly for use in connection with the
preparation of the Registration Statement and Prospectus or any
amendment thereof or supplement thereto. Such indemnity shall not inure
to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter if
such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement, in
reliance upon and conformity with information furnished in writing to
the Company by the Representatives on behalf of any Underwriter
specifically for use therein. The obligations of each of the Selling
Stockholders, pursuant to this Section 7(a) and Section 8, shall be
limited to an amount not exceeding the product of the Per Share Price to
Public of the Shares as set forth on the cover page of the Prospectus
and the number of Shares being sold by each of them. In no event shall
the indemnification agreement contained in this Section 7(a) inure to
the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any losses, claims, damages,
liabilities or actions arising from the sale of the Shares upon the
public offering to any person by such Underwriter if such losses,
claims, damages, liabilities or actions arise out of, or are based upon,
a statement or omission or alleged omission in a preliminary prospectus
and if, in respect to such statement, omission or alleged omission, the
Prospectus differs in a material respect from such preliminary
prospectus and a copy of the Prospectus has not been sent or given to
such person at or prior to the confirmation of such sale to such person.
This indemnity agreement will be in addition to any liability which the
Company and Selling Stockholders may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement and each
Selling Stockholder, to the same extent as the foregoing indemnity from
the Company and the Selling Stockholders to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any Preliminary Prospectus, any
Rule 430A Prospectus, the Registration Statement or the Prospectus, or
any amendment thereof or supplement thereto, which were made in reliance
upon and in conformity with information furnished in writing to the
Company by the Representatives on behalf of any Underwriter for specific
use therein; provided, however, that the obligation of each Underwriter
to indemnify the Company (including any controlling person, director or
officer thereof) and the Selling Stockholders shall be limited to the
excess of the net proceeds received by such Underwriter
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from the offering of Shares and all expenses, penalties and other
damages incurred by such Underwriter by reason of such untrue statement
or omission or alleged untrue statement or omission. For all purposes
of this Agreement the amounts of the selling concession and reallowance
set forth in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for inclusion in
any Preliminary Prospectus, any Rule 430A Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement thereto.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 7(a) or 7(b)
shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (ii) the indemnified party shall
have reasonably concluded that there may be a conflict of interest
between the indemnifying parties and the indemnified party in the
conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on
behalf of the indemnified party) or (iii) the indemnifying parties shall
not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of
which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or claim
effected without its written consent.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Sections 7(a) and (b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company, the Selling Stockholders or the
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Underwriters, the Company, the Selling Stockholders and the Underwriters shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as the Selling
Stockholders, persons who control the Company within the meaning of the Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who may also be liable for contribution) to which the Company and
the Selling Stockholders 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 and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Stockholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts but before deducting expenses) received by the Company, or the
Selling Stockholders, from the sale of the Shares, as set forth in the table on
the cover page of the Prospectus (but not taking into account the use of the
proceeds of such sale of Shares by the Company), bear to (y) the underwriting
discount received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company, the Selling
Stockholders and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8, (i) in no case shall any Underwriter (except as may be
provided in the Agreement Among Underwriters) be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, (ii) in no case shall any of the
Selling Stockholders be liable or responsible for any amount in excess of the
product of the Per Share Price to public of the Shares as set forth on the
cover page of the Prospectus and the number of Shares being sold by each of
them subject to the limitation expressed in Section 7(a), and (iii) the Company
shall be liable and responsible for any amount in excess of the underwriting
discount and the amount referred to in clause (ii); provided, however, that 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, if any, who controls an Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the
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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 clauses (i), (ii) and (iii) in the immediately preceding
sentence of this Section 8. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this Section.
