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EXHIBIT 1.1
5,000,000 SHARES*
INSPIRE INSURANCE SOLUTIONS, INC.
COMMON STOCK
____________________
UNDERWRITING AGREEMENT
St. Petersburg, Florida
August ___, 1997
Xxxxxxx Xxxxx & Associates, Inc.
Southwest Securities, Inc.
As Representative of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
INSpire Insurance Solutions, Inc., a Texas corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell an aggregate of 2,775,000 shares of common stock, $.01 par value
per share (the "Common Stock"), of the Company, to the several Underwriters
named in Schedule I hereto (the "Underwriters"), and that certain shareholder
of the Company named in Schedule II hereto (the "Selling Shareholder")
proposes, subject to the terms and conditions stated herein, to sell to the
Underwriters an aggregate of 2,225,000 shares of the Common Stock (the
aggregate of such 5,000,000 shares to be sold by the Company and the Selling
Shareholder hereinafter referred to as the "Firm Shares"). In addition, the
Company and the Selling Shareholder have agreed to sell to the Underwriters,
upon the terms and conditions set forth herein, up to an additional 750,000
shares (the "Additional Shares") of the Common Stock to cover over-allotments
by the Underwriters, if any. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares."
The Company and the Selling Shareholder wish to confirm as follows
their agreement with you and the other several Underwriters, on whose behalf
you are acting, in connection with the several purchases of the Shares from the
Company and the Selling Shareholder.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the
________________________
* Plus an additional 750,000 shares subject to the Underwriters'
over-allotment option.
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provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-1 (File No. 333-31173), including a prospectus
subject to completion, relating to the Shares. Such registration statement, as
amended at the time when it becomes effective and as thereafter amended by
post-effective amendment, is referred to in this Agreement as the "Registration
Statement." The prospectus in the form included in the Registration Statement,
or, if the prospectus included in the Registration Statement omits information
in reliance upon Rule 430A under the Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Act or
as part of a post-effective amendment to the Registration Statement after the
Registration Statement becomes effective, the prospectus as so filed, is
referred to in this Agreement as the "Prospectus." The prospectus subject to
completion in the form included in the Registration Statement at the time of
the initial filing of such Registration Statement with the Commission and as
such prospectus is amended from time to time until the date of the Prospectus
is referred to in this Agreement as the "Prepricing Prospectus."
2. AGREEMENTS TO SELL AND PURCHASE. The Company and the Selling
Shareholder (in accordance with Schedule II hereof) hereby agree, severally and
not jointly, to sell the Firm Shares to the Underwriters and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions set
forth herein, each Underwriter agrees, severally and not jointly, to purchase
from the Company and the Selling Shareholder at a purchase price of $____ per
Share (the "purchase price per Share"), the aggregate number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such
number of Firm Shares as adjusted pursuant to Section 11 hereof).
The Company and the Selling Shareholder hereby also agree, severally
and not jointly, to sell to the Underwriters, and upon the basis of the
representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right for 30 days from the date
of the Prospectus to purchase from the Company and the Selling Shareholder up
to an aggregate of 750,000 Additional Shares (in accordance with Schedule II
hereof) at the purchase price per Share for the Firm Shares. The Additional
Shares may be purchased solely for the purpose of covering over-allotments, if
any, made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears the
same proportion to the total number of Additional Shares to be purchased by the
Underwriters as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares as adjusted
pursuant to Section 11 hereof) bears to the total number of Firm Shares. Upon
any election by the Underwriters to purchase less than all the Additional
Shares, the aggregate number of Additional Shares to be purchased from the
Company and the aggregate number of Additional Shares to be purchased from the
Selling Shareholder by all the Underwriters shall be in the same proportion as
the maximum number of Additional Shares that may be purchased from the
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Company and the maximum number of Additional Shares that may be purchased from
the Selling Shareholder as set forth on Schedule II.
3. TERMS OF PUBLIC OFFERING. The Company and the Selling
Shareholder have been advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
The Underwriters will offer a portion of the Firm Shares to be
purchased from the Company hereunder, not to exceed 175,000 Firm Shares in the
aggregate (the "Reserved Shares"), to directors, officers, employees and
designees specified to you by the Company in writing not less than two business
days prior to the time the Registration Statement becomes effective. The
Reserved Shares will be offered to such persons at a price equal to 96% of the
per share price to public set forth on the cover page of the Prospectus. The
persons to whom the Reserved Shares are offered shall in all cases be subject
to applicable laws, rules and regulations and to your reasonable approval. The
number of Firm Shares to be offered to the public shall be reduced by the
number of Reserved Shares offered as described in this paragraph, and any
Reserved Shares not purchased pursuant to such offers shall be offered by the
Underwriters to the public in accordance with this Agreement.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx, at 10:00 a.m., Dallas, Texas time, on , 1997
(the "Closing Date"). The place of closing for the Firm Shares and the Closing
Date may be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx,
at 10:00 a.m., Dallas, Texas time, on such date or dates (the "Additional
Closing Date") (which may be the same as the Closing Date but shall in no event
be earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to) as shall
be specified in a written notice from you on behalf of the Underwriters to the
Company and the Selling Shareholder of the Underwriters' determination to
purchase a number, specified in such notice, of Additional Shares. Such notice
may be given to the Company and the Selling Shareholder by you at any time
within 30 days after the date of the Prospectus. The place of closing for the
Additional Shares and the Additional Closing Date may be varied by agreement
among you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., St. Petersburg, Florida time, not
later than the second full business day preceding the Closing Date or the
Additional Closing Date, as the case may be. Such certificates shall be
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made available to you in St. Petersburg, Florida for inspection and packaging
not later than 9:30 a.m., St. Petersburg, Florida time, on the business day
immediately preceding the Closing Date or the Additional Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Additional Closing Date, as the case may be, against payment of the
purchase price therefor by wire transfer to the accounts of the Company and the
Selling Shareholder in accordance with wire transfer instructions provided to
you at least two business days prior to the Closing Date.
5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company
covenants and agrees with the several Underwriters as follows:
a. The Company will use its best efforts to cause the
Registration Statement to become effective and will advise you
promptly and, if requested by you, will confirm such advice in writing
(i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed
pursuant to Rule 424(b) under the Act, (iii) of any request by the
Commission for amendments or supplements to the Registration
Statement, any Prepricing Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction or the initiation of any proceeding for such
purposes and (v) within the period of time referred to in the first
sentence of Section 5(e) below, of any change in the Company's
condition (financial or other), business, properties, net worth,
results of operations, or prospects or of any event that comes to the
attention of the Company that makes any statement made in the
Registration Statement or the Prospectus (as then amended or
supplemented) untrue in any material respect or that requires the
making of any additions thereto or changes therein in order to make
the statements therein not misleading in any material respect, or of
the necessity to amend or supplement the Prospectus (as then amended
or supplemented) to comply with the Act or any other law. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
b. The Company will furnish to you, without charge, two
signed duplicate originals of the Registration Statement as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits thereto, and will also furnish
to you, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment
thereto as you may reasonably request.
c. The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus of which you shall not previously have been advised (with a
reasonable opportunity to review such amendment or supplement) or to
which you have reasonably objected after being so advised.
