____________SHARES(1)
XXXXXX OUTDOOR ADVERTISING & TRAVEL
CENTERS INCORPORATED
COMMON STOCK
UNDERWRITING AGREEMENT
__________1996
HD XXXXX & CO., INC.
As Representative of the
Several Underwriters
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Xxxxxx Outdoor Advertising & Travel Centers Incorporated, a
Nevada corporation (the "Company"), proposes, subject to the terms and
conditions of this Underwriting Agreement (this "Agreement"), to sell to you
(the "Representative") and the other underwriters listed on Schedule A hereto
(the "Underwriters"), for whom you are acting as Representative, an aggregate of
_______________ shares (the "Firm Shares") of the Company's Common Stock, $.001
par value per share (the "Common Stock"), in the respective amounts set forth
opposite the Underwriters' names in Schedule A hereto. The Company also proposes
to grant to the Underwriters (or, at your option, to you individually and not in
your capacity as Representative) an option (the "Overallotment Option") to
purchase up to an aggregate of ____________ additional shares of Common Stock of
the Company (the "Option Shares") on the terms and conditions set forth below.
The Firm Shares and the Option Shares are herein collectively called the
"Stock". Unless the context otherwise requires, references herein to the
"Company" include Xxxxxx Outdoor Advertising & Travel Centers Incorporated
together with its subsidiaries described in the Prospectus (hereinafter
defined).
The Company further agrees to sell to you, individually and
not in your capacity as Representative, a five-year option to purchase (the
"Purchase Option"), at a purchase price per share equal to 120% of the initial
public offering price of the Firm Shares, an aggregate of eight
________________________
(1)Plus an option to purchase up to 217,500 [15% of the Firm Shares]
additional shares from the Company to cover over-allotments.
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and one-half percent (8.5%) of the number of Firm Shares sold hereunder (the
"Purchase Option Stock").
The following terms, when used in this Agreement, shall have
the meanings indicated: "Commission" means the Securities and Exchange
Commission. "Effective Date" means each date that the Registration Statement or
any post-effective amendment or amendments to the Registration Statement became
or become effective. "Exchange Act" means the Securities Exchange Act of 1934,
as amended. "Execution Time" means the date and time that this Agreement is
executed and delivered by the parties hereto. "Preliminary Prospectus" means any
preliminary prospectus referred to in Section 1(a) below with respect to the
offering of the Stock, and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information
(as defined below). "Prospectus" means the final prospectus containing the Rule
430A Information. "Registration Statement" means the registration statement
referred to in Section 1(a) below, including exhibits and financial statements
and schedules, in the form in which it has or shall become effective and, if any
post-effective amendment thereto becomes effective before any Closing Date (as
defined in Section 3), shall also mean such registration statement as so amended
on such date. Each of the terms "Preliminary Prospectus", "Prospectus" and
"Registration Statement" also includes documents incorporated therein by
reference. Such terms shall also include Rule 430A Information deemed to be
included therein at the Effective Date, as provided by Rule 430A. "Rule 424" and
"Rule 430A" refer to such rules under the Securities Act of 1933, as amended
(the "Securities Act"). "Rule 430A Information" means information with respect
to the Stock and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A. "Rules"
means the Rules and Regulations of the Commission.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for the use of Form
SB-2 under the Securities Act, and has filed with the Commission a
Registration Statement, including related preliminary prospectuses, on
Form SB-2 (No. 333-12957) for the registration of the Stock under the
Securities Act. The Company may have filed one or more amendments to
the Registration Statement, including the related Preliminary
Prospectuses, each of which has previously been furnished to you. The
Company will next file with the Commission either, before effectiveness
of the Registration Statement, a further amendment thereto (including
the forms of final prospectuses) or, after effectiveness of the
Registration Statement, final prospectuses in accordance with Rules
430A and 424(b)(1) or (4). As filed, such amendment and forms of final
prospectuses, or such final prospectuses, shall include all Rule 430A
Information and, except to the extent you agree in writing to a
modification shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional
information and other
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changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you in writing, prior to the Execution Time,
will be included or made therein.