No party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent. The Underwriters'
obligations to contribute pursuant to this Section 8 are several in proportion
to their respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to
the Shares to be purchased on any Closing Date by the Representatives by
notifying the Company at any time prior to the purchase of the Shares:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted, or
in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any outbreak
or material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such as
to make it, in the judgment of the Representatives, inadvisable to
proceed with the Offering; (iii) if there shall be such a material
adverse change in, general financial, political or economic conditions
or the effect of international conditions on the financial markets in
the United States such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (iv)
if trading in the Shares has been suspended by the Commission or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. or the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for securities shall
have been fixed, or maximum ranges for prices for securities have been
required, by said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc., or any other governmental or
regulatory authority; or (v) if a banking moratorium has been declared
by any state or federal authority, or
(b) at or before any Closing Date, if any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Stockholders shall be under any liability
to any Underwriter, and no Underwriter shall be under any liability to the
Company or the Selling Stockholders, except that (y) if this Agreement is
terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of their counsel) incurred by them in connection with the
proposed
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purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this Agreement,
without some reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of liability to the
Company and the Selling Stockholders or to the other Underwriters for damages
occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If
no such arrangements have been made by the close of business on the business
day following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event shall
the maximum number of Shares that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 10 by more
than one-ninth of such number of Shares without the written consent of
such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Representatives to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and the Selling
Stockholders and without liability on the part of the Company and the Selling
Stockholders, except in both cases as provided in Sections 6(b), 7, 8 and 9.
The provisions of this
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Section shall not in any way affect the liability of any defaulting Underwriter
to the Company or the Selling Stockholders or the nondefaulting Underwriters
arising out of such default. A substitute underwriter hereunder shall become
an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Stockholders, and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Selling
Stockholder or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 6(b), 7, 8 and 9 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and the Selling Stockholders and their respective successors and
assigns and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, the Company, and the directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser
of Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered, or by telefax or telegraph if subsequently confirmed by letter,
(a) if to the Representatives, to Xxxxxx & Xxxxxxx, Inc., Two World Financial
Center, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxx, Managing Director, telecopy: (000) 000-0000, (b) if to the
Company, to the Company's agent for service as such agent's address appears on
the cover page of the Registration Statement, and (c) if to any Selling
Stockholder, to such Selling Stockholder at its address set forth in Schedule
III hereto.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
person or persons or entity or entities require.
All section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or inference shall be
derived therefrom.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
MITCHAM INDUSTRIES, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Xxxx X. Xxxxxxx
ALAMO ATLAS GROUP, INC.
By:
---------------------------------------
Name:
Confirmed on behalf of themselves and as the
Representatives of the several Underwriters
named in Schedule I annexed hereto:
XXXXXX & XXXXXXX, INC.
XXXXXXX & COMPANY INTERNATIONAL
By:
-----------------------------------
(Xxxxxx & Xxxxxxx, Inc.)
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SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
NAME OF UNDERWRITER PURCHASED
------------------- --------------------
Xxxxxx & Xxxxxxx, Inc. . . . . . . . . . . . .
Xxxxxxx & Company International . . . . . . . .
Total . . . . . . . . . . . . .
-----------
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SCHEDULE II
SUBSIDIARIES
------------
Mitcham Canada Ltd. . . . . . . . . . . . . . . . . . . . .
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SCHEDULE III
Xxxxx X. Xxxxxxx, Xx. . . . . . . . . . . . . . . . . . . .
Address:
Xxxxx X. Xxxxxxx, Xx. . . . . . . . . . . . . . . . . . . .
Address:
Xxxx X. Xxxxxxx . . . . . . . . . . . . . . . . . . . . . .
Address:
Alamo Atlas Group, Inc. . . . . . . . . . . . . . . . . . .
Address:
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EXHIBIT A
WARRANT FOR COMMON STOCK
W/CASHLESS EXERCISE
MITCHAM INDUSTRIES, INC.
Warrant for the Purchase of Shares of Common Stock,
par value $0.01 per share
No. _______ __________ Shares
THIS CERTIFIES that, for receipt in hand of $________, and other
value received, ________________________ (the "Holder"), is entitled to
subscribe for and purchase from MITCHAM INDUSTRIES, INC., a Texas corporation
(the "Company"), upon the terms and conditions set forth herein, at any time or
from time to time after [one year after the effective date], and before 5:00
P.M. on [two years after the effective date], New York time (the "Exercise
Period"), __________ shares of the Company's Common Stock, par value $0.01 per
share ("Common Stock"), at a price of $_____ per share [120% of the offering
price] (the "Exercise Price"). This Warrant is the warrant or one of the
warrants (collectively, including any warrants issued upon the exercise or
transfer of any such warrants in whole or in part, the "Warrants") issued
pursuant to the Underwriting Agreement, dated __________, between Xxxxxx &
Xxxxxxx, Inc. and Xxxxxxx & Company International, as representatives of the
several Underwriters named therein, and the Company. As used herein the term
"this Warrant" shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of the exercise or transfer of this Warrant
in whole or in part. This Warrant may not be sold, transferred, assigned or
hypothecated until [one year after the effective date] except that it may be
transferred, in whole or in part, to (i) one or more officers or partners of
the Holder (or the officers or partners of any such partner); (ii) any other
underwriting firm or member of the selling group which participated in the
public offering of Common Stock (the "Offering") which commenced on [effective
date] (or the officers or partners of any such firm); (iii) a successor to the
Holder, or the officers or partners of such successor; (iv) a purchaser of
substantially all of the assets of the Holder; or (v) by operation of law; and
the term the "Holder" as used herein shall include any transferee to whom this
Warrant has been transferred in accordance with the above.