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d. Prior to the execution and delivery of this
Agreement, the Company has delivered or will deliver to you, without
charge, in such quantities as you have requested or may hereafter
reasonably request, copies of each form of the Prepricing Prospectus.
The Company consents to the use, in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by
dealers, prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Company.
e. As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for such
period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or a dealer, and for so long a period as you
may reasonably request for the distribution of the Shares, the Company
will deliver to each Underwriter, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto) as they
may reasonably request. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance
with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold,
both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the
Act to be delivered in connection with sales by any Underwriter or
dealer. If at any time during the period during which a Prospectus is
required to be delivered in accordance with the Act any event shall
occur that in the judgment of the Company or in the opinion of counsel
for the Underwriters is required to be set forth in the Prospectus (as
then amended or supplemented) or should be set forth therein in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Act or any other
law, the Company will forthwith prepare and, subject to Sections 5(a)
and 5(c) hereof, file with the Commission and use its best efforts to
cause to become effective as promptly as possible an appropriate
supplement or amendment thereto, and will furnish to each Underwriter
who has previously requested Prospectuses, without charge, a
reasonable number of copies thereof.
f. The Company will cooperate with you and counsel for
the Underwriters in connection with the registration or qualification
of the Shares for offering and sale by the several Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as
you may reasonably designate and will file such consents to service of
process or other documents as may be reasonably necessary in order to
effect such registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to service of process in suits, other than
those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
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g. The Company will make generally available to its
security holders a consolidated earnings statement (in form complying
with the Provisions of Rule 158), which need not be audited, covering
a twelve- month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter,
as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Act.
h. During the period ending five years from the date
hereof, the Company will furnish to you and, upon your request, to
each of the other Underwriters, (i) as soon as available, a copy of
each proxy statement, quarterly or annual report or other report of
the Company mailed to shareholders or filed with the Commission, the
NASD or any securities exchange and (ii) from time to time such other
information concerning the Company as you may reasonably request.
i. If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (except
pursuant to a termination under Section 11 or 12 hereof) or if this
Agreement shall be terminated by the Underwriters because of any
inability, failure or refusal on the part of the Company or the
Selling Shareholder to perform any agreement herein or to comply with
any of the terms or provisions hereof, the Company agrees to reimburse
you and the other Underwriters for all out-of-pocket expenses
(including travel expenses and reasonable fees and reasonable expenses
of counsel for the Underwriters but excluding wages and salaries paid
by you) reasonably incurred by you in connection herewith.
j. The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder for the purposes set forth
under "Use of Proceeds" in the Prospectus.
k. If Rule 430A under the Act is employed, the Company
will timely file the Prospectus pursuant to Rule 424(b) under the Act.
l. For a period of 180 days after commencement of the
public offering of the Shares by the Underwriters, without the prior
written consent of Xxxxxxx Xxxxx & Associates, Inc., the Company will
not directly or indirectly issue, sell, offer to sell, contract to
sell or otherwise dispose of or transfer any shares of Common Stock or
rights to purchase shares of Common Stock, except to the Underwriters
pursuant to this Agreement; provided, however, that the Company may
(i) issue to participants in its Employee Stock Purchase Plan, as
currently in effect, shares of Common Stock pursuant to the terms of
such Employee Stock Purchase Plan, (ii) issue to participants in its
Director Stock Option Plan, as currently in effect, shares of Common
Stock upon the exercise of currently outstanding options that are or
that become exercisable during such 180-day period and may grant
additional options under the Director Stock Option Plan and (iii)
issue to participants in its Amended and Restated 1997 Stock Option
Plan, as currently in effect, shares of Common Stock upon the exercise
of currently outstanding options that are or that become exercisable
during such 180-day period and may grant
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additional options under the Amended and Restated 1997 Stock Option
Plan, provided that without the prior written consent of Xxxxxxx Xxxxx
& Associates, Inc., such additional options shall not be exercisable
during such 180-day period.
m. Prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company will furnish to you, as promptly
as possible, copies of any unaudited interim consolidated financial
statements of the Company and its subsidiaries for any quarterly
period subsequent to the periods covered by the financial statements
appearing in the Prospectus.
n. The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
o. The Company will not at any time, directly or
indirectly take any action designed, or which might reasonably be
expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
p. The Company will use its best efforts to qualify or
register its Common Stock for sale in non- issuer transactions under
(or obtain exemptions from the application of) the Blue Sky laws of
each state where necessary to permit market making transactions and
secondary trading if you, based on advice of counsel, advise the
Company that such qualification, registration or exemption is
necessary, and will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for a
period of five years after the date hereof.
q. The Company will timely file with the National
Association of Securities Dealers Automated Quotation National Market
System ("Nasdaq/NMS") all documents and notices required by the
Nasdaq/NMS of companies that have issued securities that are traded in
the over-the-counter market and quotations for which are reported by
the Nasdaq/NMS.
r. The Company will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the
Act.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, that:
a. Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424(a) under the Act,
complied when so filed in all material respects with the provisions of
the Act, except that this representation and warranty does not apply
to statements in or omissions from such Prepricing Prospectus (or any
amendment or supplement thereto) made in reliance upon and in
conformity with information relating
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to any Underwriter furnished to the Company in writing by or on behalf
of any Underwriter through you expressly for use therein. The
Commission has not issued any order preventing or suspending the use
of any Prepricing Prospectus.
b. The Registration Statement, in the form in which it
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and the
Prospectus, and any supplement or amendment thereto when filed with
the Commission under Rule 424(b) under the Act, will comply in all
material respects with the provisions of the Act and will not at any
such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any
amendment or supplement thereto) made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through you
expressly for use therein.
c. The capitalization of the Company is and will be as
set forth in the Prospectus as of the date set forth therein. All the
outstanding shares of Common Stock of the Company have been, and as of
the Closing Date will be, duly authorized and validly issued, are
fully paid and nonassessable and are free of any preemptive or similar
rights; the Shares to be issued and sold to the Underwriters by the
Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; the
capital stock of the Company conforms to the description thereof in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto); and the delivery of certificates for the Shares
pursuant to the terms of this Agreement and payment for the Shares
will pass valid title to the Shares, free and clear of any claim,
encumbrance or defect in title to the several Underwriters purchasing
the Shares in good faith and without notice of any lien, claim or
encumbrance. The certificates for the Shares are in valid and
sufficient form.
d. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Texas
with full power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth,
results of operations or prospects of the Company and the Subsidiaries
(as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
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e. Except for the subsidiaries listed in Exhibit 21 to
the Registration Statement, the Company does not own a material
interest in or control, directly or indirectly, any other corporation,
partnership, joint venture, association, trust or other business
organization. Each of the subsidiaries described on Exhibit 21 to the
Registration Statement (collectively, the "Subsidiaries") is a
corporation duly organized and validly existing under the laws of the
state of its incorporation set forth on such Exhibit 21 with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct
its business and is in good standing in each other jurisdiction or
place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the
failure to so register or qualify does not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each of the
Subsidiaries has been duly authorized and validly issued, are fully
paid and nonassessable, and are owned by the Company directly or
indirectly through one of the other Subsidiaries, free and clear of
any lien, adverse claim, security interest, equity or other
encumbrance, except for the pledge of such shares pursuant to the
NationsBank Facility as described in the Prospectus.