(b) Each Preliminary Prospectus, when filed, complied and
conformed in all material respects with the applicable requirements of
the Securities Act and the Rules and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Commission has not issued any order
suspending or preventing the use of any Preliminary Prospectus. On the
Effective Date, the Registration Statement did or will, and when the
Prospectus is first filed (if required) in accordance with Rule 424(b),
and on each Closing Date, the Prospectus (and any supplements thereto)
will, comply and conform in all material respects with the applicable
requirements of the Securities Act and the Rules; on the Effective Date
and each Closing Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on each
Closing Date, the Prospectus (and any supplements thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to statements in or omissions from the information
included under the caption "Underwriting" in the Prospectus made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter, directly or through
you, specifically for inclusion in the Registration Statement (which,
without limitation of the foregoing, specifically excludes the last
paragraph of "Underwriting").
(c) The accountants whose report appears in or is
incorporated by reference into the Prospectus are independent
accountants as required by the Securities Act and the Rules. The
financial statements and schedules (including the related notes)
included in the Registration Statement, any Preliminary Prospectus or
the Prospectus, present fairly the financial condition, results of the
operations and cash flows of the entities purported to be shown thereby
at the dates and for the periods indicated and have been prepared in
accordance with the Rules and generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, and all
adjustments thereto necessary for a fair presentation of the results
for such periods have been made. The financial and other information of
the Company set forth in the Prospectus under the captions
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"Summary Consolidated Financial and Operating Data", "Dilution",
"Capitalization", "Selected Consolidated Financial Data", and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" fairly present, on the basis stated in the
Prospectus, the information included therein.
(d) The Company and each of its subsidiaries (the
"Subsidiaries") have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, with full power and authority
(corporate and other) to own or lease their respective properties and
conduct their businesses as described in the Prospectus, and are duly
qualified to do business and are in good standing in each jurisdiction
in which such qualification is required except for such jurisdictions
in which the failure to so qualify would not have a material adverse
effect on the business, results of operations, prospects, condition
(financial or otherwise) or assets or properties of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) The capitalization of the Company as of
________________, 1996 is as set forth under the caption
"Capitalization" in the Prospectus, and the Common Stock conforms to
the description thereof contained under the caption "Description of
Securities" in the Prospectus. The Overallotment Option and the
Purchase Option conform in all respects to statements with respect
thereto contained in the Registration Statement and the Prospectus. The
outstanding shares of Common Stock have been, the Stock (upon delivery
and payment therefor in the manner described in this Agreement) will
be, and the Purchase Option Stock (when issued pursuant to the Purchase
Option) will be, duly authorized, validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof, and none of the shares of Common Stock have been and neither
the Stock nor the Purchase Option Stock will be issued in violation of
any preemptive or similar rights. There are no preemptive rights,
rights of first refusal or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares
of Common Stock pursuant to the Company's Articles of Incorporation,
Bylaws or other governing documents or any agreement or other
instrument to which the Company is a party or by which it or any of its
properties may be bound. Except as disclosed in the Registration
Statement and the Prospectus and as otherwise previously approved by
you with respect to options granted pursuant to the Company's 1996
Stock Option Plan, there are no outstanding rights, warrants or options
to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of the Company as such relate to the
authorized but unissued shares of capital stock of the Company and the
shares of Common Stock held by the officers and directors of the
Company. All outstanding options granted pursuant to the Company's 1996
Stock Option Plan were granted with exercise prices no less than the
initial offering price to the public of the Stock. All of the
outstanding
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shares of capital stock of each Subsidiary are owned directly or
indirectly by the Company, free and clear of any claim, lien,
encumbrance or security interest.
(f) No holder of any security of the Company has the
right to have any security owned thereby included in the Registration
Statement, or to demand registration of any security owned thereby,
during the period ending 180 days after the date of this Agreement.
Each director, officer, and existing five percent (5%) stockholder of
the Company has delivered to the Representative such person's
enforceable written agreement that such person will not, for a period
of 180 days after the date of this Agreement, transfer or otherwise
dispose of, or offer or contract to sell (including, without
limitation, a short sale or a sale against the box), offer or otherwise
dispose of, directly or indirectly (except for transfers during such
person's lifetime, or on death or by will or intestacy, to his or her
immediate family or to a family trust; provided that such transferee
shall agree in writing to the restrictions on transfer referred to in
such agreement), whether pursuant to Rule 144, Rule 144A or Regulation
S of the Commission under the Securities Act or otherwise, any Common
Stock or any rights to purchase or acquire Common Stock or any
securities convertible into or exchangeable for Common Stock, without
your prior written consent.