The number of shares of Common Stock issuable upon exercise of
the Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from
time to time as hereinafter set forth.
1. Manner of Exercise; Payment for Shares. This Warrant may be
exercised during the Exercise Period, as to the whole or any lesser number of
whole Warrant Shares, by the surrender of this Warrant (with the election in
the form attached hereof duly executed) to the Company at its office at Post
Office Box 1175, 00000 Xxxxxxx 00 Xxxxx, Xxxxxxxxxx, Xxxxx 00000, or at such
other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the Company in an
amount equal to the Exercise Price multiplied by the number of Warrant Shares
for which this Warrant is being exercised (the "Stock Purchase Price").
37
2. Cashless Exercise. (a) In lieu of the payment of the Stock
Purchase Price, the Holder shall have the right (but not the obligation), to
require the Company to convert this Warrant, in whole or in part, into shares
of Common Stock (the "Conversion Right") as provided for in this Section 2.
Upon exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Stock Purchase Price) that number
of shares of Common Stock (the "Conversion Shares") equal to the quotient
obtained by dividing (x) the value of this Warrant (or portion thereof as to
which the Conversion Right is being exercised if the Conversion Right is being
exercised in part) at the time the Conversion Right is exercised (determined by
subtracting the aggregate Stock Purchase Price of the shares of Common Stock as
to which the Conversion Right is being exercised in effect immediately prior to
the exercise of the Conversion Right from the aggregate Current Market Price
(as defined in Section 6(e) hereof) of the shares of Common Stock as to which
the Conversion Right is being exercised immediately prior to the exercise of
the Conversion Right) by (y) the Current Market Price of one share of Common
Stock immediately prior to the exercise of the Conversion Right.
(b) The Conversion Rights provided under this Section 2 may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the Conversion Right, the
Holder shall surrender to the Company, at its offices, this Warrant with the
Notice of Conversion in the form attached hereof duly executed. The
presentation and surrender shall be deemed a waiver of the Holder's obligation
to pay all or any portion of the aggregate purchase price payable for the
shares of Common Stock as to which such Conversion Right is being exercised.
This Warrant (or so much thereof as shall have been surrendered for conversion)
shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of such Warrant for conversion in accordance
with the foregoing provisions.
3. Delivery of Warrant Shares; Partial Exercise. Upon each exercise
of the Holder's rights to purchase Warrant Shares or Conversion Shares, the
Holder shall be deemed to be the holder of record of the Warrant Shares or
Conversion Shares issuable upon such exercise or conversion, notwithstanding
that the transfer books of the Company shall then be closed or certificates
representing such Warrant Shares or Conversion Shares shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise or conversion of this Warrant, the Company shall issue and deliver to
the Holder a certificate or certificates for the Warrant Shares or Conversion
Shares issuable upon such exercise or conversion, registered in the name of the
Holder or its designee. If this Warrant should be exercised or converted in
part only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the right of the Holder to
purchase the balance of the Warrant Shares (or portions thereof) subject to
purchase hereunder.
4. Registry; Transfer of Warrants. Any Warrants issued upon the
transfer or exercise or conversion in part of this Warrant shall be numbered
and shall be registered in a Warrant Register as they are issued. The Company
shall be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a
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fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a
new Warrant or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares (or portions
thereof), upon surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no obligation to cause
Warrants to be transferred on its books to any person if, in the opinion of
counsel to the Company, such transfer does not comply with the provisions of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations thereunder.
