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EXHIBIT 1.1
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EQUITY CORPORATION INTERNATIONAL
(A DELAWARE CORPORATION)
7,994,522 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
Dated: January ___, 1997
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EQUITY CORPORATION INTERNATIONAL
(A DELAWARE CORPORATION)
7,994,522 SHARES OF COMMON STOCK
(PAR VALUE $.01 PER SHARE)
PURCHASE AGREEMENT
January ___, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
ABN AMRO CHICAGO CORPORATION
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Equity Corporation International, a Delaware corporation (the
"Company"), and Service Corporation International, a Texas corporation (the
"Selling Stockholder"), confirm their respective agreements with Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom Xxxxxxx Xxxxx, ABN AMRO Chicago
Corporation, X.X. Xxxxxx Securities Inc. and Xxxxxxx Xxxxx & Associates, Inc.
are acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Selling Stockholder and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock"), together with the Preferred Share Purchase Rights (the "Rights")
associated with such shares, set forth in Schedules A and B hereto and (ii) the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
1,199,178 additional shares of Common Stock, together with the Rights
associated with such shares, from the Company to cover over-allotments, if any.
The aforesaid 7,994,522 shares of Common Stock and associated Rights (the
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"Initial Securities") to be purchased by the Underwriters and all or any part
of the shares of Common Stock and associated Rights subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities."
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Commission File No.
333-17873) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), and such registration statement has
become effective. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of
Rule 434 and Rule 424(b). The information included in such prospectus or in
such Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto, the
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed by the Company pursuant to Rule 462(b) of the 1933 Act
Regulations to register a portion of the Securities is herein referred to as
the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus, including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities
is herein called the "Prospectus." If Rule 434 is relied on, the term
"Prospectus" shall refer to the preliminary prospectus dated January ____,
1997, together with the Term Sheet, and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include, if applicable, the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX").
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All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any documents under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which are incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The
Company represents and warrants to each Underwriter as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
The Registration Statement (including, if applicable, any Rule 462(b)
Registration Statement) has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
(including, if applicable, any Rule 462(b) Registration Statement) has
been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement
(including, if applicable, any Rule 462(b) Registration Statement) and
any post-effective amendments thereto became effective and at the
Closing Time (and, if any Option Securities are purchased, at each Date
of Delivery), the Registration Statement (including, if applicable, any
Rule 462(b) Registration Statement) and any post-effective amendments
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did 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 to
make the statements therein not misleading. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus or
any such amendment or supplement was issued and at the Closing Time
(and, if any Option Securities are purchased, at each Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
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Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration Statement at
the time it became effective. The representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus or any amendment or supplement
thereto made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement or Prospectus or
any amendment or supplement thereto.
Each preliminary prospectus and the prospectus filed
as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
Regulations. If applicable, each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents or portions
of documents incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectus, when they became
effective or at the time they were or hereafter are filed with the
Commission, as the case may be, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations or the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), as applicable, and,
when read together with the other information in the Prospectus, at the
date of the Prospectus and at the Closing Time (and, if any Option
Securities are purchased, at each Date of Delivery), will not 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, in the light of the circumstances under which they were made,
not misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included in
the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
included or incorporated by reference in the Registration Statement and
the Prospectus, together with the related schedules and notes, present
fairly (A) the financial position of each of the Company and its
consolidated subsidiaries and of MLI/The Xxxxxx Corporation ("MLI") and
its consolidated subsidiaries and the combined financial position of
Xxxx Funeral Home, Inc., Xxxx-Xxxxxxxx Funeral Home, Inc.,
Xxxxxx-Xxxxxxxx-Xxxx, Inc., Xxxx Xxxxx-Service Mortuary and Xxxxxxxxx
Xxxxx-Service Funeral Home, Inc. (the "Acquired Companies") at the
dates indicated, (B) the statement of operations, stockholders' equity
and cash flows of the
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Company and its consolidated subsidiaries, MLI and its consolidated
subsidiaries and the Acquired Companies for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The summary
financial data and the selected financial data included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma
financial statements of the Company and the related notes thereto
included in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each of the Company's
subsidiaries listed on Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (each a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the
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jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, except for 100 shares of common stock, par value $.01 per share,
of ECI Services of Ohio, Inc., a Delaware corporation, which are owned
by an Ohio licensed funeral director as required by Ohio funeral home
ownership regulations and except as otherwise disclosed in the
Registration Statement, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (a) the
subsidiaries listed on Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 and (b) certain other
subsidiaries of the Company which, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement or as permitted under the
terms of this Agreement). The shares of issued and outstanding capital
stock of the Company, including the Securities to be purchased by the
Underwriters from the Selling Stockholder, have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company, including the
Securities to be purchased by the Underwriters from the Selling
Stockholder, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company arising by operation of
law, under the charter or bylaws of the Company or under any agreement
to which the Company or any of its subsidiaries is a party or by which
it is bound. Except as described in or incorporated by reference as
part of the Prospectus, the Company does 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 Common Stock or other securities of
the Company or any such warrants, convertible securities or
obligations.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
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(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained
or incorporated by reference in the Prospectus; after full payment for
these Securities, no holder of the Securities will be subject to
personal liability for any debts, liabilities or obligations of the
Company by reason of being such a holder; and the issuance of the
Securities by the Company is not subject to preemptive or other similar
rights of any securityholder of the Company arising by operation of
law, under the charter or bylaws of the Company or under any agreement
to which the Company or any of its subsidiaries is a party or by which
it is bound.
