1,600,000 SHARES
XXXX, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
WHEAT, FIRST SECURITIES, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the Several
Underwriters Named in Schedule I
hereto
c/o Wheat, First Securities, Inc.
Riverfront Plaza
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 January 29, 1997
Dear Sirs:
Xxxx, Inc., a North Carolina corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
1,200,000 shares of common stock, $0.05 par value, of the Company (the "Common
Stock"), and the selling shareholders named in Schedule II hereto (the "Selling
Shareholders"), propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 400,000 shares of Common Stock and, at
the election of the Underwriters, an aggregate of 240,000 additional shares as
set forth in Schedule II. The aggregate of 1,600,000 shares to be sold by the
Company and the Selling Shareholders are herein called the "Firm Securities,"
and the aggregate of 240,000 additional shares to be sold by the Selling
Shareholders are herein called the "Optional Securities." The Firm Securities
and the Optional Securities that the Underwriters elect to purchase pursuant to
Section 2 hereof are collectively called the "Securities."
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, the
Underwriters that:
(i) A registration statement in respect of the Securities on
Form S-3 (File No. 333-18199) under the Securities Act of 1933, as
amended (the "Act"), and as a part thereof a preliminary prospectus, in
respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission") in the form heretofore delivered
to you, and, excluding exhibits thereto, for each of the other
Underwriters; such registration statement, as amended, has been
declared effective by the Commission; no other document with respect to
such registration statement (other than those documents incorporated
into such registration statement by reference) has heretofore been
filed with the Commission other than in accordance with Section 5(a) of
this Agreement; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission (any
preliminary prospectus included in such registration statement or filed
with the Commission pursuant to Rule 424 of the rules and regulations
of the Commission under the Act being hereinafter called a "Preliminary
Prospectus", the various parts of such registration statement,
including (i) all exhibits thereto, and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
of this Agreement and deemed by virtue of Rule 430A under the Act to be
part of the registration statement at the time it was declared
effective, together with any related registration statement filed with
the Commission for registration of a portion of the Securities, which
registration statement became effective pursuant to Rule 462(b) under
the Act, and (ii) the documents incorporated by reference in the
registration statement at the time it was declared effective, each as
amended at the time such part became effective, being herein called
collectively the "Registration Statement," and the final prospectus, in
the form first filed pursuant to Rule 424(b), being hereinafter called
the "Prospectus," PROVIDED, that if the Company elects to rely on Rule
434 under the Act, all references to the Prospectus shall be deemed to
include, without limitation, the form of prospectus and the abbreviated
term sheet, taken together, provided to the Underwriters by the Company
in reliance on Rule 434); any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Form S-3
under the Act; and the terms "supplement" and "amendment" or "amend" as
used in this Agreement shall include all documents subsequently filed
by the Company with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are deemed to be
incorporated by reference in the Prospectus;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain any
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
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which they were made, not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through you
expressly for use therein or by the Selling Shareholder expressly for
use in the preparation of the answers therein to Item 7 of Form S-3;
(iii) Each document incorporated by reference in the
Prospectus when they were filed, or to be filed, with the Commission,
conformed in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder, and, as
of their filing date, none of such documents 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;
(iv) The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto 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
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters through you expressly for use therein or by any of the
Selling Shareholders expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries, a
complete and correct list of which is attached as Schedule III (the
"Subsidiaries"), has sustained since the date of the latest audited
financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in
the outstanding capital stock or long-term debt of the Company (other
than payments in the ordinary course) or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus;
(vi) The Company and each of its Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all material items of personal property owned by
them, free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus, secure obligations incurred in
connection with industrial revenue bond financing or such as do not
materially affect the value of
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such property and do not interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries; and any real
property and buildings held under lease by the Company or any of the
Subsidiaries are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company or such Subsidiaries;
(vii) The Company and each of its Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, with
power and authority (corporate and other) to own or lease their
respective properties and conduct their respective businesses as
described in the Prospectus, and each has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not result
in a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and the
Subsidiaries taken as a whole;
(viii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization" and in the
Form 8-A filed with the Commission on December 19, 1996, which is
incorporated by reference in the Prospectus; all of the issued shares