f. There are no legal or governmental proceedings
pending or, to the best knowledge of the Company, threatened, against
the Company or any of the Subsidiaries, or to which the Company or any
of the Subsidiaries, or to which any of their respective properties,
is subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto)
but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the
best knowledge of the Company, threatened, against or involving the
Company or any Subsidiary, which might individually or in the
aggregate prevent or adversely affect the transactions contemplated by
this Agreement or result in a material adverse change in the condition
(financial or otherwise), properties, business, net worth, results of
operations or prospects of the Company or any of its Subsidiaries, nor
is there any basis for any such action, suit, inquiry, proceeding, or
investigation. There are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act. All
such contracts to which the Company or any Subsidiary is a party have
been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or
such Subsidiary and are enforceable against the Company or such
Subsidiary in accordance with the terms thereof, and neither the
Company nor any Subsidiary, nor to the best of the Company's
knowledge, any other party, is in breach of or default under any of
such contracts.
g. Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or bylaws,
or other organizational documents, or
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of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or in
default in any material respect in the performance of any obligation,
agreement or condition contained in (i) any bond, debenture, note or
any other evidence of indebtedness, or (ii) any material agreement,
indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound; and there does not exist any state
of facts which constitutes an event of default on the part of the
Company or any Subsidiary as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of
default.
h. The execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement
have been duly and validly authorized by the Company, and this
Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.
i. Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated
hereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required for the registration of the Shares
under the Act and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement) or conflicts with or will conflict
with or constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the
Subsidiaries or (ii) conflicts or will conflict with or constitutes a
breach of, or a default under, any agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties
may be bound, or violates any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of their respective properties, or results
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to which any
of the property or assets of any of them is subject.
j. Except as described in the Prospectus, the Company
does not have outstanding and at the Closing Date (and the Additional
Closing Date, if applicable) will not have outstanding any options to
purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue
or sell, any shares of Common Stock or any such options, warrants or
convertible securities or obligations. No holder of securities of the
Company has rights to the registration of
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any securities of the Company because of the filing of the
Registration Statement that have not been satisfied or heretofore
waived in writing.
k. Deloitte & Touche LLP, the certified public
accountants who have certified the financial statements filed as part
of the Registration Statement and the Prospectus (and any amendment or
supplement thereto), are independent public accountants as required by
the Act.
l. The financial statements, together with related
schedules and notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and changes
in financial position of the Company and the Subsidiaries on the basis
stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the
other financial and statistical information and data set forth in the
Registration Statement and Prospectus (and any amendment or supplement
thereto) is accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the
Company. No other financial statements or schedules are required to
be included in the Registration Statement.
m. Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to
the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), (i) the Company and its Subsidiaries have not
incurred any material liabilities or obligations, indirect, direct or
contingent, or other transaction which is not in the ordinary course
of business or which could result in a material reduction in the
future earnings of the Company and its Subsidiaries; (ii) the Company
and its Subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered
by insurance; (iii) the Company has not paid or declared any dividends
or other distributions with respect to its capital stock and the
Company and its Subsidiaries are not in default in the payment of
principal or interest on any outstanding debt obligations; (iv) there
has not been any change in the capital stock (other than upon the sale
of the Shares hereunder and upon the exercise of options and warrants
described in the Prospectus) or indebtedness material to the Company
and its Subsidiaries (other than in the ordinary course of business);
and (v) there has not been any material adverse change, or any
development involving or which may reasonably be expected to involve a
potential future material adverse change, in the condition (financial
or otherwise), business, properties, net worth, results of operations
or prospects of the Company and its Subsidiaries.
n. The Company and each of the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free
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and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the financial
statements included in, or elsewhere in, the Prospectus or (ii) such
as are not materially burdensome and do not interfere in any material
respect with the use of the property or the conduct of the business of
the Company and the Subsidiaries taken as a whole. The property (real
and personal) held under lease by each of the Company and the
Subsidiaries is held by it under valid, subsisting and enforceable
leases with only such exceptions as in the aggregate are not
materially burdensome and do not interfere in any material respect
with the conduct of the business of the Company and the Subsidiaries
taken as a whole.
o. The Company has not distributed and will not
distribute any offering material in connection with the offering and
sale of the Shares other than the Prepricing Prospectus, the
Prospectus, or other offering material, if any, as permitted by the
Act and the rules and regulations enacted thereunder (the "Rules and
Regulations").
p. The Company has not taken, directly or indirectly,
any action which is designed, or which might reasonably be expected to
cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
q. The Company is not an "investment company," an
"affiliated person" of, or "promoter" or "principal underwriter" for
an investment company within the meaning of the Investment Company Act
of 1940, as amended.
r. The Company and each of the Subsidiaries have all
permits, licenses, franchises, approvals, consents and authorizations
of governmental or regulatory authorities (hereinafter "permit" or
"permits") as are necessary to own their respective properties and to
conduct their respective businesses in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus, except where the failure to have obtained any such permit
has not and will not have a Material Adverse Effect; the Company and
each of the Subsidiaries have fulfilled and performed all of their
material obligations with respect to each such permit and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination of any such permit or result in any other
material impairment of the rights of the holder of any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of the Subsidiaries.
s. The Company and the Subsidiaries have complied and
will comply in all material respects with wage and hour determinations
issued by the U.S. Department of Labor under the Service Contract Act
of 1965 and the Fair Labor Standards Act in paying its employees'
salaries, fringe benefits, and other compensation for the performance
of work or other duties in connection with contracts with the U.S.
government. The Company and the Subsidiaries have complied and will
comply in all material respects with the terms of all certifications
and representations made to the U.S.
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government in connection with the submission of any bid or proposal or
any contract. The Company and the Subsidiaries have complied and will
comply in all material respects with their obligations under their
agreements and contracts with the U.S. government and agencies
thereof.
t. The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
u. Neither the Company nor any Subsidiary has, directly
or indirectly, at any time during the past five years (i) made any
unlawful contribution to any candidate for political office, or failed
to disclose fully any contribution in violation of law, or (ii) made
any payment to any federal, state or foreign governmental official, or
other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States
or any jurisdiction thereof or applicable foreign jurisdictions.
v. The Company and the Subsidiaries have obtained all
material permits, licenses and other authorizations, if any, which are
required under federal, state, local and foreign statutes, ordinances
and other laws relating to pollution or protection of the environment
("Environmental Laws"). The Company and the Subsidiaries are in
material compliance with all terms and conditions of all required
permits, licenses and authorizations, and are also in material
compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws. There is no pending
or, to the best knowledge of the Company, threatened civil or criminal
litigation, notice of violation, or administrative proceeding relating
in any way to the Environmental Laws involving the Company or the
Subsidiaries. There have not been and there are not any past, present
or foreseeable future events, conditions, circumstances, activities,
practices, incidents, actions or plans relating to the Company or the
Subsidiaries that may interfere with or prevent continued compliance
with, or that may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation under the Environmental
Laws, except where the same does not have a Material Adverse Effect.
w. The Company and the Subsidiaries own and have full
right, title and interest in and to, or have valid licenses to use,
all the patents, trade names, trademarks service marks and copyrights
necessary for the present and currently planned conduct of the
business of the Company or the Subsidiaries, and, except as described
in the
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Prospectus, neither the Company nor any Subsidiary has created any
lien or encumbrance on, or granted any right or license with respect
to, any such patent, trade name, trademark, service xxxx or copyright.