(xi) Authorization and Issuance of Rights. The Rights
associated with the shares of Common Stock to be purchased by the
Underwriters from the Company have been duly authorized and, when the
shares of Common Stock with which such Rights are associated are sold
and delivered in accordance with this Agreement, will be validly issued
in accordance with the terms of the Rights Agreement, dated as of
October 13, 1994, as amended as of the date hereof, between the Company
and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agreement"), and will conform in all material respects to the
description thereof in the Company's registration statement on Form 8-A
(File No. 0-24728), as amended, which is incorporated by reference as
part of the Prospectus. The Rights associated with the shares of
Common Stock to be purchased by the Underwriters from the Selling
Stockholder have been duly authorized and validly issued in accordance
with the terms of the Rights Agreement and conform in all material
respects to the description thereof contained in the Prospectus.
(xii) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
bylaws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein (including
the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus under
the caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or
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Repayment Event (as defined below) under, or 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 Agreements and
Instruments, nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any subsidiary or
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, might reasonably be expected to
result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of this Agreement
or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto by the 1933 Act, the 1933
Act Regulations, the 1934 Act or the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") which have
not been so described and filed as required.
(xvi) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks,
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service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would reasonably be
expected to render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, or in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except for such Governmental Licenses which the failure by the Company
to possess would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not, singly or in the aggregate, have
a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries
have good and indefeasible title to all real property owned by the
Company and the subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind, except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company or any of the subsidiaries;
and all of
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the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the
Company or any subsidiary holds properties described in the Prospectus,
are in full force and effect, and neither the Company nor any
subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease which might reasonably be expected to
materially interfere with the use of such leased or subleased property.
(xx) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except for such violations as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance or code or any judicial or administrative interpretation
thereof, or any judicial or administrative order, consent, decree or
judgment which names the Company or any of its subsidiaries as a party
or as being subject thereto, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
except where the failure to have such permits, authorizations and
approvals or to comply with their requirements would not, singly or in
the aggregate, have a Material Adverse Effect, (C) there are no pending
or, to the Company's knowledge, threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries which, singly or in the aggregate, might reasonably be
expected to result in a Material Adverse Effect and (D) to the
Company's knowledge, there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
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its subsidiaries relating to any Hazardous Materials or the violation
of any Environmental Laws which, singly or in the aggregate, might
reasonably be expected to result in a Material Adverse Effect. Based
on its prior experience with respect to compliance with Environmental
Laws as they apply to the business conducted by the Company and its
subsidiaries and the properties owned or leased by them, the Company
has reasonably concluded that the costs and liabilities associated with
compliance with Environmental Laws are not likely to have a Material
Adverse Effect.
(xxii) Taxes. Each of the Company and the Subsidiaries has
filed all federal, state and local income, franchise and other tax
returns which have been required to be filed and has paid all taxes
shown as due thereon. All such returns, as amended if applicable, are
complete, accurate and correct in all material respects. Neither the
Company nor any of the Subsidiaries has any knowledge of any tax
deficiency which might be asserted against it which would have a
Material Adverse Effect. The provisions and reserves on the books of
the Company in respect of federal, state, local and other taxes for any
taxable period as to which the Company's liability for taxes has not
been finally determined are, in the opinion of the Company, adequate.
(xxiii) Insurance Coverage. The Company and each Subsidiary
maintains insurance, which is in full force and effect, of the types
and in the amounts customary in the funeral home and cemetery business.
Neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from insurers
at a cost that would not have a Material Adverse Effect.
(xxiv) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(b) Representations and Warranties by the Selling
Stockholder. The Selling Stockholder represents and warrants to each
Underwriter as of the date hereof, and as of the Closing Time, and agrees with
each Underwriter, as follows:
(i) Accurate Disclosure. To the knowledge of the Selling
Stockholder, none of the representations and warranties of the Company
contained in Section 1(a) hereof are untrue or incorrect (in the case
of representations and warranties that are qualified as to materiality)
or are untrue or incorrect in any material respect (in the case of
representations and warranties that are not so qualified); authorized
representatives of the Selling Stockholder have reviewed and are
familiar with the Registration Statement and the Prospectus, and, to
the knowledge of the Selling Stockholder, the Prospectus does not
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contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement or Prospectus; the Selling Stockholder is not prompted to
sell the Securities to be sold by the Selling Stockholder hereunder by
any information concerning the Company or any subsidiary of the Company
which is not set forth in the Prospectus.
(ii) Authorization of Agreements. The Selling Stockholder
has the full right, power and authority to enter into this Agreement
and to sell, transfer and deliver the Securities to be sold by the
Selling Stockholder hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Securities to be sold by the
Selling Stockholder and the consummation of the transactions
contemplated herein and compliance by the Selling Stockholder with its
obligations hereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by the Selling Stockholder or any property or assets of the
Selling Stockholder pursuant to, any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder may be bound, or to which any of the
property or assets of the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of any applicable
treaty, law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Stockholder or any of its
properties.
(iii) Good and Valid Title. Investment Capital Corporation,
a Texas corporation and an indirect wholly-owned subsidiary of the
Selling Stockholder, has and will at the Closing Time have good and
valid title to the Securities to be sold by the Selling Stockholder
hereunder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement; and upon delivery of such Securities and
payment of the purchase price therefor as herein contemplated, each of
the Underwriters will receive good and valid title to the Securities
purchased by it from the Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind (other than any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance that may be imposed
by or may arise through or under the Underwriters).
(iv) Absence of Manipulation. The Selling Stockholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or
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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 Securities.
(v) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by the Selling
Stockholder of its obligations hereunder or in connection with the sale
and delivery of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as may have
previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(vi) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus, the Selling Stockholder will
not, without the prior written consent of Xxxxxxx Xxxxx, (i) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
cause any registration statement to be filed under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall
not apply to the Securities to be sold hereunder.
(vii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by the Selling Stockholder pursuant to
this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, will be delivered to the Underwriters
at Closing Time pursuant to this Agreement.