(g) Except as disclosed in the Registration Statement and
the Prospectus, since the most recent date as of which information is
given in the Registration Statement and the Prospectus, (A) neither the
Company nor any of the Subsidiaries have incurred any liability or
obligation, direct or contingent, other than in the ordinary course of
business or entered into any transactions which, individually or in the
aggregate, is material to the Company and the Subsidiaries, taken as a
whole; (B) there has not been any change in the capital stock of the
Company, including but not limited to, any payment or declaration of
any dividends or any other distribution with respect to any shares of
the capital stock of the Company; and (C) there has not been any
material adverse change in the business, results of operations,
prospects, condition (financial or otherwise) or material assets or
properties of the Company and the Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business and whether or not covered by insurance.
(h) Neither the Company nor any of the Subsidiaries is,
nor with the giving of notice or lapse of time or both would be, in
violation of or in default under, nor will the execution or delivery
hereof or consummation of the transactions contemplated pursuant to
this Agreement and the Purchase Option result in a violation of, or
constitute a default under, or cause acceleration or give any party the
right to cause acceleration of the Company's obligations under its
Articles of Incorporation, Bylaws or other governing documents, or any
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agreement, indenture or other instrument to which the Company or any of
the Subsidiaries is a party or by which it is bound, or to which any of
their properties is subject, nor will the performance by the Company of
its obligations pursuant to this Agreement and the Purchase Option
(assuming compliance with all applicable state securities and Blue Sky
laws) violate any law, rule, administrative regulation or decree of any
court, or any governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective
properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company
or any of the Subsidiaries. Except for permits and similar
authorizations required under the Securities Act and the securities or
Blue Sky laws of certain jurisdictions (such permits and authorizations
having been obtained), no consent, approval, authorization or order of
any court, governmental agency or body, financial institution or other
person or entity is required in connection with the consummation of the
transactions contemplated pursuant to this Agreement and the Purchase
Option. Neither the Company nor any of the Subsidiaries is in violation
of, or in default with respect to, any law, rule, regulation, writ,
order, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, the violation of or
default with respect to which, individually or in the aggregate, would
have a Material Adverse Effect.
(i) The descriptions in the Registration Statement and
the Prospectus of material contracts and other documents are accurate
in all material respects and present fairly the information required to
be disclosed under the Rules, and there are no contracts or other
documents required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
under the Securities Act or the Rules which have not been so described
or filed as required. Each material contract or other instrument
(however characterized or described) to which the Company is a party or
by which its property or business is or may be bound or affected and to
which reference is made in the Prospectus has been duly and validly
executed by the Company, is in full force and effect in all material
respects and is enforceable against the parties thereto in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies; none of such contracts or
instruments has been assigned by the Company and neither the Company
nor, to the best knowledge of the Company, any other party is in
default thereunder, which default would have a Material Adverse Effect,
and, to the best knowledge of the Company, no event has occurred which,
with the lapse of time or the giving of notice, or both, would
constitute a default thereunder, which would have a Material Adverse
Effect. None of the provisions of such contracts or instruments
violates any existing applicable law, rule, regulation, judgment, order
or decree of any governmental agency or court having jurisdiction over
the
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Company or any of its assets or business, which violation would have a
Material Adverse Effect.
(j) The Company has filed all federal, state, local and
foreign tax returns that are required to be filed or has received valid
extensions with respect thereto and has paid all taxes and all
assessments to the extent that the same have become due. No tax
assessment or deficiency has been made or proposed against the Company,
nor has the Company received any notice of any proposed assessment or
deficiency. The charges, accruals and reserves shown in the financial
statements included in the Registration Statement and the Prospectus in
respect of taxes for all fiscal periods to date are adequate based on
current law. There is no unpaid assessment or proposal by any taxing
authority for additional taxes for which the Company does not have
adequate reserves for any fiscal year referenced in the Registration
Statement and Prospectus.