There is no claim pending against the Company or any Subsidiary with
respect to any patent, trade name, trademark, service xxxx or
copyright, and neither the Company nor any Subsidiary has received
notice that any patent, trade name, trademark, service xxxx or
copyright that it uses or has used in the conduct of its business
infringes upon or conflicts with the rights of any third party. To
the best knowledge of the Company, there is no infringement on the
intellectual property rights of the Company or the Subsidiaries by
others, and none of the activities engaged in by the Company or any
Subsidiary infringes or conflicts with the intellectual property
rights of others, in a manner that could adversely affect the
condition (financial or other), business, properties, net worth,
results of operations or prospects of the Company and the
Subsidiaries, taken as a whole.
x. All offers and sales of the Company's and its
Subsidiaries' capital stock prior to the date hereof were made in
compliance with the Act and all other applicable state and federal
laws or regulations.
y. The Shares have been duly authorized for trading on
the Nasdaq/NMS subject to notice of issuance with respect to the
Shares being offered by the Company.
z. All federal, state and local tax returns required to
be filed by or on behalf of the Company or any Subsidiary with respect
to all periods ended prior to the date of this Agreement have been
filed (or are the subject of valid extension) with the appropriate
federal, state and local authorities and all such tax returns, as
filed, are accurate in all material respects. All federal, state and
local taxes (including estimated tax payments) required to be shown on
all such tax returns or claimed to be due from or with respect to the
business of the Company or any Subsidiary have been paid or reflected
as a liability on the financial statements of the Company and the
Subsidiaries for appropriate periods, except for those taxes or claims
therefor which are being contested by the Company in good faith and
for which appropriate reserves are reflected in the Company's
financial statements. All deficiencies asserted as a result of any
federal, state or local tax audits have been paid or finally settled
and no issue has been raised in any such audit which, by application
of the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so audited.
No state of facts exists or has existed which would constitute grounds
for the assessment of any tax liability with respect to the periods
which have not been audited by appropriate federal, state or local
authorities. There are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any federal, state or
local tax return for any period. On the Closing Date, and Additional
Closing Date, if any, all stock transfer and other taxes which are
required to be paid in connection with the sale of the shares to be
sold by the Company to the Underwriters will have been fully paid by
the Company and all laws imposing such taxes will have been complied
with.
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aa. Except as set forth in the Prospectus, there are no
transactions with affiliates, as defined in Rule 405 promulgated under
the Act, which are required by the Act and the applicable rules and
regulations thereunder to be disclosed in the Registration Statement.
ab. The Company has procured the written agreement of the
Selling Shareholder, and each officer and director of the Company who
owns shares of Common Stock or options to acquire shares of Common
Stock of the Company as set forth in the Prospectus not to sell, offer
to sell or contract to sell, or otherwise dispose of or transfer,
directly or indirectly, any shares of Common Stock owned or
controlled, or hereafter acquired, by such persons, or any rights to
purchase any of such shares of Common Stock, for a period of 180 days
after the commencement of the public offering of the Shares by the
Underwriters without the prior written consent of Xxxxxxx Xxxxx &
Associates, Inc.
ac. Neither the Company nor any of its Subsidiaries (i)
conduct business or have affiliates which conduct business in or with
Cuba, (ii) plan to commence doing business in or with Cuba after the
effective date of the Registration Statement or (iii) are required by
Florida law to report a material change in information previously
reported to the State of Florida regarding business conducted in or
with Cuba.
ad. Neither the sale of the Shares nor any action taken
by the Company or the Selling Shareholder in connection therewith
violates any provision of state insurance laws or regulations.
ae. No officer, director, nominee for director or
shareholder of the Company has any direct or indirect affiliation or
association with any member of the National Association of Securities
Dealers, Inc. (the "NASD").
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder hereby represents and warrants to each Underwriter on
the date hereof (except as otherwise set forth herein), and shall be deemed to
represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, that:
a. All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Shareholder of
this Agreement and the Power of Attorney (the "Power of Attorney")
referred to in the last paragraph of this Section 7, and for the sale
and delivery of the Shares to be sold by the Selling Shareholder
hereunder, have been obtained; and the Selling Shareholder has full
right, power and authority to enter into this Agreement and the Power
of Attorney, and to sell, assign, transfer and deliver the Shares to
be sold by the Selling Shareholder hereunder.
b. This Agreement and the Power of Attorney have been
duly authorized, executed and delivered by the Selling Shareholder and
this Agreement and the Power of Attorney constitute the valid and
binding agreements of the Selling Shareholder
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enforceable against the Selling Shareholder in accordance with their
respective terms, except to the extent that the enforceability of the
indemnification and contribution provisions of Section 9 hereof may be
limited by securities laws or by public policy considerations as
expressed in such laws as construed by courts of competent
jurisdiction, and except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting enforcement of creditors' rights
generally or the availability of equitable remedies, regardless of
whether such enforcement is considered in a proceeding in equity or at
law; the performance of this Agreement and the Power of Attorney and
the consummation of the transactions contemplated herein and therein
will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, voting trust agreement, note agreement, lease
or other agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder or its properties are bound,
or under any order, rule or regulation of any court or governmental
agency or body applicable to the Selling Shareholder or the business
or property of the Selling Shareholder.
c. The Selling Shareholder has, and immediately prior to
the Closing Date (and the Additional Closing Date, if any) the Selling
Shareholder will have, good and valid title to the Shares to be sold
by the Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities, shareholder agreements, voting trusts or
claims of any nature whatsoever, and, upon delivery of such Shares and
payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities, shareholder
agreements, voting trusts or claims of any nature whatsoever (other
than those arising by or through the Underwriters), will pass to the
several Underwriters.
d. The Selling Shareholder will not, for a period of 180
days after the commencement of the public offering of the Shares by
the Underwriters, directly or indirectly, sell, offer to sell,
contract to sell or otherwise dispose of or transfer any shares of
Common Stock or rights to purchase shares of Common Stock otherwise
than hereunder or with the prior written consent of Xxxxxxx Xxxxx &
Associates, Inc.
e. The Selling Shareholder has not taken, and will not
take, directly or indirectly, any action designed to or which has
constituted nor which might 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 the Shares or otherwise.
f. No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or
body is required for the consummation by the Selling Shareholder of
the transactions on its part contemplated herein or in the Power of
Attorney, except such as have been obtained under the Act and such as
may be required under state securities or Blue Sky laws or the by-laws
and rules of the NASD in connection with the purchase and distribution
by the Underwriters of the Shares to be sold by the Selling
Shareholder.