(viii) No Association with NASD. Neither the Selling
Stockholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any
officer of the Company or any subsidiary delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by the Selling Stockholder as such and delivered to the
Representatives
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or to counsel for the Underwriters pursuant to the terms of this Agreement
shall be deemed a representation and warranty by the Selling Stockholder to the
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, (i) the Selling Stockholder agrees to sell to the
Underwriters, severally and not jointly, the number of Initial Securities set
forth in Schedule B opposite the name of the Selling Stockholder at the price
per share set forth in Schedule C, and (ii) each Underwriter, severally and not
jointly, agrees to purchase from the Selling Stockholder, at the price per
share set forth in Schedule C, that proportion of the number of Initial
Securities set forth in Schedule B opposite the name of the Selling Stockholder
which the number of Initial Securities set forth in Schedule A opposite the
name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters
as the Representatives in their sole discretion shall make to eliminate any
sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriters,
severally and not jointly, an option to purchase up to an additional 1,199,178
shares of Common Stock at the price per share set forth in Schedule C. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be less than two nor more than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined (unless the Representatives and the Company otherwise
agree). If the option is exercised as to all or any portion of the Option
Securities, (i) the Company will sell to the Underwriters, severally and not
jointly, the number of Option Securities as to which the option is exercised
and (ii) each of the Underwriters, acting severally and not jointly, will
purchase that proportion of such Option Securities which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and
delivery of certificates for, the Initial Securities shall be made at the
office of Xxxxxx & Xxxxxx L.L.P., 2300 First City Tower,
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1001 Fannin, Xxxxxxx, Xxxxx 00000, or at such other place as shall be agreed
upon by the Representatives, the Company and the Selling Stockholder, at 10:00
A.M. (Eastern Time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern Time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives, the Company and the Selling Stockholder (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price
for, and delivery of certificates for, such Option Securities shall be made at
the above-mentioned offices, or at such other place as shall be agreed upon by
the Representatives and the Company, on the Date of Delivery as specified in
the notice from the Representatives to the Company.
Payment shall be made to the Company and the Selling Stockholder
in immediately available funds, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to
be purchased by them. It is understood that each Underwriter has authorized
the Representatives, for its account, to accept delivery of, receipt for, and
make payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose
payment has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the Representatives may request
in writing at least two full business days before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the
Initial Securities and the Option Securities, if any, will be made available
for examination and packaging by the Representatives in The City of New York
not later than 10:00 A.M. (Eastern Time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any
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comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) (including, if
applicable, any filings necessary pursuant to Rule 424(b) in accordance
with the provisions of Rule 434) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives shall reasonably
object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be
delivered under the 1933 Act
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or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. If
applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus. If at any time when a prospectus
is required by the 1933 Act to be delivered in connection with sales of
the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the judgment of the Representatives
or the Company based on the advice of their respective counsel, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue statements of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading at the time it is delivered to a
purchaser, or if it shall be necessary, in the judgment of the
Representations or the Company based on the advice of their respective
counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
reasonable efforts, in cooperation with the Underwriters, to qualify
the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions within the United States as
the Representatives may designate; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
a period of not less than one year from the effective date of the
Registration Statement (including, if applicable, any Rule 462(b)
Registration Statement).
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act and take such other actions as are necessary
in order to make generally available to its
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security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds, if any, received by it from the sale of the Option Securities
in the manner specified in the Prospectus under "Use of Proceeds."
(i) Nasdaq Quotation. The Company will use its reasonable
efforts to effect the quotation of the Securities on the Nasdaq
National Market and to maintain the quotation of the Securities on the
Nasdaq National Market or, in lieu of maintaining the quotation of the
Securities on the Nasdaq National Market, to list the Securities on a
national securities exchange. The Company will file with the Nasdaq
National Market (or any national securities exchange on which the
Securities are listed) all documents and notices required by the Nasdaq
National Market (or any such national securities exchange) of companies
that have securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq National Market (or
that have securities listed on such national securities exchange).
(j) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus (the "Lock-Up Period"), the
Company will not, without the prior written consent of Xxxxxxx Xxxxx,
(i) directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Option Securities to be sold hereunder, (B) any shares
of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectus, (C) the issuance of Rights in
accordance with the terms of the Rights Agreement and any shares of
Common Stock issued by the Company upon the exercise of a Right, (D)
any shares of Common Stock issued as payment of any part of the
purchase price for funeral homes or cemeteries (or businesses or
capital stock of businesses that operate funeral homes or cemeteries)
which are acquired by the Company (provided, however, that such shares
shall be subject to restrictions that will prohibit the transfer
thereof until after expiration of the Lock-Up Period), (E) options to
purchase shares of Common Stock granted pursuant to the Company's 1994
Long-Term Incentive Plan (the "Incentive Plan") (provided, however,
that such options shall not be exercisable until after the expiration
of the Lock-Up Period except
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upon the termination of the option holder's employment by reason of a
disability, death, or qualified retirement of the option holder as
provided in the option holder's stock option agreement relating to such
options) and (F) restricted shares, restricted stock units, stock unit
awards payable in the form of Common Stock or performance shares issued
or granted pursuant to the Incentive Plan; provided, however, that (1)
in the case of restricted shares, such shares shall be subject to
restrictions on transfer or sale which do not lapse until after the
expiration of the Lock-Up Period, (2) in the case of restricted stock
units or stock unit awards payable in the form of Common Stock, the
issuance of shares of Common Stock in respect of such units shall be
subject to restrictions which do not lapse until after the expiration
of the Lock-Up Period, and (3) in the case of performance shares, such
shares shall be subject to provisions to the effect that they may not
be earned by or vested in the participant prior to the end of the
Lock-Up Period. The Company shall not waive, release or modify any of
the restrictions referred to in the immediately preceding sentence
without the prior written consent of Xxxxxxx Xxxxx.