of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and nonassessable and conform to the
description of the capital stock of the Company contained in the
Prospectus; except as described in the Prospectus, there are no
preemptive or other similar rights to subscribe for or to purchase any
securities of the Company; except as described in the Prospectus, there
are no warrants, options or other similar rights to purchase any
securities of the Company; neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by
this Agreement gives rise to any rights for or relating to the
registration of any securities of the Company with respect to such
filing, offering or sale, other than rights which have been waived or
satisfied;
(ix) All of the issued and outstanding shares of capital stock
of each of the Subsidiaries owned by the Company have been duly and
validly authorized and issued and are fully paid and nonassessable; and
except otherwise set forth in the Prospectus, all outstanding shares of
capital stock of each of the Subsidiaries owned by the Company are
directly owned by the Company free and clear of any perfected security
interest and any other security interests, claims, liens or
encumbrances;
(x) The Securities to be sold by the Company pursuant to this
Agreement have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and nonassessable and will conform to the
description of the Securities contained in the Prospectus as amended or
supplemented;
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(xi) The issue and sale of the Securities by the Company and
the performance by the Company of this Agreement and the consummation
by the Company of the other transactions herein contemplated will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries is bound or to which any of the
property or assets of the Company or any of the Subsidiaries is bound
or to which any of the property or assets of the Company or any of the
Subsidiaries is subject, nor will such action result in any violation
of the provisions of the Articles of Incorporation or Bylaws of the
Company (each as amended to date the "Charter" and "Bylaws",
respectively) or the articles of incorporation or bylaws of any of the
Subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement, except such
as may be required under the Act and such as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters and the clearance of
such offering with the National Association of Securities Dealers,
Inc.;
(xii) There are no legal or governmental proceedings pending
to which the Company or any of its Subsidiaries is a party or of which
any property of the Company or any of its Subsidiaries is the subject
other than as set forth or contemplated in the Prospectus, that, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company or of the Company and the Subsidiaries taken as a whole
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or by others;
(xiii) KPMG Peat Marwick LLP, who have certified certain
financial statements of the Company and the Subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(xiv) All employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company
comply in all material respects with the requirements of ERISA and no
employee pension benefit plan (as defined in Section 3(2) of ERISA) has
incurred or assumed an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability (other than for the payment of premiums) to the Pension
Benefit Guaranty Corporation;
(xv) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes, as set forth in the
Registration Statement present fairly the financial position and the
results of operations of the Company and the Subsidiaries at
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the indicated dates and for the indicated periods; such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods
presented except as noted in the notes thereon, and all adjustments
necessary for a fair presentation of results for such periods have been
made; and the selected financial information included in the Prospectus
presents fairly the information shown therein and has been compiled on
a basis consistent with the financial statements presented therein;
(xvi) The Company and each of the Subsidiaries have filed all
federal, state and foreign income, franchise and excise tax returns
which have been required to be filed (or has received an extension with
respect thereto), and has paid, or made adequate reserves for, all
taxes indicated by said returns and all assessments received by them to
the extent that such taxes have become due and are not being contested
in good faith; to the best knowledge of the Company there is no tax
deficiency that has been or might be asserted against the Company that
could have a material adverse effect on the business, properties,
business prospects, condition (financial or otherwise), earnings or
results of operations of the Company;
(xvii) Neither the Company nor any of the Subsidiaries is in
violation of any international, federal or state law, regulation, or
treaty relating to the storage, handling, transportation, treatment or
disposal of hazardous substances (as defined in 42 U.S.C. Section 9601)
or hazardous materials (as defined by any international, federal or
state law or regulation) or other waste products, which violation is
reasonably likely to result in a material adverse effect on the
financial condition or business operations or properties of the Company
and the Subsidiaries taken as a whole, and the Company and each of the
Subsidiaries have received all material permits, licenses or other
approvals as may be required of them under applicable international,
federal and state environmental laws and regulations to conduct their
business as described in the Prospectus; and the Company and each of
the Subsidiaries are in compliance in all material respects with the
terms and conditions of any such permit, license or approval; neither
the Company nor any of the Subsidiaries has received any notices or
claims that it is a responsible party or a potentially responsible
party in connection with any claim or notice asserted pursuant to 42
U.S.C. Section 9601 ET SEQ. or any state superfund law; and the
disposal by the Company or any Subsidiary of any of the Company's and
each Subsidiary's hazardous substances, hazardous materials and other
waste products has been lawful in all material respects;