(k) With such exceptions as would not have a Material
Adverse Effect, (A) the Company and each of the Subsidiaries are in
compliance with all applicable federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants and there are no circumstances currently existing or
reasonably foreseeable that may prevent or interfere with such
compliance, and (B) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any
chemical, pollutants, contaminants, wastes, toxic substances, petroleum
or petroleum products, that would result in the imposition of liability
on the Company or any Subsidiary.
(l) Except as disclosed in the Registration Statement and
the Prospectus, there is no litigation, arbitration, action, suit,
proceeding or investigation before or by any court or by any public,
regulatory or governmental agency, body or board, domestic or foreign,
pending or, to the Company's knowledge, threatened or contemplated
against, or involving the assets, properties or business of or
otherwise affecting, the Company or any of the Subsidiaries which (A)
if adversely determined, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, or (B)
might prevent the consummation of the transactions contemplated by this
Agreement. The aggregate of all pending legal, governmental and
regulatory proceedings to which the Company or any Subsidiary is a
party or which affect any of its properties and which are not described
in the Registration Statement and the Prospectus, including, without
limitation, ordinary routine litigation incidental to the business of
the Company or any Subsidiary, could not reasonably be expected to have
a Material Adverse Effect.
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(m) The Company and each of the Subsidiaries hold all
consents, authorizations, approvals, orders, certificates, licenses and
permits of and from, and have made all declarations and filings with,
all federal, state, local and other governmental authorities,
self-regulatory organizations and courts and other tribunals, necessary
to own, lease, license and use their respective properties and assets
and to conduct their respective businesses in the manner described in
the Prospectus, except to the extent that the failure to obtain or file
the same would not have a Material Adverse Effect.
(n) The Company and each of the Subsidiaries own or
possess adequate licenses or other rights to use all patents,
copyrights, trademarks, service marks, trade names, and applications
therefor, and other know-how, proprietary knowledge, and similar
intellectual property (collectively, "Intangibles") necessary for the
conduct of their respective businesses, and as described in the
Registration Statement and the Prospectus. Neither the Company nor any
Subsidiary has received any notice of infringement or conflict with (or
knows of any infringement or conflict with) the asserted rights of
others with respect to the Intangibles nor is it aware of any
infringement by others of the Intangibles.
(o) The Company and each of the Subsidiaries have good
and marketable title in fee simple to all items of real property and
good and valid title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except as
are disclosed in the Registration Statement and the Prospectus or as do
not materially affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the
Company or any of the Subsidiaries. Any real property or buildings held
under lease by the Company or any of the Subsidiaries are held by it
under valid, existing and enforceable leases.
(p) The Company and each of the Subsidiaries have
insurance or indemnity agreements of the types and in the amounts
adequate for their businesses and consistent with insurance or
indemnity coverage maintained by companies of similar size and engaged
in similar businesses, including, but not limited to, general liability
insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against.
(q) No Subsidiary is prohibited, directly or indirectly,
from paying any dividend to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company any loan or advances to such Subsidiary from the Company, or
from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary, except as described in the Prospectus.
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(r) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company.
(s) The Stock is authorized for listing on the Nasdaq
National Market System ("NMS") upon official notice of issuance.
(t) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the Purchase Option. This Agreement
has been duly authorized, executed and delivered by the Company and
constitutes, and the Purchase Option has been duly authorized and when
executed and delivered as contemplated herein will constitute, valid
and binding agreements of the Company, each enforceable against the
Company in accordance with its terms. The Registration Statement and
the filing of the Registration Statement with the Commission have been
duly authorized by and on behalf of the Company, and the Registration
Statement has been duly executed pursuant to such authorization by and
on behalf of the Company.
(u) Except as contemplated by this Agreement or as
disclosed in the Prospectus, no person has the right to any payment
(including, without limitation, any payment in the nature of a finder's
fee) in connection with the sale of the Stock resulting from any acts
of the Company.
(v) Except as disclosed in the Registration Statement
and the Prospectus, no transaction has occurred between or among the
Company or any of the Subsidiaries, on the one hand, and any of its
officers or directors or any affiliate or affiliates of any such
officer or director, on the other hand, that is required to be so
disclosed, including, but not limited to, any outstanding loans,
advances or guaranties of indebtedness by the Company to or for the
benefit of any affiliates of the Company or any of the Subsidiaries, or
any of the officers or directors of the Company, or any family member
of any of them. Except for the loans disclosed in Note (6) to the
Consolidated Financial Statements, any and all such loans shall be paid
off as of the Closing Date for the Firm Shares.