(k) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required to be filed with
the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the reproduction and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale
and delivery of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including any stock or
other transfer taxes or duties payable upon the sale of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities and (x) the fees and
expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market, it being
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understood, however, that except as provided for in this Section 4(a), Section
4(c), Section 6 and Section 7 hereof, the Underwriters shall not be entitled to
reimbursement under the terms hereof for costs and expenses incurred by them
incident to this Agreement, including the fees of counsel.
(b) Expenses of the Selling Stockholder. The Selling
Stockholder will pay all expenses incident to the performance of its
obligations under, and the consummation of the transactions contemplated by,
this Agreement, including (i) any stamp duties, capital duties and stock
transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (ii) the fees and disbursements of its
counsel and accountants.
(c) Termination of Agreement. If this Agreement is
terminated by the Representatives in accordance with the provisions of Section
5, Section 9(a)(i) or Section 11 hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy
(in the case of representations and warranties that are qualified as to
materiality) or accuracy in all material respects (in the case of
representations and warranties that are not so qualified) of the
representations and warranties of the Company and the Selling Stockholder
contained in Section 1 hereof or in certificates of any officer of the Company
or the Selling Stockholder delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement (including, if applicable, any Rule 462(b)
Registration Statement) has become effective and at Closing Time no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied
with to the reasonable satisfaction of the Representatives based on the
advice of their counsel. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance
with the requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time the
Representatives shall have received (i) the favorable opinion, dated as
of Closing Time, of Xxxxxxx & Xxxxx, L.L.P., counsel for the Company,
in form and substance satisfactory to the Representatives based on the
advice of their counsel, together with signed or reproduced copies of
such letter
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for each of the other Underwriters, to the effect set forth in Exhibit
A-1 hereto, and (ii) the favorable opinion of Xxxxxxx, Xxxxx & Craft,
L.L.P., counsel for the Company, in form and substance satisfactory to
the Representatives based on the advice of their counsel, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit A-2 hereto.
(c) Opinion of Counsel for the Selling Stockholder. At
Closing Time the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Liddell, Sapp, Zivley, Hill &
XxXxxx, L.L.P., Selling Stockholder's Counsel, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to
the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time
the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Xxxxxx & Xxxxxx L.L.P., counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, with respect to the matters set
forth in 1, 4, 7 (solely as to preemptive or other similar rights
arising by operation of law or under the charter or by-laws of the
Company), 8 to 10, inclusive, and the penultimate paragraph of Exhibit
A-1 hereto.
(e) Officers' Certificate. At Closing Time there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct (in the case of representations and
warranties that are qualified as to materiality) or are true and
correct in all material respects (in the case of representations and
warranties that are not so qualified) with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Stockholder. At Closing Time,
the Representatives shall have received a certificate of the Selling
Stockholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholder contained in
Section
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1(b) hereof are true and correct in all respects (in the case of
representations and warranties that are qualified as to materiality) or
are true and correct in all material respects (in the case of
representations and warranties that are not so qualified) with the same
force and effect as though expressly made at and as of Closing Time and
(ii) the Selling Stockholder has complied in all material respects with
all agreements and all conditions on its part to be performed under
this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have received
from Coopers & Xxxxxxx L.L.P. a letter dated such date, in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type reasonably requested
by the Representatives with respect to the financial statements and
certain financial information contained in the Registration Statement
and the Prospectus, as of a specified date not more than three calendar
days prior to the date of this Agreement.
(h) Bring-down Comfort Letter. At Closing Time the
Representatives shall have received from Coopers & Xxxxxxx L.L.P. a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three calendar days prior to Closing Time.
(i) Inclusion for Quotation. At the Closing Time the
Securities shall have been approved for inclusion in the Nasdaq
National Market.
(j) No Objection. The NASD shall not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement,
the Representatives shall have received an agreement substantially in
the form of Exhibit C hereto signed by the persons listed on Schedule D
hereto.
(l) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities,
the obligations of the several Underwriters to purchase such Option
Securities shall be subject to the representations and warranties of
the Company contained in Section 1 hereof or in certificates of any
officer of the Company delivered pursuant to the provisions hereof
being true and correct (in the case of representations and warranties
that are qualified as to materiality) or true and correct in all
material respects (in the case of representations and warranties that
are not so qualified) as of each Date of Delivery and, at the relevant
Date of Delivery, the Representatives having received:
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(i) Officers' Certificate. A certificate, dated
such Date of Delivery, of the President or a Vice President of
the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered
at the Closing Time pursuant to Section 5(e) hereof remains true
and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The
favorable opinion of Xxxxxxx & Xxxxx, L.L.P., counsel for the
Company, and the favorable opinion of Xxxxxxx, Xxxxx & Craft,
L.L.P., counsel for the Company, each in form and substance
satisfactory to the Representatives based upon the advice of
their counsel, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by Section
5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The
favorable opinion of Xxxxxx & Xxxxxx L.L.P., counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from
Coopers & Xxxxxxx L.L.P., in form and substance satisfactory to
the Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(g)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than three
calendar days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
and the Selling Stockholder in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives based on the advice of their counsel.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the Representatives
by notice to the Company at any time at or prior to Closing Time or such
Date of Delivery as the case may be, and such termination shall be
without liability of any party to any
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other party except as provided in Section 4 and except that Sections 6 and 7
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and the
Selling Stockholder, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that subject to Section 6(d) below any such settlement is effected with
the written consent of the Company and the Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (i) the foregoing indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434
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Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) and (ii) the foregoing indemnity with
respect to any untrue statement contained in or omission from a preliminary
prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage or expense purchased any of the Securities which are
the subject thereof if such person was not sent or given a copy of the
Prospectus (as amended or supplemented, if applicable) (in each case exclusive
of the documents from which information is incorporated by reference) at or
prior to the written confirmation of the sale of such Securities to such person
(other than as a result of the failure by the Company to comply with its
obligations under Section 3(d) hereof) and the untrue statement contained in or
omission from such preliminary prospectus was corrected in the Prospectus (as
amended or supplemented, if applicable). Notwithstanding anything in this
Agreement to the contrary, the Selling Stockholder's aggregate liability under
this Agreement (including this Section 6(a)) shall be limited to an amount
equal to the net proceeds (after deducting the Underwriters' discount but
before deducting expenses) received by the Selling Stockholder from the sale of
Securities pursuant to this Agreement and shall be subject to the procedures
set forth in Section 6(f) below.