5. Reservation of Shares; Shares to be Fully Paid. The Company
shall at all times reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of providing for the exercise of
the rights to purchase all Warrant Shares and/or Conversion Shares granted
pursuant to the Warrants, such number of shares of Common Stock as shall, from
time to time, be sufficient therefor. The Company covenants that all shares of
Common Stock issuable upon exercise of this Warrant, upon receipt by the
Company of the full Exercise Price therefor, and all shares of Common Stock
issuable upon conversion of this Warrant, shall be validly issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders, optionholders, warrantholders and any other persons and the
Holders will receive good title to the securities purchased by them,
respectively, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements and voting trusts which might
be created by acts or omissions to act of the Company.
6. Anti-Dilution Provisions. (a) In case the Company shall at any
time after the date the Warrants were first issued (i) declare a dividend on
the outstanding Common Stock payable in shares of its capital stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then, in each case, the Exercise Price,
and the number and kind of securities issuable upon exercise or conversion of
this Warrant, in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination, or reclassification, shall
be proportionately adjusted so that the Holder after such time shall be
entitled to receive the aggregate number and kind of shares which, if such
Warrant had been exercised or converted immediately prior to such time, he
would have owned upon such exercise or conversion and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification.
Such adjustment shall be made successively whenever any event listed above
shall occur.
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(b) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders of the
Company in connection with a consolidation or merger in which the Company is
the continuing corporation) evidences of its indebtedness, cash (other than any
cash dividend which, together with any cash dividends paid within the 12 months
prior to the record date for such distribution, does not exceed 5% of the
Current Market Price at the record date for such distribution) or assets (other
than distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock, then, in each
case, the Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator
of which shall be (i) the Current Market Price per share of Common Stock on
such record date, less the fair market value (as determined in good faith by
the board of directors of the Company, whose determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness or
assets so to be distributed, or of such rights, options, or warrants or
convertible or exchangeable securities, or the amount of such cash, applicable
to one share, and the denominator of which shall be (ii) such Current Market
Price per share of Common Stock. Such adjustment shall be made whenever any
such distribution is made, and shall become effective on the record date for
the determination of stockholders entitled to receive such distribution.
(c) For the purpose of any computation under this Section 6,
the Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices for the 30 consecutive trading
days immediately preceding the date in question. The closing price for each
day shall be the last reported sales price regular way or, in case no such
reported sale takes place on such day, the closing bid price regular way, in
either case on the principal national securities exchange (including, for
purposes hereof, the NASDAQ National Market) on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported bid price
for the Common Stock as furnished by the National Association of Securities
Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer
reporting such information. If on any such date the Common Stock is not listed
or admitted to trading on any national securities exchange and is not quoted by
NASDAQ or any similar organization, the fair value of a share of Common Stock
on such date, as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error, shall
be used.
(d) No adjustment in the Exercise Price shall be required if
such adjustment is less than $.05; provided, however, that any adjustments
which by reason of this Section 6 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 6 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(e) In any case in which this Section 6 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the Holder, if the Holder exercised or converted this Warrant
after such record date, the shares of Common Stock, if any, issuable upon such
exercise or conversion over and above the shares of Common Stock, if any,
issuable upon such
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exercise or conversion on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to the
Holder a due xxxx or other appropriate instrument evidencing the Holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(f) Upon each adjustment of the Exercise Price as a result of
the calculations made in this Section, this Warrant shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that number of shares
(calculated to the nearest thousandth) obtained by dividing (i) the product
obtained by multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise Price in
effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in
effect after such adjustment of the Exercise Price.
(g) Whenever there shall be an adjustment as provided in this
Section 6, the Company shall promptly cause written notice thereof to be sent
by registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.
(h) The Company shall not be required to issue fractions of
shares of Common Stock or other capital stock of the Company upon the exercise
or conversion of this Warrant. If any fraction of a share would be issuable on
the exercise or conversion of this Warrant (or specified portions thereof), the
Company shall purchase such fraction for an amount in cash equal to the same
fraction of the Current Market Price of such share of Common Stock on the date
of exercise or conversion of this Warrant.