(xviii) No relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company or any of the Subsidiaries on the other hand, that is required
by the Act or the Exchange Act, or by the rules and regulations under
either of such Acts to be described in the Registration Statement and
the Prospectus or documents incorporated by reference therein that is
not so described;
(xix) Neither the Company nor any of the Subsidiaries has
taken and none of such entities will take, directly or indirectly, any
action that is designed to or that has
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constituted or that 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;
(xx) Each of the Company and the Subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate licenses,
copyrights, trademarks, service marks and trade names (collectively,
"intellectual property") necessary to carry on its business as
presently operated by it, except where the failure to own or possess or
have the ability to acquire any such intellectual property would not,
individually or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries taken as a whole, and neither the Company
nor any of the Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any intellectual property or of any facts which would
render any intellectual property invalid or inadequate to protect the
interest of the Company or any of the Subsidiaries therein and which
infringement or conflict could have a material adverse effect on the
Company and the Subsidiaries taken as a whole;
(xxi) Except as described in the Prospectus, the Company and
the Subsidiaries maintain insurance of the types and in the amounts
that are customary or required for the business operated by them, all
of which insurance is in full force and effect;
(xxii) The Company and each of the Subsidiaries holds and are
operating in compliance, in all material respects, with all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of their respective businesses as presently
being conducted ("licenses") and all licenses are valid and in full
force and effect, and the Company, and each of the Subsidiaries are in
compliance, in all material respects, with all laws, regulations,
orders and decrees applicable to them;
(xxiii) The Securities have been approved for listing, subject
to notice of issuance, on the New York Stock Exchange;
(xxiv) This Agreement has been duly authorized, executed and
delivered by the Company;
(xxv) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences;
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(xxvi) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required. All such contracts to
which the Company or a Subsidiary is a party constitute valid and
binding agreements of the Company; and
(xxvii) The conditions for use of registration statements on
Form S-3 set forth in the General Instructions on Form S-3 have been
satisfied and the Company is entitled to use such form for the
transaction contemplated herein.
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants to, and agrees with, the Underwriters and the Company,
solely with respect to such Selling Shareholder, that:
(i) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
execution and delivery by such Selling Shareholder of this Agreement
and for the sale and delivery of the Securities to be sold by such
Selling Shareholder hereunder, except such as may be required under the
Act or state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters and the
clearance of such offering with the National Association of Securities
Dealers, Inc.; and such Selling Shareholder has full right, power and
authority to enter into this Agreement and to sell, assign, transfer
and deliver the Securities to be sold by such Selling Shareholder
hereunder;
(ii) The sale of the Securities to be sold by such Selling
Shareholder hereunder and the performance of this Agreement and the
consummation by such Selling Shareholder of the transactions herein
contemplated will not conflict with or result in a breach or violation
of any terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement, guarantee
or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder is subject, or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or the property of such
Selling Shareholders;
(iii) At such Delivery Date (as hereinafter defined) such
Selling Shareholder will have good and valid title to the Securities to
be sold by such Selling Shareholder hereunder, free and clear of all
liens, encumbrances, equities or claims (other than those imposed by
the Act or under this Agreement); and, upon delivery of such Securities
and payment therefor pursuant hereto, good and valid title to all of
such Securities, free and clear of all liens, encumbrances, equities or
claims, will be transferred to the Underwriters;
(iv) No offering, sale or other disposition of any Securities
(or any securities convertible into or exercisable for such Securities)
will be made within 180 days after the
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date of the Prospectus, directly or indirectly, by such Selling
Shareholder, otherwise than hereunder or with your written consent;
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities;
(vi) Such Selling Shareholder is familiar with the
Registration Statement and the Prospectus and verifies that the
information set forth therein under the caption "Selling Shareholders"
respecting it is true and complete;
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982, as amended, with respect to the
transactions herein contemplated, such Selling Shareholder agrees to
deliver to you prior to or at the First Delivery Date (as hereinafter
defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof);
(viii) Such Selling Shareholder specifically agrees that the
Securities are subject to the interests of the Underwriters hereunder.
Such Selling Shareholder agrees that its obligations hereunder shall
not be terminated by operation of law, whether by death or incapacity,
liquidation or dissolution, or by the occurrence of any other event
that is not by the terms of this Agreement a condition to such Selling
Shareholder's obligations hereunder;
(ix) This Agreement has been duly executed and delivered by or
on behalf of each Selling Stockholder; and
(x) Such Selling Shareholder does not believe that any of the
representations and warranties of the Company contained in Section 1(a)
hereof are not true and correct in all material respects.