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g. The Selling Shareholder is familiar with the
Registration Statement, the Prepricing Prospectus and the Prospectus
and has no knowledge of any fact or condition not set forth in the
Registration Statement, the Prepricing Prospectus or the Prospectus
which has materially adversely affected, or may materially adversely
affect, the condition (financial or otherwise), business, properties,
net worth, results of operations or prospects of the Company, and the
sale of the Shares proposed to be sold by the Selling Shareholder is
not prompted by any such knowledge.
h. All information with respect to the Selling
Shareholder contained in the Registration Statement, the Prepricing
Prospectus and the Prospectus (as amended or supplemented, if the
Company shall have filed with the Commission any amendment or
supplement thereto) complied and will comply in all material respects
with all applicable provisions of the Act, contains and will contain
all statements required to be stated therein in accordance with the
Act, and does not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
i. To the best knowledge of the Selling Shareholder, the
representations and warranties of the Company contained in Section 6
hereof are true and correct.
j. Other than as permitted by the Act and the Rules and
Regulations, the Selling Shareholder has not distributed and will not
distribute any Prepricing Prospectus, the Prospectus or any other
offering material in connection with the offering and sale of the
Shares.
k. On the Closing Date, and on the Additional Closing
Date, if any, all stock transfer and other taxes (other than income
taxes) which are required to be paid in connection with the sale and
transfer of the Shares to be sold by the Selling Shareholder to the
several Underwriters hereunder will have been fully paid for by the
Selling Shareholder and all laws imposing such taxes will have been
fully complied with.
l. Neither the sale of the Shares nor any action taken
by the Selling Shareholder in connection therewith violates any state
insurance laws or regulations.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Shareholder agrees to deliver to you at least two days prior to the Closing a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The Selling Shareholder represents and warrants that it has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to
you, appointing Xxx X. Xxxxxx and Xxxxx X. Xxxxxx, Xx. as the Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of the Selling Shareholder, to
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determine the purchase price to be paid by the Underwriters to the Selling
Shareholder as provided in Section 2 hereof, to authorize the delivery of the
Shares to be sold by the Selling Shareholder hereunder or otherwise to act on
behalf of the Selling Shareholder in connection with the transactions
contemplated by this Agreement. Prior to the date of this Agreement, the
Selling Shareholder has delivered to the Attorneys-in-Fact certificates in
negotiable form representing all the Firm Shares and Additional Shares to be
sold by the Selling Shareholder hereunder, to be held by the Attorneys- in-Fact
until such time as the Attorneys-in-Fact shall deliver such Shares to the
Underwriters in accordance with this Agreement and the Power of Attorney or, if
this Agreement is terminated prior to such delivery, shall return such Shares
to the Selling Shareholder. The Selling Shareholder specifically agrees that
the Shares represented by the certificates held in custody for the Selling
Shareholder under the Power of Attorney are subject to the interest of the
Underwriters hereunder, and that the arrangements made by the Selling
Shareholder for the custody, and the appointment by the Selling Shareholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
The Selling Shareholder specifically agrees that the obligations of the Selling
Shareholder hereunder shall not be terminated by operation of law, whether by
the dissolution or change of control of the Selling Shareholder or by the
occurrence of any other event. If the Selling Shareholder should be dissolved,
or if any other such event should occur before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or on
behalf of the Selling Shareholder in accordance with the terms and conditions
of this Agreement and the Power of Attorney, and actions taken by the
Attorneys-in-Fact pursuant to the Power of Attorney shall be as valid as if
such dissolution or other event had not occurred, regardless of whether or not
the Attorneys-in-Fact, or either of them, shall have received notice of
termination, dissolution or other event.
8. EXPENSES. Whether or not the transactions contemplated hereby
are consummated or this Agreement becomes effective or is terminated, the
Company and the Selling Shareholder, jointly and severally, shall be
responsible for and shall pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and Selling Shareholder's counsel
and accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof and of any Prepricing
Prospectus to the Underwriters and dealers; (ii) the printing and delivery
(including, without limitation, postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement, the
Prospectus, each Prepricing Prospectus, the Blue Sky memoranda, the Power of
Attorney, the Agreement Among Underwriters, this Agreement, the Selected
Dealers Agreement and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) all reasonable expenses in connection with the qualification of
the Shares for offering and sale under state securities laws or Blue Sky laws,
including the reasonable fees of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by the
NASD of the terms of the sale of the Shares and the reasonable fees and
disbursements of the Underwriters' counsel relating thereto; (v) the cost of
preparing stock certificates; (vi) the costs and charges of any transfer agent
or registrar; (vii) the cost of the tax stamps, if any, in connection with the
issuance and
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delivery of the Shares to the respective Underwriters; (viii) all other fees,
costs and expenses referred to in Item 13 of the Registration Statement; and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Shareholder hereunder which are not
otherwise specifically provided for in this Section. Notwithstanding the
foregoing, in the event that the proposed offering is terminated for the
reasons set forth in Section 5(i) hereof, the Company agrees to reimburse the
Underwriters as provided in Section 5(i).
The Company and the Selling Shareholder further agree that, in
addition to the expenses payable by them under this Agreement, they shall pay
to Xxxxxxx Xxxxx & Associates, Inc. and Southwest Securities, Inc., solely by
deduction from the proceeds of the public offering of the Shares contemplated
hereby, a financial advisory fee equal, in the aggregate, to the lesser of (i)
three-fourths of one percent (0.75%) of the total gross proceeds to the Company
and the Selling Shareholder resulting from such offering or (ii) $300,000. For
such purpose, "gross proceeds" means the product obtained by multiplying the
aggregate number of Shares sold by the Company and the Selling Shareholder in
the offering (including any over-allotment shares) by the price at which such
Shares are sold to the public, without deduction or offset of underwriting
discounts or commissions or any fees, costs or expenses. Such financial
advisory fee shall be paid by the Company and the Selling Shareholder in
proportion to the respective number of Shares to be sold by them under this
Agreement, as set forth on Schedule II.
9. INDEMNIFICATION AND CONTRIBUTION. The Company and the Selling
Shareholder jointly and severally agree to indemnify and hold harmless you and
each other Underwriter, the directors, officers, employees and agents of 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 Securities Exchange Act
of 1934, as amended (the "Exchange Act") from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or
in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expense arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith, or arising
out of or based upon any inaccuracy in the representations and warranties of
the Company or the Selling Shareholder contained herein or any failure of the
Company or the Selling Shareholder to perform their respective obligations
hereunder or under law; provided, however, that with respect to any untrue
statement or omission made in any Prepricing Prospectus, the indemnity
agreement contained in this subsection shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such losses, claims, damages or liabilities
purchased the shares of Stock concerned if both (A) a copy of the Prospectus
was not sent or given to such person at or prior to the written confirmation of
the sale of such shares of Stock to such person as required by the Act, and (B)
the untrue statement or omission in the
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Prepricing Prospectus was corrected in the Prospectus. Notwithstanding
anything in this Section 9, in no event shall the Selling Shareholder's
obligation under the preceding sentence exceed the total net proceeds from the
offering received by the Selling Shareholder (it being agreed that the Company
shall bear the balance.)