(w) Neither the Company nor any officers, directors,
employees or agents acting on behalf of the Company has at any time
during the last five (5) years (A) made any contributions to any
candidate for political office in violation of law, or failed to
disclose fully any contributions to any candidate for political office
in accordance with any applicable statue, rule, regulation or ordinance
requiring such disclosure, (B) made any payment to any local, state,
federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or allowed by
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applicable law, (C) made any payment outside the ordinary course of
business to any purchasing or selling agent or person charged with
similar duties of any entity to which the Company sells or from which
the Company or any of the Subsidiaries buys products for the purpose of
influencing such agent or person to buy products from or sell products
to the Company, or (D) engaged in any transaction, maintained any bank
account or used any corporate funds except for transactions, bank
accounts and funds which have been and are reflected in the normally
maintained books and records of the Company. No director or officer has
been or is subject to any legal proceeding or limitation described in
Regulation ss. 228.401 promulgated under the Exchange Act and required
to be disclosed in the Registration Statement pursuant thereto which
has not been so disclosed.
(x) The Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to reasonably ensure
that (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded as
necessary in order the permit preparation of financial statements in
accordance with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) All letters, filings or applications delivered or to
be delivered by the Company or any of its directors or officers to the
Commission or any state securities law administrator in connection
with the issuance and sale of the Stock were, on the dates on which
they were delivered, and will be, on the dates on which they are to be
delivered, true, complete and correct in all material respects.
(z) Any certificates signed by an officer of the Company
and delivered to the Underwriters or to counsel for the Underwriters
shall also be deemed a representation and warranty of the Company to
the Underwriters as to the matters covered thereby as of the date of
such certificate. Any certificate delivered by the Company to its
counsel for purposes of enabling such counsel to render the opinions
referred to in Section 6(g) will also be furnished to the Underwriters
and counsel for the Underwriters and shall be deemed to be additional
representations and warranties by the Company to the Underwriters as to
the matters covered thereby as of the date of such certificate.
2. Purchase and Sale of Securities.
(a) On the basis of the representations, warranties,
covenants and agreements contained in this Agreement, but subject to
the terms and conditions herein set forth, the Company agrees to sell
to the Underwriters, and each
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Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $ _______[reflecting a 7% Gross
Discount] per share (the "Initial Price"), the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule A hereto.
(b) In addition, upon written notice from you to the
Company not more than thirty (30) days after the date of the
Prospectus, and on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the several
Underwriters and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Option Shares specified in such
notice at the purchase price per share set forth in Section 2(a) in the
same proportion as the number of Firm Shares set forth opposite such
Underwriter's name in Schedule A hereto bears to the total number of
Firm Shares (subject to adjustment by you to eliminate fractions). The
Option Shares may be purchased by the Underwriters only for the purpose
of covering over-allotments made in connection with the sale of the
Firm Shares. No Option Shares shall be sold or delivered unless the
Firm Shares previously have been, or simultaneously are, sold and
delivered. The right to purchase the Option Shares or any portion
thereof may be surrendered and terminated at any time upon notice by
you to the Company.
(c) On the basis of the representations, warranties,
covenants and agreements contained in this Agreement, but subject to
the terms and conditions herein set forth, the Company agrees to sell
to you for an aggregate price of $100.00 (for your own account and not
as Representative of the several Underwriters), on the First Closing
Date, an option to purchase up to 123,250 shares of Common Stock at a
price per share equal to 120% of the initial offering price to the
public (referred to herein as the "Purchase Option").
(d) The Purchase Option will be exercisable at any time
and from time to time on or after the first anniversary of the date of
this Agreement up to the fifth anniversary hereof. Each Purchase Option
shall be substantially identical to the form of Purchase Option filed
as an exhibit to the Registration Statement.