2. PURCHASE AND SALE.
Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Shareholders, severally and not jointly, agree to sell
to the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and each of the Selling Shareholders, at a
purchase price per share of [$ . ], the number of Firm Securities to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Securities as
provided below, each of the Selling Shareholders agrees, severally and not
jointly, as set forth in Schedule II hereto, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Shareholders, at the purchase price set forth
in clause (a) of this
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Section 2, that portion of the number of Optional Securities as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional securities) determined by multiplying such number of Optional
Securities by a fraction, the numerator of which is the maximum number of
Optional Securities that such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto, and the denominator
of which is the maximum number of the Optional Securities that all of the
Underwriters are entitled to purchase.
Each of the Selling Shareholders, as and to the extent indicated in
Schedule II hereto, hereby grants, severally and not jointly, to the
Underwriters an option to purchase at their election up to 120,000 Optional
Securities, as more particularly set forth in Schedule II hereto, at the
purchase price per share set forth in the paragraph above, for the sole purpose
of covering over-allotments in the sale of the Firm Securities. Any such
election to purchase Optional Securities shall be made in proportion to the
maximum number of Optional Securities to be sold by the Selling Shareholders as
set forth in Schedule II hereto. Any such election to purchase Optional
Securities may be exercised no more than once by written notice from you to the
Selling Shareholders, given within a period of 30 days after the date of this
Agreement, setting forth the aggregate amount of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered and
payment therefor is to be made, as determined by you but in no event earlier
than the First Delivery Date (as defined in Section 4 hereof) or, unless you
otherwise agree in writing, earlier than two or later than 10 business days
after the date of such notice; provided that if such notice is delivered after
noon, Richmond, Virginia time, the date for delivery of the Optional Securities
and payment therefor shall be no earlier than three business days after the date
of such notice.
3. OFFERING BY THE UNDERWRITERS.
Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. DELIVERY AND PAYMENT.
Certificates in definitive form for the Securities to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as Wheat, First Securities, Inc. may request upon at least two business
days' prior notice to the Company or any Selling Shareholder, as applicable,
shall be delivered by or on behalf of the Company or such Selling Shareholder,
as applicable, to Wheat, First Securities, Inc., for the account of each
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor. Payment of the purchase price for the Securities shall
be made by certified or official bank check in immediately available funds or,
at the option of Wheat, First Securities, Inc., by wire transfer of immediately
available funds all at the offices of Wheat, First Securities, Inc., Riverfront
Plaza, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx. The time and date of such
delivery and payment shall be, with respect to the Firm Securities, 10:00 a.m.,
Richmond, Virginia time, ON _______________, 1997 or at such other time and date
as you and the Company may agree upon in writing, and, with respect to the
Optional Securities, 10:00 a.m., Richmond, Virginia time,
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on the date specified by you in the written notice given by you (consistent with
Section 2 hereof) of the Underwriters' election to purchase such Optional
Securities, or at such other time and date as you and the Selling Shareholders
may agree upon in writing. Such time and date for delivery of the Firm
Securities is herein called the "First Delivery Date," such time and date for
delivery of the Optional Securities, if not the First Delivery Date, is herein
called the "Second Delivery Date," and each such time and date for delivery is
herein called a "Delivery Date." Such certificates will be made available for
checking and packaging at least 24 hours prior to each Delivery Date at the
offices of Wheat, First Securities, Inc. at the address set forth above or such
other location designated by the Underwriters to the Company and the Selling
Shareholders.
5. AGREEMENTS OF THE COMPANY.
The Company agrees with the Underwriters:
(a) To prepare the Prospectus in a form reasonably approved by you and
to file such Prospectus (or a term sheet as permitted by Rule 434(c)) pursuant
to Rule 424(b) under the Act not later than the Commission's close of business
on the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act; to make no amendment or supplement to the Registration
Statement or Prospectus prior to any Delivery Date which shall be reasonably
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and for so long as the delivery of a
Prospectus is required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its reasonable best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, PROVIDED that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to time
reasonably request during such
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period following the date hereof that a prospectus is required to be delivered
in connection with offers or sales of Securities, and, if the delivery of a
prospectus is required during this period and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus to comply with the Act,
to notify you and upon your request to file such document and to prepare and
furnish without charge to you and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance;
(d) As soon as practicable, to make generally available to its
shareholders (within the meaning of Rule 158 under the Act) and to deliver to
you, an earnings statement of the Company, conforming with the requirements of
Section 11(a) of the Act and Rule 158 under the Act, covering a period of at
least 12 months beginning after the effective date of the Registration
Statement; provided that, so long as the Company continues to be subject to the
reporting requirements under Section 13 or 15(d) of the Exchange Act, the
Company shall not be required to make available any such earnings statement
other than as included in periodic reports filed with the Commission as required
by such provisions of the Exchange Act;
(e) For a period of 180 days from the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than the Securities to be sold by the Company hereunder or
pursuant to employee stock option plans or pursuant to options, warrants or
rights outstanding on the date of this Agreement) without your prior written
consent;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) distributed to shareholders generally, and
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request; and
(g) To apply the net proceeds from the sale of the Securities for the
purposes set forth in the Prospectus.