(b) Indemnification of Company, Directors, Officers and
the Selling Stockholder. Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
and the Selling Stockholder, its directors, and each person, if any, who
controls the Selling Stockholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company and approved by the Selling
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Stockholder, which approval shall not be unreasonably withheld. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse.
If at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the proposed terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for specified fees and
expenses of counsel (the "Requested Expenses"), an indemnifying party shall not
be liable for any settlement of the nature contemplated by Section 6(a)(ii)
that is effected without its consent (after satisfaction of each of the
conditions set forth in the immediately preceding sentence) if, prior to the
date of such settlement, such indemnifying party (i) determines in good faith
that the Requested Expenses are not reasonable, reimburses such indemnified
party in accordance with such request for the portion of the Requested Expenses
it considers to be reasonable and provides written notice to the indemnified
party substantiating the fact that the unpaid balance of the Requested Expenses
is unreasonable, (ii) determines in good faith that the Requested Expenses are
not of a nature required to be paid or reimbursed by the Company under the
terms of Section 6(a)(iii) and provides written notice to the indemnified party
substantiating such determination or (iii) determines in good faith that the
Company is prohibited from reimbursing the Underwriters for the Requested
Expenses under mandatory provisions of applicable law (as set forth in express
statutory provisions or as interpreted pursuant to controlling legal precedent)
and provides written notice to the indemnified party substantiating such
determination.
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(e) Cumulative Agreements. The provisions of this Section
shall not affect any agreement between the Company and the Selling Stockholder
with respect to indemnification.
(f) Certain Procedures Regarding Enforcement Against
Selling Stockholder. In making a claim for indemnification under this Section
6 (other than pursuant to Section 6(a)(iii), as to which the applicable
procedures are set forth below in this paragraph (f)) or contribution under
Section 7 against the Company or the Selling Stockholder, the indemnified
parties may proceed against either (i) both the Company and the Selling
Stockholder or (ii) the Company only, but may not proceed solely against the
Selling Stockholder; provided, however, that the indemnified parties may elect
to proceed solely against the Seller Stockholder if (i) the Company files a
petition for relief under the United States Bankruptcy Code (the "Bankruptcy
Code"), (ii) an order for relief is entered against the Company in an
involuntary case under the Bankruptcy Code and such order remains in effect for
60 consecutive days, (iii) the Company makes an assignment for the benefit of
its creditors or (iv) any court orders or approves the appointment of a
receiver or custodian for the Company or a substantial portion of its assets
and such order continues in effect for 60 consecutive days (the events set
forth in clauses (i) through (iv) above, inclusive, being referred to herein as
the "Company Insolvency Events").
In the event that the indemnified parties are entitled to seek
indemnity or contribution hereunder against any loss, liability, claim, damage
and expense incurred with respect to a final judgment from a trial court then,
as a precondition to any indemnified party obtaining indemnification or
contribution from the Selling Stockholder (but not the Company alone), the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution with respect
to such loss, liability, claim, damage or expense (the "Final Judgment") under
the terms of this Agreement and shall seek to satisfy such Final Judgment in
full from the Company by making a written demand upon the Company for such
satisfaction. Only in the event such Final Judgment shall remain unsatisfied
in whole or in part 45 days following the date of receipt by the Company of
such demand shall any indemnified party have the right to take action to
satisfy such Final Judgment by making demand directly on the Selling
Stockholder (but only if and to the extent the Company has not already
satisfied such Final Judgment, whether by settlement, release or otherwise).
The indemnified parties may exercise this right to first seek to obtain payment
from the Company and thereafter obtain payment from the Selling Stockholder
without regard to the pursuit by any party of its rights to the appeal of such
Final Judgment. The indemnified parties shall, however, be relieved of their
obligation to first obtain a Final Judgment, seek to obtain payment from the
Company with respect to such Final Judgment or, having sought such payment, to
wait such 45 days after failure by the Company to immediately satisfy any such
Final Judgment if any of the Company Insolvency Events shall have occurred.
The provisions of this paragraph (f) are not intended to require
any indemnified party to obtain a Final Judgment before obtaining reimbursement
of expenses pursuant to clause (a)(iii) of this Section 6. However, the
indemnified parties shall first seek to obtain such reimbursement
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in full from the Company by making a written demand upon the Company for such
reimbursement. Only in the event such expenses shall remain unreimbursed in
whole or in part 45 days following the date of receipt by the Company of such
demand shall any indemnified party have the right to receive reimbursement of
such expenses from the Selling Stockholder by making written demand directly on
the Selling Stockholder (but only if and to the extent the Company has not
already satisfied the demand for reimbursement, whether by settlement, release
or otherwise). The indemnified parties shall, however, be relieved of their
obligation to first seek to obtain such reimbursement in full from the Company
or, having made written demand therefor, to wait such 45 days after failure by
the Company to immediately reimburse such expenses if any of the Company
Insolvency Events shall have occurred.