3. Delivery of and Payment for Stock.
(a) Delivery by the Company of the Firm Shares to you for
the respective accounts of the Underwriters and payment for the Firm
Shares shall be made at 7:00 am., Arizona time, on the third (3rd) full
business day following the first date that Stock is traded (unless
postponed pursuant to Sections 8 or 9 hereof), such time and date of
delivery being referred to herein as the "First Closing Date", at the
offices of HD Xxxxx & Co., Inc., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000 or such other place as may be agreed upon among
the
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Representative and the Company. Payment of the purchase price for the
Firm Shares shall be by certified or official bank check or checks or
wire transfer payable to the Company in next day funds. If the
Representative so elects, delivery of the Firm Shares may be made by
credit through full fast transfer to the accounts at The Depositary
Trust Company designated by the Representative.
(b) In the event the Overallotment Option is exercised,
delivery by the Company of the Option Shares to you for the respective
accounts of the Underwriters and payment for the Option Shares shall be
made at the offices of HD Xxxxx & Co., Inc. specified in paragraph (a)
of Section 3 at the time and on the date (which may be the same date
as, but in no event shall be earlier than, the First Closing Date) set
forth in the notice referred to in Section 2(b) hereof (such time and
date of delivery being referred to herein as the "Second Closing Date")
or such other place as may be agreed upon among the Representative and
the Company. Payment of the purchase price for the Option Shares shall
be by certified or official bank check or checks or wire transfer
payable to the Company in next day funds. The First Closing Date and
the Second Closing Date are collectively referred to herein as the
"Closing Date."
(c) Certificates evidencing the Stock shall be registered
in such names and shall be in such denominations as you shall request
at least two full business days prior to the First Closing Date or, in
the case of Option Shares, prior to the Second Closing Date and shall
be made available to you for checking and packaging, at such place as
is designated by you, not later than 9:30 a.m. on the business day
immediately preceding the First Closing Date or, in the case of Option
Shares, the Second Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Stock for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with
each Underwriter that:
(a) The Company will use its best efforts to cause the
Registration Statement, and any amendment thereof, if not effective at
the Execution Time, to become effective as promptly as possible. If the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will file the Prospectus, properly completed,
pursuant to Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such timely filing. The Company
will promptly advise you (i) when the Registration Statement shall have
become effective, (ii) when any amendment thereof shall have become
effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration
-12-
Statement or the Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Stock for sale in any jurisdiction or the
initiation or threatening of such stop order or suspension and, if
issued, to obtain as soon as possible its withdrawal. The Company will
not file any amendment to the Registration Statement or supplement to
the Prospectus without your prior consent, provided that such consent
shall not be unreasonably withheld. The Company will prepare and file
with the Commission, promptly upon your request, any amendment to the
Registration Statement or supplement to the Prospectus that may be
necessary or advisable in connection with the distribution of the Stock
by you, and use its best efforts to cause the same to become effective
as promptly as possible.
(b) The Company shall, during the period of time when a
prospectus relating to the Stock is required to be delivered under the
Securities Act and the Rules, comply with all requirements imposed by
the Securities Act and the Rules so far as is necessary to permit the
continuance of sales of or dealings in the Stock in accordance with the
provisions hereof and of the Prospectus. The Company consents to the
use of the Prospectus or any amendment or supplement thereto by the
several Underwriters and by all dealers to whom the Stock may be sold,
both in connection with the offering or sale of the Stock and for such
period of time thereafter as the Prospectus is required by law to be
delivered in connection therewith. If during such period of time any
event shall occur as a result of which, in the opinion of counsel to
the Company or counsel to the Underwriters, the Prospectus as then
amended or supplemented includes any untrue statement of a material
fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if, in the opinion of counsel to the
Company or counsel to the Underwriters, it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or the
Rules or any other applicable law, the Company shall so notify you
promptly and, at its expense, forthwith prepare and duly file with the
Commission an appropriate amendment or supplement to the Prospectus (in
form and substance reasonably satisfactory to you and counsel to the
Underwriters) which shall correct such statement or omission or which
shall effect such compliance, and the Company shall use its best
efforts to have any such amendment or supplement declared effective as
soon as possible.