6. PAYMENT OF EXPENSES.
The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's and the Selling Shareholders' counsel and
accountants in connection with the registration of the Securities under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the
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Underwriters and dealers; (ii) the cost of reproducing any Agreement Among
Underwriters, this Agreement, the Blue Sky Survey and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky Survey;
(iv) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) the cost of preparing stock certificates; (i) the costs or
expenses of any transfer agent or registrar; and (vi) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that except as provided in Section 8 and Section 11 hereof, the Underwriters
will pay all their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Securities by them and any
advertising expenses connected with any offers they may make.
7. CONDITIONS TO OBLIGATIONS OF UNDERWRITERS.
The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and each of the Selling Shareholders herein are, at and as of such
Delivery Date, true and correct, the condition that the Company and each of the
Selling Shareholders shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Hunton & Xxxxxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Delivery Date, with
respect to the incorporation of the Company, the validity of the Securities
being issued at such Delivery Date, the Registration Statement, the Prospectus,
and other related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., counsel for the Company, shall
have furnished to you their written opinion, dated such Delivery Date, in form
reasonably satisfactory to you, to the effect set forth in Exhibit A attached
hereto.
Such opinion may be furnished subject to such stated assumptions,
limitations and qualifications as shall be reasonably acceptable to Hunton &
Xxxxxxxx, counsel for the Underwriters.
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(d) Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., counsel for the Selling
Shareholders, shall have furnished to you its written opinion, dated such
Delivery Date, in form and substance reasonably satisfactory to you, to the
effect set forth in Exhibit B.
Such opinion may be furnished subject to such stated assumptions,
limitations and qualifications as shall be reasonably acceptable to Hunton &
Xxxxxxxx, counsel for the Underwriters.
(e) At 10:00 a.m., Richmond, Virginia, time, on the date of this
Agreement and the effective date of the most recently filed post-effective
amendment to the Registration Statement and also at each Delivery Date, KPMG
Peat Marwick LLP shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance reasonably
satisfactory to you, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information relating
to the Company and its Subsidiaries contained in the Registration Statement and
the Prospectus;
(f) (i) Neither the Company nor any of the Subsidiaries shall have
sustained, since the date of the latest audited financial statements included in
the Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the outstanding capital stock or long-term debt of the Company or any
of the Subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company or any of the
Subsidiaries otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii) is in your
reasonable judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at such Delivery Date on the terms and in the manner
contemplated by the Prospectus;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading of any of the
securities of the Company on the New York Stock Exchange; (ii) any United States
federal or state statute, regulation, rule or order of any court, legislative
body, agency or other governmental authority shall have been enacted, published,
decreed or promulgated or any proceeding or investigation shall have been
commenced which, in your reasonable judgment, materially and adversely affects
the business or operations of the Company; (iii) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange;
(iv) a general moratorium on commercial banking activities in New York or North
Carolina declared by either federal or New York or North Carolina authorities;
(v) the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if any such
event specified in this clause (v) would have such a materially adverse effect,
in your reasonable judgment, as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities being
delivered at such Delivery Date on the terms and in the manner contemplated
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in the Prospectus; or (vi) such a material adverse change in general economic,
political, financial or international conditions affecting financial markets in
the United States having a material adverse impact on trading prices of
securities in general, as, in your reasonable judgment, makes it inadvisable to
proceed with the payment for and delivery of the Securities;
(h) The Company shall have furnished to you copies of agreements
between the directors and executive officers of the Company, in form and content
reasonably satisfactory to you, pursuant to which such persons agree not to
offer, sell, or contract to sell, or otherwise dispose of, any shares of Common
Stock beneficially owned by them or any securities convertible into, or
exchangeable for, Common Stock (other than pursuant to BONA FIDE gifts to
persons who agree in writing with the donor to be bound by this restriction), on
or before the 180th day after the date of this Agreement without your prior
written consent; and
(i) The Company and each of the Selling Shareholders shall have
furnished or caused to be furnished to you at such Delivery Date certificates of
officers of the Company and each of the Selling Shareholders reasonably
satisfactory to you as to the accuracy of the respective representations and
warranties of the Company and each of the Selling Shareholders herein at and as
of such Delivery Date, as to the performance by the Company and each of the
Selling Shareholders of all of their obligations hereunder to be performed at or
prior to such Delivery Date, as to the matters set forth in subsections (a) and
(f) of this Section and as to such other matters as you may reasonably request.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will promptly reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating, preparing to defend or defending, or appearing as a
third-party witness in connection with, any such action or claim; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or Prospectus or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriters through you expressly
for use therein; PROVIDED, FURTHER, that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the
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written confirmation of the sale of the Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities.