Notwithstanding anything to the contrary set forth in this
paragraph (f), the foregoing provisions shall not prohibit (i) the delivery by
the indemnified parties to the Selling Stockholder of a notice of commencement
of any action as required pursuant to pursuant to paragraph (c) above, (ii) the
commencement of any action against both the Company and the Selling Stockholder
to enforce a claim for indemnification under this Section 6 or contribution
under Section 7 (provided, however, that following the commencement of such
action, the indemnified parties shall comply in all respects with their
obligations under the second and third paragraphs of this paragraph (f) to
first seek indemnification or reimbursement of expenses in such action from
the Company before making written demand directly on the Selling Stockholder)
or (iii) the taking of any other action that is necessary, in the judgment of
the Representatives based on the advice of their counsel, to prevent the
forfeiture of the right to seek indemnification or contribution against the
Selling Stockholder, whether as a result of the application of any period of
limitations or repose or any procedural or other rules relating to the joinder
of necessary parties or otherwise.
SECTION 7. Contribution. If the indemnification
provided for in Section 6 hereof is applicable in accordance with its terms but
is unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein (whether because indemnification is held to be unenforceable or for any
other reason), then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) 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
Stockholder on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
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The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company and the Selling Stockholder and the
total underwriting discount received by the Underwriters, in each case as set
forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholder or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, (i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission and
(ii) the Selling Stockholder shall not be required to contribute any amount in
excess of the amount by which the net proceeds (after deducting the
Underwriters' discount but before deducting expenses) received by the Selling
Stockholder from the sale of Securities pursuant to this Agreement exceeds the
aggregate amount the Selling Stockholder has otherwise been required to pay
pursuant to Section 6 hereof in respect of the applicable 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 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
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For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company or the Selling Stockholder, as the case may be. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreement
among the Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholder, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may
terminate this Agreement, by notice to the Company and the Selling Stockholder,
at any time at or prior to Closing Time (i) if there has been, since the time
of execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which
is such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in the Common Stock of the Company has been suspended or
limited by the Commission or the Nasdaq National Market, or (iv) if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, New York or Texas authorities, in each case (with respect to the items
referred to in this clause (iv))
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the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities.
(b) Liabilities. If this Agreement is terminated pursuant
to this Section, such termination shall be without liability of any party to
any other party, except as provided in Section 4 hereof, and provided further
that Sections 6 and 7 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase the relevant Option Securities, as
the case may be, either the Representatives or the Company and the Selling
Stockholder shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or
in any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
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SECTION 11. Default by the Selling Stockholder or the Company.
(a) If the Selling Stockholder shall fail at Closing Time
to sell and deliver the number of Securities which the Selling Stockholder is
obligated to sell hereunder, the Company shall have the right, to the extent
permitted under the 1933 Act and 1933 Act Regulations, to increase the number
of shares of Common Stock, together with associated Rights, to be sold by it
hereunder to equal the total number to be sold by the Company and the Selling
Stockholder as set forth in Schedule B hereto, in which event the terms
"Initial Securities" and "Securities" as used herein shall be deemed to include
the additional shares of Common Stock, together with associated Rights, to be
sold by the Company. If the Selling Stockholder shall fail at Closing Time to
sell and deliver the number of Securities which the Selling Stockholder is
obligated to sell hereunder and the Company does not exercise the right granted
to it pursuant to the immediately preceding sentence, then the Underwriters
may, at the option of the Representatives, by notice from the Representatives
to the Company either (i) terminate this Agreement without any liability on the
fault of any non-defaulting party, except that the provisions of Sections 4, 6
and 7 shall remain in full force and effect, or (ii) elect to purchase the
Securities which the Company has agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve the Selling Stockholder from
liability, if any, in respect of such default.
In the event of a default by the Selling Stockholder as referred
to in this Section 11, each of the Representatives and the Company shall have
the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required change in the Registration Statement or Prospectus
or in any other documents or arrangements.
(b) If the Company shall fail at the Date of Delivery to
sell the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 4, 6
and 7 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed to the Representatives at 0000
XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, attention of Xxxxxxx Xxxxxx;
notices to the Company shall be directed to it at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000-0000, attention of Xxxxx X. Xxxxxx, III, Chairman,
President and Chief Executive Officer; and notices to the Selling Stockholder
shall be directed to 0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000, attention of
Xxxxx X. Shelger, Senior Vice President and General Counsel.
SECTION 13. Parties. This Agreement shall each inure to
the benefit of and be binding upon the Underwriters, the Company and the
Selling Stockholder and their respective
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successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and the Selling Stockholder and their respective
successors and the controlling persons and officers and directors referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Stockholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
33
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Stockholder a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the Company and the
Selling Stockholder in accordance with its terms.
Very truly yours,
EQUITY CORPORATION
INTERNATIONAL
By
----------------------------------
Name: Xxxxx X. Xxxxxx, III
Title: President and Chief
Executive Officer
SERVICE CORPORATION
INTERNATIONAL
By
----------------------------------
Name:
Title:
34
36
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
ABN AMRO CHICAGO CORPORATION
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
------------------------------
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A
hereto.
35
37
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated . . . . . . . . . . . .
ABN AMRO Chicago Corporation . . . . . . . . . . . .
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . .
Xxxxxxx Xxxxx & Associates, Inc. . . . . . . . . . . _________
Total . . . . . . . . . . . . . . . . . . . 7,994,522
=========
X-0
00
XXXXXXXX X
Number of Initial
Securities to be Sold
----------------------
Service Corporation International 7,994,522
Total . . . . . . . . . . . . . 7,994,522
=========
B - 1
39
SCHEDULE C
Pricing Information
1. The initial public offering price per share for the
Securities shall be $____.
2. The purchase price per share for the Securities to be
paid by the several Underwriters shall be $____, being an amount equal
to the initial public offering price per share set forth above less
$____ per share; provided that the purchase price per share for any
Option Securities purchased upon the exercise of the over-allotment
option described in Section 2(b) shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option
Securities.