(c) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its security holders in the manner contemplated by Rule
158(b) of the Securities Act an earnings statement (which need not be
audited) covering a period of at least 12 months
-13-
beginning after the Effective Date complying with the provisions of
Section 11(a) of the Securities Act. For purposes of the preceding
sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes the
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(d) The Company will furnish to you copies of the
Registration Statement (two of which will be signed and will include
all exhibits), each Preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as you reasonably request.
(e) The Company will cooperate with the Underwriters and
counsel to the Underwriters to arrange for the qualification of the
Stock for sale under the laws of such jurisdictions as you designate
and will continue such qualifications in effect so long as required for
the distribution of the Stock, except that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process or to subject itself to
taxation for doing business in any jurisdiction.
(f) The Company will cause the Stock to be listed on the
NMS and will comply with all registration, filing and reporting
requirements of the Exchange Act and the NMS that may from time to time
apply to the Company. The Company will use its best efforts to keep the
Stock listed on the NMS for not less than five (5) years, provided,
that such listing shall not be required if the Stock is listed on the
American Stock Exchange or the New York Stock Exchange.
(g) The Company (i) will apply net proceeds from the
offering received by it in the manner set forth under "Use of Proceeds"
in the Prospectus, subject to the qualifications set forth therein, and
in no event shall any proceeds be used to repay any indebtedness to any
officer, director or five (5%) shareholder, or affiliate thereof, and
(ii) will file Form SR in conformity with the requirements of the
Securities Act and the Rules.
(h) The Company shall not file any amendment or
supplement to the Registration Statement or Prospectus at any time
prior to, or during the period ending on the date one year after, the
effective date of the Registration Statement, unless such filing shall
comply with the Securities Act and unless you shall previously have
been advised of such filing and furnished a copy thereof and you
-14-
and counsel to the Underwriters shall not have objected to such filing
within five business days of receipt thereof.
(i) Until five years after the date of this Agreement,
the Company will furnish to you and, upon request, to each of the other
Underwriters, without charge, as soon as available, (i) copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock, (ii) copies of each annual or other
report it shall be required to file with the Commission (including the
Report on Form SR required by Rule 463 of the Rules), and (iii) from
time to time, such other information concerning the Company as you, or
such other Underwriters, may reasonably request.
(j) Whether or not this Agreement becomes effective or is
terminated or the sale of the Stock to the Underwriters is consummated,
the Company shall pay or cause to be paid (A) all costs and expenses
(including stock transfer taxes) incurred in connection with the
delivery to the several Underwriters of the Stock and the Purchase
Option Stock, (B) all fees, costs and expenses including, without
limitation, fees and expenses of the Company's accountants and counsel
in connection with the preparation, printing, filing, delivery and
shipping of the Registration Statement (including the financial
statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus as amended or supplemented and the printing,
delivery and shipping of this Agreement and other underwriting
documents, including Underwriters' Questionnaires, Underwriters' Power
of Attorney, Blue Sky Memoranda, Agreements Among Underwriters and
Selected Dealer Agreements and any letters transmitting the offering
material to selling group members (including costs of mailing and
shipment), (C) all costs, filing fees, and expenses in connection with
the registration or qualification of the Stock for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred
to in Section 5(e) herein, including the fees and disbursements of
counsel to the Underwriters not to exceed $25,000 in connection with
such registration and qualification and the preparation, printing,
distribution and shipment of preliminary, supplementary and final Blue
Sky Memoranda, (D) the filing fee of the National Association of
Securities Dealers, Inc. ("NASD") and the fees and disbursements of
counsel to the Underwriters in connection with and clearance of the
offering of Stock with the NASD, (E) any applicable NMS listing fees,
(F) the cost of printing certificates representing the Stock and the
Purchase Option Stock, (G) the cost and charges of any transfer agent
or registrar, (H) the costs of furnishing (including costs of shipping
and mailing) to you and to the Underwriters of copies of all reports
and information required by Section 5(i) hereof, (I) costs of inclusion
of the Stock for quotation on the NMS, (J) tombstone advertising costs,
(K) all transfer taxes, if any, with respect to the sale and delivery
of the Stock and the Purchase Option Stock by the Company to the
Underwriters, (L) all
-15-
costs associated with the Company's marketing of the Stock, including
any presentation, travel, slides, hotel, charges for meeting rooms
relating to the road show, and other costs of the Company in connection
with the offering, (M) the cost of preparing bound volumes of the
documents relating to the public offering of Common Stock contemplated
hereby, and (N) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise
specifically provided for in this Section.