In addition to their other obligations under this Section 9, the
Company and the Selling Shareholder jointly and severally agree that, as an
interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, any inaccuracy in the representations and warranties of the Company
or the Selling Shareholder herein or failure to perform its obligations
hereunder, all as described in this Section 9, it will reimburse each
Underwriter on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
or the Selling Shareholder's obligation to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the Company or the Selling Shareholder,
as the case may be, together with interest, compounded daily determined on the
basis of the base lending rate announced from time to time by Chase Manhattan
Bank, N.A. (the "Prime Rate"). Any such interim reimbursement payments which
are not made to the Underwriters within 30 days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company or the Selling Shareholder, such Underwriter or such
controlling person shall promptly notify in writing the party(s) against whom
indemnification is being sought (the "indemnifying party" or "indemnifying
parties"), and such indemnifying party(s) shall assume the defense thereof,
including the employment of counsel reasonably acceptable to such Underwriter
or such controlling person and payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel (but the Company and the Selling Shareholder shall not be
liable for the fees and expenses of more than one counsel) in any such action
and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the indemnifying party(s) has (have) agreed in writing to pay such
fees and expenses, (ii) the indemnifying party(s) has (have) failed to assume
the defense and employ counsel reasonably acceptable to the Underwriter or such
controlling person or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the indemnifying party(s) and such Underwriter or such controlling person shall
have been advised by its counsel that one or more legal defenses may be
available to the Underwriter which may not be available to the Company, or that
representation of such indemnified party and any indemnifying party(s) by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the
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indemnifying party(s) shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person
(notwithstanding its (their) obligation to bear the fees and expenses of such
counsel)). The indemnifying party(s) shall not be liable for any settlement of
any such action effected without its (their) written consent, but if settled
with such written consent, or if there be a final judgment for the plaintiff in
any such action, the indemnifying party(s) agree(s) to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent stated in the
immediately preceding paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and the
Selling Shareholder, to the same extent as the foregoing indemnity from the
Company and the Selling Shareholder to each Underwriter, but only with respect
to information furnished in writing by or on behalf of such Underwriter through
you expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto. If any action
or claim shall be brought or asserted against the Company, any of its
directors, any such officers, or any such controlling person or the Selling
Shareholder based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph, such Underwriter shall have the rights and duties given to the
Company and the Selling Shareholder by the preceding paragraph (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officers,
and any such controlling persons and the Selling Shareholder shall have the
rights and duties given to the Underwriters by the immediately preceding
paragraph.
If the indemnification provided for in this Section 9 is unavailable
or insufficient for any reason whatsoever to an indemnified party under the
first or fourth paragraph hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Selling Shareholder on the one hand
and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholder on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before
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deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus;
provided that, in the event that the Underwriters shall have purchased any
Additional Shares hereunder, any determination of the relative benefits
received by the Company and the Selling Shareholder or the Underwriters from
the offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Selling Shareholder, and the underwriting discounts
and commissions received by the Underwriters, from the sale of such Additional
Shares, in each case computed on the basis of the respective amounts set forth
in the notes to the table on the cover page of the Prospectus. The relative
fault of the Company and the Selling Shareholder on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Shareholder on the one hand
or by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by a pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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. The Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 11 hereof) and not joint.
Notwithstanding the second and fifth paragraphs of this Section 9, any
losses, claims, damages, liabilities or expenses for which an indemnified party
is entitled to indemnification or contribution under this Section 9 shall be
paid by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. The indemnity, contribution and
reimbursement agreements contained in Section 9 and the representations and
warranties of the Company and the Selling Shareholder, respectively, set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company or the Selling Shareholder,
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(ii) acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company or the Selling Shareholder, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second and fifth paragraphs
of this Section 9, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of the
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code
of Arbitration Procedure of the NASD. Any such arbitration must be commenced
by service of a written demand for arbitration or written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the
party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in the second and
fifth paragraphs of this Section 9, and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of the second and fifth paragraphs of this Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
a. The Registration Statement shall have become
effective not later than 12:00 noon, New York City time, on the date
hereof, or at such later date and time as shall be consented to in
writing by you, and all filings required by Rules 424(b) and 430A
under the Act shall have been timely made.
b. You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock (other than pursuant to the exercise of outstanding
options disclosed in the Prospectus or granted under the stock option
plans described in the Prospectus) of the Company or any of its
Subsidiaries or any material change in the indebtedness (other than in
the ordinary course of business) of the Company or any of its
Subsidiaries, (ii) except as set forth or contemplated by the
Registration Statement or the Prospectus, no material verbal or
written agreement or other transaction shall have been entered into by
the Company or any of its Subsidiaries, which is not in the ordinary
course of business or which could reasonably be expected to result in
a material reduction in the future earnings of the Company and its
Subsidiaries, (iii) no loss or damage (whether or not insured) to the
property of the Company or any of its Subsidiaries shall have been
sustained which materially and adversely affects the condition
(financial or other), business, properties, net worth, results of
operations or prospects of the Company and its Subsidiaries, (iv) no
legal or governmental action, suit or proceeding affecting the Company
or any of its Subsidiaries which is material to the Company and its
Subsidiaries
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or which affects or could reasonably be expected to affect the
transactions contemplated by this Agreement shall have been instituted
or threatened, and (v) there shall not have been any material change
in the condition (financial or other), business, management,
properties, net worth, results or operations or prospects of the
Company and its Subsidiaries which makes it impractical or inadvisable
in your judgment to proceed with the public offering or purchase the
Shares as contemplated hereby.