C - 1
40
SCHEDULE D
List of persons and entities
subject to lock-up
1. Xxxxxxx X. XxXxxxxx
2. Xxxx X. Xxxxxxx
3. X. Xxxxxx Xxxxxx
4. Xxxxx X. Xxxxx
5. Xxxx X. Xxxxxx
6. Xxxxxx X. XxXxxx
7. Xxxxxxx X. Xxxxx
8. Xxxxx X. Xxxxxx, III
D - 1
41
Exhibit A-1
FORM OF OPINION OF XXXXXXX & XXXXX, L.L.P.
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i) and 5(l)
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
2. The Company has the requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under the Purchase Agreement.
3. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, described in Section
3(j) of the Purchase Agreement). The 3,795,000 shares of Common Stock issued
by the Company in its initial public offering in October 1994 (the "Initial
Public Offering Shares") and the 4,335,000 shares of Common Stock issued by the
Company in its secondary offering in April 1996 (the "Secondary Public Offering
Shares") have been duly authorized and validly issued and are fully paid and
non-assessable.
4. The Option Securities to be purchased by the
Underwriters from the Company have been duly authorized for issuance and sale
to the Underwriters pursuant to the Purchase Agreement and, when issued and
delivered by the Company pursuant to the Purchase Agreement against payment of
the consideration set forth in the Purchase Agreement, will be validly issued
and fully paid and non-assessable.
5. The shares of Common Stock (including the Securities)
conform as to legal matters in all material respects to the description thereof
in the Company's registration statement on Form 8-A (File No. 0-24728), as
amended, which is incorporated by reference in the Prospectus.
6. The Rights conform as to legal matters in all material
respects to the description thereof in the Company's registration statement on
Form 8-A (File No. 0-24728), as amended, which is incorporated by reference in
the Prospectus.
A-1-1
42
7. The issuance and sale of the Option Securities by the
Company is not subject to preemptive or other similar rights of any
securityholder of the Company arising by operation of law, under the charter or
bylaws of the Company or, to our knowledge, under any agreement to which the
Company or any of its subsidiaries is a party or by which it is bound.
8. The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
9. The Registration Statement (including, if applicable,
any Rule 462(b) Registration Statement) has been declared (or, in the case of
any Rule 462(b) Registration Statement, has become) effective under the 1933
Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b). To our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings therefor have
been initiated or threatened by the Commission.
10. The Registration Statement (including, if applicable,
any Rule 462(b) Registration Statement) the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and notes thereto and related schedules and other
financial data included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
11. The documents filed pursuant to the 1934 Act or the
1933 Act and incorporated by reference in the Prospectus (other than the
financial statements and notes thereto and related schedules and other
financial data included therein, as to which no opinion need be rendered), when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of the
Commission thereunder.
12. The form of certificate used to evidence the Common
Stock complies in all material respects with Section 158 of the Delaware
General Corporation law and with any applicable requirements of the charter and
by- laws of the Company.
13. To our knowledge, there is not any action, suit,
proceeding, inquiry or investigation to which the Company or any Subsidiary is
or is threatened to be made a
A-1-2
43
party, or to which the property of the Company or any Subsidiary is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which (a) is required to be disclosed in the Registration Statement
and the Prospectus (other than as disclosed therein) or (b) seeks to enjoin or
prevent the issuance, sale and delivery of the Option Securities.
14. The information in the Registration Statement under
Item 15, to the extent that it constitutes matters of law, summaries of legal
matters, the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
15. All descriptions in the Prospectus of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
16. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various jurisdictions, as
to which we express no opinion) is necessary or required in connection with the
due authorization, execution and delivery by the Company of the Purchase
Agreement or for the offering, issuance or sale by the Company of the Option
Securities.
17. The execution, delivery and performance by the Company
of the Purchase Agreement and the consummation by the Company of the
transactions thereunder (including the issuance and sale by the Company of the
Option Securities under the Purchase Agreement) do not and will not, whether
with or without the giving of notice or lapse of time or both constitute a
breach of, or default or Repayment Event under or 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 any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreement or
instrument filed as an exhibit to the Registration Statement or the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (other than
with respect to covenants or agreements of a financial numerical nature or
requiring computation, to which we express no opinion) nor will such action
result in any violation of (i) the provisions of the charter or bylaws of the
Company or any Subsidiary, (ii) any applicable law, statute, rule or regulation
or (iii) any
A-1-3
44
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court which names the Company or any Subsidiary or any of
their respective properties or assets as a party or being subject thereto.
18. The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in
the 1940 Act.
19. To our knowledge, except as disclosed in the
Prospectus, there is no agreement to which the Company and any security holder
are parties which gives such security holder the right to require the Company
to register under the 1933 Act any securities of the Company, and all rights
under any such agreement to require the registration of any securities of the
Company in connection with the transactions contemplated by this Agreement have
been complied with or waived in accordance with the requirements of the
agreements or instruments granting such rights.
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any post-effective amendment
thereto, including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and notes thereto and related
schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which we make no statement), at the time
such Registration Statement or any such post-effective amendment became
effective, 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 that the Prospectus or any amendment or
supplement thereto (except for financial statements and notes thereto and
related schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we make no statement), at
the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering the opinion set forth in paragraph 3 above, to
the extent that such opinion relates to the due authorization or valid issuance
of outstanding shares of Common Stock other than the Initial Public Offering
Shares and the Secondary Public Offering Shares, such counsel shall be entitled
to state that such counsel has relied on the opinion of Xxxxxxx, Xxxxx & Craft,
L.L.P., a copy of which has been furnished to the Representatives.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper on certificates of responsible officers of the Company and public
officials. Such opinion shall not state that it is to be
A-1-4
45
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
A-1-5
46
Exhibit A-2
FORM OF OPINION OF XXXXXXX, XXXXX & CRAFT, L.L.P.