(b) Subject to subsection (f) of this Section, each of the Selling
Shareholders severally and not jointly will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will promptly reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating, preparing to defend or defending,
or appearing as a third-party witness in connection with, any such action or
claim; PROVIDED, HOWEVER, that a Selling Shareholder will only be liable for
information furnished in writing by or on behalf of such Selling Shareholder
expressly for use in any Preliminary Prospectus, the Registration Statement, the
Prospectus or any amendment or supplement thereto, it being understood and
agreed that the only such information furnished by a Selling Shareholder
consists of the information regarding it included under the caption "Selling
Shareholders"; PROVIDED, FURTHER, that none of the Selling Shareholders shall be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by the Underwriters through you expressly for use therein; PROVIDED,
FURTHER, that the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Securities to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities.
(c) Each Underwriter will indemnify and hold harmless the Company and
any Selling Shareholder against any losses, claims, damages or liabilities to
which the Company or any Selling Shareholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
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Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use
therein; and will reimburse the Company and any Selling Shareholder for any
legal or other expenses reasonably incurred by the Company and the Selling
Shareholder in connection with investigating, preparing to defend or defending,
or appearing as a third-party witness in connection with, any such action or
claim. The Company and each of the Selling Shareholders acknowledge that the
statements set forth in the last paragraph immediately preceding your names on
the cover page, the last paragraph on the inside front cover page and the first,
second and third paragraphs under the heading "Underwriting" in the Preliminary
Prospectus and the Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in the
Preliminary Prospectus or the Prospectus, and you, as the Representatives,
confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time for all indemnified parties unless such firm of
attorneys shall have reasonably concluded that one or more indemnified parties
has actual differing interests with other indemnified parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). The
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indemnifying party shall not be liable for any settlement entered into without
its written consent (which consent will not be unreasonably withheld).
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and each
of the Selling Shareholders on the one hand and the Underwriters on the other
from the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and each of
the Selling Shareholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company and each of the Selling Shareholders on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (after deducting the total underwriting
discount, but before deducting expenses) received by the Company and each of the
Selling Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or any Selling Shareholder on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) 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 into account the equitable
considerations referred to above in this subsection (e). Except in the event
that the indemnified party failed to give the notice required under subsection
(d) above, the amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), 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 damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The
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Underwriters' obligations under this subsection (e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The liability of each of the Selling Shareholders under this
Section 8 shall be limited to an amount equal to the initial public offering
price less the underwriting discount of the Securities sold by such Selling
Shareholder to the Underwriters.
(g) The obligations of the Company and each of the Selling Shareholders
under this Section 8 shall be in addition to any liability which the Company and
such Selling Shareholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
9. DEFAULT OF UNDERWRITERS.
(a) If any Underwriter shall default in its obligation to purchase the
Securities that it has agreed to purchase hereunder at a Delivery Date, you may
in your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company and the Selling Shareholders shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to you to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
Securities, or the Company and the Selling Shareholders notify you that they
have so arranged for the purchase of such Securities, you or the Company and the
Selling Shareholders shall have the right to postpone such Delivery Date for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion, exercised in consultation with Hunton & Xxxxxxxx, may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Securities that remains unpurchased does not exceed one-eleventh
of the aggregate number of all the Securities to be purchased at such Delivery
Date, then the Company and the Selling Shareholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Securities
that such Underwriter agreed to purchase hereunder at such Delivery Date and, in
addition, to require each non-defaulting Underwriter to purchase its PRO RATA
share (based on the number of Securities that such Underwriter agreed to
purchase hereunder at such Delivery Date) of the
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share of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Securities that remains unpurchased exceeds one-eleventh of the
aggregate number of all the Securities to be purchased at such Delivery Date, or
if the Company and the Selling Shareholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase and of the Selling Shareholders to sell the Optional
Securities) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriters or the Company and the Selling Shareholders, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, each of the Selling Shareholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriters or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company or each
of the Selling Shareholders, and shall survive delivery of and payment for the
Securities.