c. You shall have received an opinion, which opinion
shall be interpreted in accordance with the Legal Opinion Accord (the
"Accord") of the American Bar Association Section of Business Law
(1991), of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Company and the Selling Shareholder, dated the Closing Date (and the
Additional Closing Date, if any), in form and substance reasonably
satisfactory to you and your counsel, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation under the laws of the State
of Texas, with full corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Prospectus;
(ii) all of the outstanding shares of Common Stock
prior to the issuance of the Shares have been duly and validly
authorized and issued, are fully paid and nonassessable and
free of preemptive rights under the Company's Restated
Articles of Incorporation, or to the Knowledge of such counsel
(as used herein, the term "Knowledge" shall mean the Actual
Knowledge of the Primary Lawyer Group, as those terms are
defined in the Accord) similar rights that entitle or will
entitle any person to acquire any shares upon the issuance
thereof by the Company; the Shares to be issued and sold to
the Underwriters by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free
of any preemptive rights under the Company's Restated Articles
of Incorporation, or to the Knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company; and the
authorized capital stock of Company conforms in all material
respects to the description thereof under the Caption
"Description of Capital Stock" in the Prospectus;
(iii) the Company has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business,
so as to require such qualification, except for those failures
to be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect;
(iv) (a) the Registration Statement has become
effective under the Act and, to the Knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
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have been instituted or are pending or contemplated under the
Act; (b) the Registration Statement and the Prospectus and
each amendment or supplement thereto (except for the financial
statements, schedules, and other financial and statistical
data included therein, as to which such counsel need express
no opinion) comply as to form in all material respects with
the requirements of the Act; (c) such counsel has no Knowledge
of any contracts or documents required to be filed as exhibits
to the Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed or
described as required, and (d) to the Knowledge of such
counsel, the descriptions in the Prospectus of statutes, legal
and governmental proceedings, and contracts and other
documents present in all material respects the information
required to be shown;
(v) this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding agreement of the Company enforceable in accordance
with its terms, except to the extent that the enforceability
of the indemnification and contribution provisions of Section
9 hereof may be limited by securities laws or by public policy
considerations as expressed in such laws as construed by
courts of competent jurisdiction and except as enforceability
may be limited by bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting
enforcement of creditors' rights generally or the availability
of equitable remedies, regardless of whether such enforcement
is considered in a proceeding in equity or at law, and neither
the performance of this Agreement nor consummation of the
transactions contemplated herein (a) will result in any breach
or violation of any of the terms or provisions of, or
constitute a default under, (i) any contract, indenture,
mortgage, deed of trust, voting trust or similar agreement,
note agreement, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the
Company or the Subsidiary or their respective properties are
bound and that is either (x) filed by the Company with the
Commission as an exhibit to the Registration Statement or (y)
material to the Company and its Subsidiaries, taken as a
whole, and known to such counsel (collectively, "Material
Agreements"), (ii) the Restated Articles of Incorporation or
bylaws of the Company or (iii) any Law (but excluding Local
Law) applicable to the Company or any Subsidiary or their
respective businesses or properties, the violation of which
would have a Material Adverse Effect, and (b) will not result
in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the terms of any Material Agreement;
and, to the Knowledge of such counsel, no consent, approval,
authorization, registration, filing or order of any federal or
Texas State authority has been or is required for the
performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby, except
such as have been obtained under the Act, provided that such
opinion need not extend to consents, approvals, authorizations
or orders required under state or foreign
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securities or Blue Sky laws or under NASD rules in connection
with the purchase and distribution of the Shares by the
Underwriters;
(vi) to the Knowledge of such counsel, there is not
pending or threatened any action, suit or proceeding before or
by any court or governmental agency or body, to which the
Company or any Subsidiary is a party, or to which any property
of the Company or any Subsidiary is subject, which (a) is not
referred to in the Prospectus and would reasonably be expected
to result in a Material Adverse Effect or (b) is required to
be described in the Prospectus and is not so described;
(vii) the form of certificates for the Shares
conforms in all material respects with the requirements of the
Texas Business Corporation Act;
(viii) to the Knowledge of such counsel, (A) the
Company has such permits, licenses, franchises, authorizations
and approvals (collectively, "permits") of federal or Texas
State governmental agencies or bodies as are necessary to own
or lease its properties and to conduct its business in the
manner described in the Prospectus, except where the failure
to have obtained any such permit would not have a Material
Adverse Effect, subject in each case to such qualifications as
may be set forth in the Prospectus and (B) the permits contain
no restrictions required to be disclosed in the Prospectus
that are not disclosed therein;
(ix) to the Knowledge of such counsel, neither the
Company nor any of its Subsidiaries is in violation of any Law
(but excluding Local Law) applicable to the Company or any of
the Subsidiaries or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of
the Subsidiaries except where such violation would not
reasonably be expected to have a Material Adverse Effect;
(x) neither the Company nor any Subsidiary is an
"investment company" or an "affiliated person" of or a
company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940;
(xi) this Agreement and the Power of Attorney have
been duly authorized, executed and delivered by or on behalf
of the Selling Shareholder and constitute a binding agreement
of the Company enforceable in accordance with its terms,
except to the extent that the enforceability of the
indemnification and contribution provisions of Section 9
hereof may be limited by securities laws or by public policy
considerations as expressed in such laws as construed by
courts of competent jurisdiction and except as enforceability
may be limited by bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting
enforcement of creditors' rights generally or the availability
of equitable remedies, regardless of whether such enforcement
is
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considered in a proceeding in equity or at law; and to the
Knowledge of such counsel the performance of this Agreement
and the Power of Attorney and the consummation of the
transactions herein and therein contemplated will not result
in a breach or violation of any of the terms or provisions of,
or constitute a default under, any statute, indenture,
mortgage, deed of trust, voting trust agreement, note
agreement, lease or other agreement or instrument to which the
Selling Shareholder is a party or by which the Selling
Shareholder or its properties are bound, or any Law (but
excluding any Local Law) applicable to the Selling Shareholder
or the business or property of the Selling Shareholder;
(xii) to the knowledge of such counsel, no consent,
approval, authorization or order of any federal or Texas State
authority has been or is required for the performance of this
Agreement and the Power of Attorney by the Selling Shareholder
or the consummation of the transactions contemplated by this
Agreement and the Power of Attorney in connection with the
Shares to be sold by the Selling Shareholder hereunder, except
consents, approvals, authorizations or orders that have been
duly obtained and are in full force and effect, such as have
been obtained under the Act and such as may be required under
state securities or Blue Sky laws or NASD rules and
regulations in connection with the purchase and distribution
of such Shares by the Underwriters;
(xiii) to the knowledge of such counsel, immediately
prior to the Closing Date (and immediately prior to the
Additional Closing Date, if applicable), the Selling
Shareholder has good and valid title to the Shares to be sold
by the Selling Shareholder under this Agreement, free and
clear of all pledges, liens, security interests, charges,
claims, equities or encumbrances of any kind, and full right,
power and authority to sell, assign, transfer and deliver the
Shares to be sold by the Selling Shareholder hereunder; and
(xiv) by delivery of a certificate or certificates
therefor such Selling Shareholder will transfer to the
Underwriters who have purchased such Shares pursuant to this
Agreement in good faith and without notice of any such pledge,
lien, security interest, charge, claim, equity or encumbrance
of any kind or any other adverse claim within the meaning of
the Texas Uniform Commercial Code good and valid title to such
Shares, free and clear of any pledges, liens, security
interests, charges, claims, equities, encumbrances or other
adverse claims (other than those arising by or through the
Underwriters).
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, counsel for the Underwriters, representatives of the independent
public accountants for the Company, and the Underwriters, at which the contents
of the Registration Statement and Prospectus and related matters were discussed
and, although such counsel 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 Prospectus, on the basis of the
foregoing (relying as to materiality upon the statements of
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officers and other representatives of the Company), no facts have come to such
counsel's attention which lead such counsel to believe (i) that the
Registration Statement or any amendment or supplement thereto (other than the
financial statements, schedules and reports thereon, and other financial and
statistical data included therein, as to which such counsel need not comment),
as of its effective date, contained an 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 (ii) that the Prospectus or any
amendment or supplement thereto (other than financial statements, schedules and
reports thereon, and other financial and statistical data included therein, as
to which such counsel need not comment), as of its issue date and as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such counsel may state that its belief
expressed in such statement is based upon the procedures set forth therein.