7. Merger or Consolidation of the Company; Sale, Lease, or
Conveyance of Property; Reclassification of the Shares. (a) In case of any
consolidation with or merger of the Company with or into another corporation
(other than a merger or consolidation in which the Company is the surviving or
continuing corporation), or in case of any sale, lease, or conveyance to
another corporation of the property and assets of any nature of the Company as
an entirety or substantially as an entirety, such successor, leasing, or
purchasing corporation, as the case may be, shall (i) execute with the Holder
an agreement providing that the Holder shall have the right thereafter to
receive upon exercise or conversion of this Warrant solely the kind and amount
of shares of stock and other securities, property, cash, or any combination
thereof receivable upon such consolidation, merger, sale, lease, or conveyance
by a holder of the number of shares of Common Stock for which this Warrant
might have been exercised or converted immediately prior to such consolidation,
merger, sale, lease, or conveyance, and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which shall be as
nearly equivalent as practicable to the adjustments in Section 6.
(b) In case of any reclassification or change of the shares of
Common Stock issuable upon exercise or conversion of this Warrant (other than a
change in par value or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the Company is the
continuing corporation
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and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from no par value to a specified par value, or
as a result of a subdivision or combination, but including any change in the
shares into two or more classes or series of shares), the Holder shall have the
right thereafter to receive upon exercise or conversion of this Warrant solely
the kind and amount of shares of stock and other securities, property, cash, or
any combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of shares of Common Stock
for which this Warrant might have been exercised or converted immediately prior
to such reclassification, change, consolidation, or merger. Thereafter,
appropriate provision shall be made for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 6.
(c) The above provisions of this Section 7 shall similarly
apply to successive reclassifications and changes of shares of Common Stock and
to successive consolidations, mergers, sales, leases, or conveyances.
8. Prior Notice of Certain Events. In case at any time the Company
shall propose
(a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution
(other than regularly scheduled cash dividends which are not in a
greater amount per share than the most recent such cash dividend) to all
holders of Common Stock; or
(b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares
of Common Stock or any other rights, warrants, or other securities; or
(c) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale, lease, or
conveyance of property, described in Section 7; or
(d) to effect any liquidation, dissolution, or winding-up of
the Company; or
(e) to take any other action which would cause an adjustment
to the Exercise Price;
then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would
require an adjustment to the Exercise Price.
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0. Taxes. The issuance of any shares or other securities upon the
exercise or conversion of this Warrant, and the delivery of certificates or
other instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not
be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
10. Indemnification. (a) Subject to the conditions set forth below,
the Company agrees to indemnify and hold harmless each Eligible Holder, its
officers, directors, partners, employees, agents, and counsel, and each person,
if any, who controls any such person within the meaning of Section 15 of the
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all loss, liability, charge, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 10, but not be limited to, reasonable attorneys' fees and any and all
reasonable expense whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Underwriters'
Securities, or (B) in any application or other document or communication (in
this Section 10 collectively called an "application") executed by or on behalf
of the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to register or qualify any of
the Underwriters' Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities exchange; or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Eligible Holder by or
on behalf of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Warrant. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Warrant.
If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the Company
in writing of the institution of such action (but the failure so to notify
shall not relieve the Company from any liability pursuant to this Section 10(a)
and the Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties) and payment of expenses. Such indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company
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shall not have promptly employed counsel reasonably satisfactory to such
indemnified party or parties to have charge of the defense of such action or
such indemnified party or parties shall have reasonably concluded that there
may be a conflict of interest between the indemnified party or parties and the
Company in the conduct of the defense of such action in any of which events
such fees and expenses shall be borne by the Company and the Company shall not
have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this Section 10 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written
consent of each indemnified party that is not released as described in this
sentence, settle or compromise any action, or permit a default or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, in respect of which indemnity may be sought hereunder
(whether or not any indemnified party is a party thereto), unless such
settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Eligible Holders of the commencement
of any litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of any Underwriters' Securities or any
preliminary prospectus, prospectus, registration statement, or amendment or
supplement thereto, or any application relating to any sale of any
Underwriters' Securities.