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(2)
1. The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
2. The shares of issued and outstanding capital stock of
the Company (other than the Initial Public Offering Shares and the Secondary
Public Offering Shares, as to which we express no opinion) have been duly
authorized and validly issued and are fully paid and non-assessable. None of
the issued and outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of
the Company arising by operation of law, under the charter or bylaws of the
Company or, to our knowledge, under any agreement to which the Company or any
of its subsidiaries is a party or by which it is bound. The sale of the
Securities by the Selling Stockholder is not subject to preemptive or similar
rights of any securityholder of the Company arising by operation of law or
under the charter or bylaws of the Company or, to our knowledge, arising under
any agreement to which the Company or any of its subsidiaries is a party or by
which any of them are bound.
3. Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect. Except
as otherwise disclosed in the Registration Statement or described in Section
1(a)(vii) of the Purchase Agreement, all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to our knowledge, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding
shares of capital stock of any
A-2-1
47
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary.
4. To our knowledge, there is not any action, suit,
proceeding, inquiry or investigation, to which the Company or any Subsidiary is
or is threatened to be made a party, or to which the property of the Company or
any Subsidiary is subject, before or brought by any court or governmental
agency or body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect.
5. The information in the Prospectus under
"Business--Legal Proceedings and Regulatory Matters" and in the Registration
Statement under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in
all material respects.
6. To our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
7. To our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
obligation, agreement, covenant (other than with respect to covenants of a
financial nature requiring computation, as to which we express no opinion) or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement, except where such violation or
failure to comply would not have a Material Adverse Effect.
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any amendment thereto, including the
Rule 430A Information and Rule 434 Information (if applicable), (except for
financial statements and notes thereto and related schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we make no statement), at the time such Registration
Statement or any such post-effective amendment became effective, 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 that the Prospectus or any amendment or supplement thereto
(except for financial statements and note thereto and related schedules and
other financial data included or incorporated by reference therein or omitted
therefrom, as to which we make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was issued or
at the Closing Time, included or includes an untrue statement of a material
fact or omitted or
A-2-2
48
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper on certificates of responsible officers of the Company and public
officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
A-2-3
49
Exhibit B
FORM OF OPINION OF SELLING STOCKHOLDER'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(c)
1. The Selling Stockholder has the full right, power and
authority (A) to enter into the Purchase Agreement and (B) to sell, transfer and
deliver the Securities to be sold by the Selling Stockholder under the Purchase
Agreement.
2. The Purchase Agreement has been duly executed and
delivered by the Selling Stockholder.
3. The Selling Stockholder is, and immediately prior to
Closing Time will be, the sole registered owner of the Securities to be sold by
the Selling Stockholder, and to our knowledge, the Selling Stockholder owns
such Securities free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. Upon consummation of the sale of the
Securities to be sold by the Selling Stockholder pursuant to the Purchase
Agreement, assuming that the Underwriters purchased such Securities without
notice of any "adverse claim" (as defined in Section 8.102 of the Texas Uniform
Commercial Code), the Underwriters will have acquired all rights of the Selling
Stockholder in such Securities free of any "adverse claim" (as defined in
Section 8.102 of the Texas Uniform Commercial Code).
4. To our knowledge, the sale of the Securities by the
Selling Stockholder is not subject to preemptive or similar rights arising
under any agreement to which the Selling Stockholder is a party or by which it
is bound.
5. No filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations or as may be required under the securities or blue sky
laws of the various jurisdictions, as to which we express no opinion) is
necessary or required to be obtained by the Selling Stockholder for the
performance by the Selling Stockholder of its obligations under the Purchase
Agreement, or in connection with the offer, sale or delivery of the Securities
by the Selling Stockholder.
6. The execution, delivery and performance by the Selling
Stockholder of the Purchase Agreement and the consummation by the Selling
Stockholder of the transactions thereunder (including the sale by the Selling
Stockholder of the Securities to
B-1
50
be sold by the Selling Stockholder) do not and will not, whether with or
without the giving of notice or passage of time or both, constitute a breach
of, or default under or result in the creation or imposition of any lien,
charge or encumbrance upon the Securities or any property or assets of the
Selling Stockholder pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other instrument or
agreement known to us to which the Selling Stockholder is a party or by which
he may be bound, or to which any of the property or assets of the Selling
Stockholder may be subject nor will such action result in any violation of the
provisions of any law, administrative regulation, judgment or order of any
governmental agency or body or any administrative or court decree which names
the Selling Stockholder or any of its properties as a party or as being subject
thereto.
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51
Exhibit C
[Form of lock-up from directors, officers or other stockholders
pursuant to Section 5(k)]
_______________ _____, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
ABN AMRO CHICAGO CORPORATION
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Equity Corporation International
Dear Sirs:
The undersigned, [a stockholder] [an officer] [a director] of
Equity Corporation International, a Delaware corporation (the "Company"),
understands that Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), ABN AMRO Chicago Corporation, X.X. Xxxxxx
Securities Inc. and Xxxxxxx Xxxxx & Associates, Inc. propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company and Service
Corporation International (the "Selling Stockholder") providing for the public
offering of shares (the "Securities") of the Company's common stock, par value
$.01 per share (the "Common Stock"). In recognition of the benefit that such
an offering will confer upon the undersigned as [a stockholder] [an officer] [a
director] of the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with each underwriter to be named in the Purchase Agreement that, during
a period of 90 days from the date of the Purchase Agreement, the undersigned
will not, without the prior written consent of Xxxxxxx Xxxxx, directly or
C-1
52
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right
or warrant for the sale of, or otherwise dispose of or transfer any shares of
the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
-----------------------------
Print Name:
---------------------------
C-2