11. TERMINATION AND PAYMENT OF EXPENSES.
If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor any of the Selling Shareholders shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but if for any other reason any Securities are not delivered by or on
behalf of the Company or any of the Selling Shareholders as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
the Securities not so delivered, but neither the Company nor any of the Selling
Shareholders shall then be under further liability to any Underwriter except as
provided in Section 6 and Section 8 hereof.
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12. NOTICES.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
reliable courier, first-class mail, telex or facsimile transmission to Wheat,
First Securities, Inc., at Riverfront Plaza, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Finance Department (telecopier number (804)
782-3440); if to any of the Selling Shareholders or the Company shall be
sufficient in all respects if delivered or sent by reliable courier, first-class
mail, telex, or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxxxxxx X. Xxxxx (telecopier number
(000) 000-0000, with a copy (which shall not constitute notice) to Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.A., 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx (telecopier number (000) 000-0000);
PROVIDED, HOWEVER, that any notice to any Underwriter pursuant to Section 8
hereof shall be delivered or sent by reliable courier, first-class mail, telex
or facsimile transmission to such Underwriter at its address set forth in the
Underwriters' Questionnaire, which address will be supplied to the Company or
the Selling Shareholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. SUCCESSORS.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, each of the Selling Shareholders and the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each of the Selling Shareholders and each person who controls
the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. TIME OF THE ESSENCE.
Time shall be of the essence in this Agreement.
15. BUSINESS DAY.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
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16. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the
State of New York.
17. CAPTIONS.
The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.
18. COUNTERPARTS.
This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
-22-
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters and the Company. It is understood that your
acceptance of this Agreement on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement Among Underwriters, the form
of which will be submitted to the Company and each of the Selling Shareholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
XXXX, INC.
By:
Xxxxxx X. Xxxx, III
Chairman of the Board and
Chief Executive Officer
THE XXXXXX X. XXXX, XX. FAMILY TRUST
FOR THE BENEFIT OF XXXXXX XXXX XXXXXX
UNDER AN AGREEMENT DATED OCTOBER 31,
1978
By:
Name: Xxxxxx X. Xxxx, III
Title: Trustee
THE XXXXXX X. XXXX, XX. FAMILY TRUST
FOR THE BENEFIT OF XXXXX X. XXXX UNDER
AN AGREEMENT DATED OCTOBER 31, 1978
By:
Name: Xxxxxx X. Xxxx, III
Title: Trustee
Accepted as of the date hereof
at Richmond, Virginia:
WHEAT, FIRST SECURITIES, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
Representatives of the Underwriters
By: WHEAT, FIRST SECURITIES, INC.
By:
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
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SCHEDULE I
Optional Securities
to be Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
Wheat, First Securities, Inc............ __________ __________
Xxxxxxx Xxxxx & Associates, Inc......... __________ __________
TOTAL 1,600,000 240,000
========= =======
SCHEDULE II
Number of Optional
Total Number of Firm Securities to be
Securities Sold if Maximum
to be Sold Option Exercised
The Company......................................... 1,200,000 --
The Selling Shareholders:
The Xxxxxx X. Xxxx, Xx. Family
Trust for the Benefit of Xxxxxx Xxxx
Xxxxxx under an Agreement dated
October 31, 1978...................... 200,000 120,000
The Xxxxxx X. Xxxx, Xx. Family
Trust for the Benefit of Xxxxx X.
Xxxx under an Agreement dated
October 31, 1978...................... 200,000 120,000
TOTAL 1,600,000 240,000
========= =======
SCHEDULE III
SUBSIDIARIES OF XXXX INC.
State or Country
NAME OF SUBSIDIARY of Incorporation
Guilford Printers, Inc. North Carolina
Culp International, Inc. Virgin Islands
3096726 Canada Inc. Canada
Rayonese Textile Inc. Canada