(b) The Holder agrees to indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who shall have signed
any registration statement covering Underwriters' Securities held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their
respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 10(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information furnished to the Company with respect to
the Holder by or on behalf of the Holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, and in respect of which indemnity may be sought against the Holder
pursuant to this Section 10(b), the Holder shall have the rights and duties
given to the Company, and the Company and each other person so indemnified
shall have the rights and duties given to the indemnified parties, by the
provisions of Section 10(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 10(a)
or 10(b) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made
by or on behalf of any director of the Company, any officer of the Company who
signed any such registration statement, any controlling person of the Company,
and its or their respective counsel), as one entity, and the Eligible Holders
of the Underwriters' Securities included in such registration in the aggregate
(including for this purpose any contribution by or on behalf of an indemnified
party),
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as a second entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault of the
Company and such Eligible Holders in connection with the facts which resulted
in such losses, liabilities, claims, damages, and expenses. The relative
fault, in the case of an untrue statement, alleged untrue statement, omission,
or alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission, or alleged omission relates to
information supplied by the Company or by such Eligible Holders, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and the Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Eligible
Holders for contribution were determined by pro rata or per capita allocation
of the aggregate losses, liabilities, claims, damages, and expenses (even if
the Holder and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 10(c). In no case shall
any Eligible Holder be responsible for a portion of the contribution obligation
imposed on all Eligible Holders in excess of its pro rata share based on the
number of shares of Common Stock owned (or which would be owned upon exercise
of all Underwriters' Securities) by it and included in such registration as
compared to the number of shares of Common Stock owned (or which would be owned
upon exercise of all Underwriters' Securities) by all Eligible Holders and
included in such registration. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 10(c), each person, if any,
who controls any Eligible Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent, and counsel of each such Eligible Holder or control person
shall have the same rights to contribution as such Eligible Holder or control
person and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of the
Company who shall have signed any such registration statement, each director of
the Company, and its or their respective counsel shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 10(c). Anything in this Section 10(c) to the contrary notwithstanding,
no party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 10(c) is
intended to supersede any right to contribution under the Act, the Exchange Act
or otherwise.
11. Replacement of Warrants. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction, or mutilation of any Warrant
(and upon surrender of any Warrant if mutilated), and upon reimbursement of the
Company's reasonable incidental expenses, the Company shall execute and deliver
to the Holder thereof a new Warrant of like date, tenor, and denomination.
12. No Rights as a Stockholder. The Holder of any Warrant shall not
have, solely on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of meetings of
stockholders or of any other proceedings of the Company, except as provided in
this Warrant.
13. Headings. The headings in this Warrant are for convenience only
and shall not limit or otherwise affect the meaning.
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00. Governing Law. This Warrant shall be construed in accordance
with the laws of the State of New York applicable to contracts made and
performed within such State, without regard to principles of conflicts of law.
Dated: , 1997
MITCHAM INDUSTRIES, INC.
By:
----------------------------------
Xxxxx X. Xxxxxxx
[Seal]
------------------------------
Secretary
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns, and transfers unto __________________ a Warrant to purchase __________
shares of Common Stock, par value $0.01 per share, of Mitcham Industries, Inc.
(the "Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _____________________________________
attorney to transfer such Warrant on the books of the Company, with full power
of substitution.
Dated:
----------------------------
Signature
------------------------
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
A-11
47
To: Mitcham Industries, Inc.
Post Office Box 1175
0000 Xxxxxxx 00 Xxxxx
Xxxxxxxxxx, Xxxxx 00000
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in
the amount of $_________ in accordance with the terms thereof, and requests
that certificates for such securities be issued in the name of, and delivered
to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.
Dated: Name
---------------------------- ------------------------
(Print)
Address:
--------------------------------------------------
-------------------------
(Signature)
A-12
48
To: Mitcham Industries, Inc.
Post Office Box 1175
0000 Xxxxxxx 00 Xxxxx
Xxxxxxxxxx, Xxxxx 00000
CASHLESS EXERCISE FORM
(To be executed upon conversion of the attached Warrant)
The undersigned hereby irrevocably elects to surrender its Warrant for
the number of shares of Common Stock as shall be issuable pursuant to the
cashless exercise provisions of the within Warrant, in respect of _____ shares
of Common Stock underlying the within Warrant, and requests that certificates
for such securities be issued in the name of and delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the addressed stated below.
Dated: Name
---------------------------- ------------------------
(Print)
Address:
--------------------------------------------------
-------------------------
(Signature)
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