In rendering their opinion as aforesaid, counsel need only opine as to
the laws of the State of Texas and federal laws, and counsel may (1) rely as to
matters of fact on certificates of responsible officers and other
representatives of the Company, certificates of public officials, and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that in each such case, such counsel
shall state that it has no knowledge contrary to the information contained in
such certificates or statements and knows of no reason why you should not
reasonably rely upon the information contained in such certificates or
statements and copies of any such certificates or statements shall be delivered
to Underwriters' counsel; and (2) make such other assumptions, qualifications,
exceptions and limitations applicable to such opinions as shall be contemplated
by the Accord or otherwise reasonably acceptable to Underwriters' counsel.
In rendering such opinion, such counsel may rely upon a certificate of
the Selling Shareholder as to matters of fact (i) with respect to ownership of
and liens, encumbrances, equities or claims on the Shares sold by the Selling
Shareholder, and (ii) with respect to any agreements, mortgages, deeds of
trust, voting trusts, notes, leases or other instruments, provided that such
counsel shall state that it has no knowledge contrary to the information
contained in such certificate and knows of no reason why you should not
reasonably rely upon the information contained in such certificate and a copy
of any such certificate shall be delivered to Underwriters' counsel.
d. You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxxx & Xxxxxx, a
Professional Corporation, as counsel for the Underwriters, dated the Closing
Date with respect to the issuance and sale of the Firm Shares, the Registration
Statement and other related matters as you may reasonably request, and the
Company and its counsel shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
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e. You shall have received letters addressed to you and dated the
date hereof and the Closing Date from Deloitte & Touche LLP, independent
certified public accountants, substantially in the forms heretofore approved by
you.
f. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, shall be threatened or
contemplated by the Commission at or prior to the Closing Date; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or contemplated by the
Commission or the authorities of any jurisdiction; (iii) any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities; (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to you and you did not object
thereto in good faith; and (v) all of the representations and warranties of the
Company contained in this Agreement shall be true and correct in all respects
on and as of the date hereof and on and as of the Closing Date as if made on
and as of the Closing Date, and you shall have received a certificate, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you) to the effect set forth in this Section 10(f) and in Sections 10(b) and
10(g) hereof.
g. The Company shall not have failed in any respect at or prior
to the Closing Date to have performed or complied with any of its agreements
herein contained and required to be performed or complied with by it hereunder
at or prior the Closing Date.
h. You shall have received a certificate, dated on and as of the
Closing Date, by or on behalf of the Selling Shareholder to the effect that as
of the Closing Date the Selling Shareholder's representations and warranties in
this Agreement are true and correct as if made on and as of such Closing Date,
and that the Selling Shareholder has performed all its obligations and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.
i. The Company and the Selling Shareholder shall have furnished
or caused to have been furnished to you such further certificates and documents
as you shall have reasonably requested.
j. At or prior to the Closing Date, you shall have received the
written commitment of each of the Company's officers and directors and certain
of their affiliates and the Selling Shareholder not to sell, offer to sell,
contract to sell, or otherwise dispose of or transfer any shares of Common
Stock or rights to purchase any shares of Common Stock, directly or indirectly,
except to the Underwriters pursuant to this Agreement, for a period of 180 days
after commencement of the public offering of the Shares by the Underwriters
without the prior written consent of Xxxxxxx Xxxxx & Associates, Inc.
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All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 10, except that, if
the Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (i) shall be dated
as of the Additional Closing Date and the opinion called for by paragraph (c)
shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 10
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the
parties hereto, and (b) release of notification of the effectiveness of the
Registration Statement by the Commission; provided, however, that the
provisions of Sections 8 and 9 shall at all times be effective.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares which such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares
and arrangements satisfactory to you, the Company and the Selling Shareholder
for the purchase of such Firm Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholder. In any
such case which does not result in termination of this Agreement, either you or
the Company and the Selling Shareholder shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or the
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Selling Shareholder by notice to the Company and the Selling Shareholder, if
prior to the Closing Date or the Additional Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be, in
your sole judgment, (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq/NMS, (ii) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or Nasdaq/NMS
shall have been suspended or materially limited, or minimum or maximum prices
shall have been generally established on such exchange or market, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any such
exchange or market or by order of the Commission or any court or other
governmental authority, (iii) a general moratorium on commercial banking
activities shall have been declared by either federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make it,
in your judgment, impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares. Notice of such cancellation
shall be promptly given to the Company and its counsel by telegraph, telecopy
or telephone and shall be subsequently confirmed by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The Company
acknowledges that the statements set forth in footnote (4) on the cover page of
the Prospectus and in the third paragraph under the caption "Underwriting" in
any Prepricing Prospectus and in the Prospectus, constitute the only
information furnished by or on behalf of the Underwriters through you or on
your behalf as such information is referred to in Sections 6(a), 6(b) and 9
hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5 and
12 hereof, notice given pursuant to any of the provisions of this Agreement
shall be in writing and shall be delivered (i) if to the Company or the Selling
Shareholder, to the office of the Company at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxx 00000-0000, Attention: F. Xxxxxx Xxxxxx, III (with a copy to Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000-0000, Attention: Xxxxx X. Xxxxxx, P.C.), or (ii) if to you, as
Representatives of the Underwriters, to Xxxxxxx Xxxxx & Associates, Inc., 000
Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx
(with copy to Xxxxxxxx & Xxxxxx, a Professional Corporation, 0000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000-0000, Attention: Xxxx X. Xxxxxx).
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof, the Selling Shareholder
and its respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither of the terms "successor" and "successors and assigns" as
used in this Agreement shall include a purchaser from you of any of the Shares
in his status as such purchaser.
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This Agreement constitutes the entire agreement, and supersedes all
other prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Subject to Section 11, this Agreement shall be effective when, but
only when, at least one counterpart hereof shall have been executed on behalf
of each party hereto.
The Company, the Selling Shareholder and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several Underwriters.
Very truly yours,
INSPIRE INSURANCE SOLUTIONS, INC.
By:
----------------------------------------
Name: F. Xxxxxx Xxxxxx, III
Title: President and
Chief Executive Officer
Selling Shareholder:
THE MILLERS MUTUAL FIRE INSURANCE COMPANY
By:
----------------------------------------
Name: Xxx X. Xxxxxx
Title: Attorney-in-Fact,
as Attorney-in-Fact acting on behalf of the
Selling Shareholder named in Schedule II to this
Agreement.
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CONFIRMED as of the date first above mentioned,
on behalf of itself and the other several
Underwriters named in Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
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SCHEDULE I
Number
of Firm
Name Shares
---- --------
Xxxxxxx Xxxxx & Associates, Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
Southwest Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
=========
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SCHEDULE II
Shares Firm Shares Additional Shares Total
------ ----------- ----------------- -----
Company 2,775,000 416,250 3,191,250
-------
Selling Shareholder
-------------------
The Millers Mutual
Fire Insurance
Company 2,225,000 333,750 2,558,750
--------- ------- ---------
TOTAL: 5,000,000 750,000 5,750,000
========= ======= =========
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