(k) In addition to its other obligations under Section
5(j) hereof, the Company will pay to you, individually and not in your
capacity as Representative, a nonaccountable expense allowance equal to
one-quarter of one percent (.25%) of the initial public offering price
of the Stock to the public. The nonaccountable expense allowance with
respect to the Firm Shares shall be paid to you on the Closing Date and
the nonaccountable expense allowance with respect to the Option Shares
shall be paid to you on the closing of the sale to you of such Option
Shares. The Company has previously paid to you a fee of $10,000 (the
"Deposit") which shall be credited to this nonaccountable expense
allowance. If the sale of the Stock is not completed for any reason,
including your failure to complete the offering contemplated by this
Agreement (except if the Company prevents such completion or if your
failure to complete the offering is the result of the breach by the
Company of any representation, warranty, covenant or agreement
contained in this Agreement), you agree to return the Deposit, less
actual out-of-pocket expenses incurred. If the offering is not
completed because the Company prevents such completion or because of a
breach by the Company of any representations, warranties, covenants or
agreements in this Agreement, upon your delivery to the Company or the
Company's delivery to you of a notice of termination of the offering
contemplated by this Agreement, you shall retain the Deposit, and in
addition, the Company shall pay you for any and all of your expenses,
including legal fees (not to exceed $40,000) incurred in connection
with the offering.
(l) In addition to its other obligations under Section
7(a) hereof, the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 7(a) hereof, it will reimburse the
Underwriters on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company's obligation to reimburse
the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the
Underwriters shall promptly return such payment to the Company.
-16-
(m) So long as the Company's Common Stock is registered
under the Exchange Act, the Company will maintain a transfer agent and,
if necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for its
Common Stock.
(n) For at least five years after the date of this
Agreement, the Company will use its best efforts to maintain insurance
of the types and in the amounts that it deems adequate for its business
and consistent with insurance coverage maintained by companies of
similar size and engaged in similar businesses, including, but not
limited to, general liability insurance covering all real and personal
property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against.
(o) For a period of six (6) months following the
Effective Time, the Company will not register under the Securities Act,
offer, sell, contract to sell or otherwise dispose of any additional
shares of its Common Stock or any security convertible into or
exchangeable for its Common Stock without your prior written consent,
except issuances by the Company pursuant to the exercise of stock
options granted under the 1996 Stock Option Plan described in the
Prospectus. For a period of one year following the Effective Time, the
Company will not adopt any new stock-based plan or compensation
arrangements or increase the number of shares available for issuance
under its 1996 Stock Option Plan, except with your prior written
consent.
(p) The Company agrees that you (for your own account and
not as the Representative of the several Underwriters) shall have for a
period of two (2) years from the Effective Date the right to purchase
for your account or to sell for the account of the Company, its
Subsidiaries or any of the Company's executive officers and directors
or five percent (5%) stockholders (collectively, the "Affiliates") any
securities with respect to which the Company or any of the Affiliates
may seek a public offering of the Company's securities pursuant to a
registration under the Securities Act or otherwise (including a sale
pursuant to Rule 144 of the Securities Act) or a private offering of
the Company's securities. The Company and the Affiliates will consult
with you with regard to any such offering and will offer you
exclusively the opportunity to purchase, sell, or act as underwriter or
placement agent for the purchase or sale of any such securities on
terms no less favorable to the Company or the Affiliates, as the case
may be, than they can secure elsewhere. If you fail to accept in
writing such proposal for the financing made by the Company or the
Affiliates, as the case may be, within twenty (20) business days (two
(2) business days with respect to proposed sales under Rule 144) after
receipt of a notice containing such proposal, then you shall have no
further claim or right with respect to the financing proposal contained
in such notice. If, thereafter, such proposal is modified in any
material respect, the
-17-
Company or the Affiliates, as the case may be, shall adopt the same
procedure as with respect to the original proposal. If you do not avail
yourself of such opportunity to act as underwriter or placement agent,
you will forfeit any preferential rights for future financings. The
Company and the Affiliates acknowledge that violation of the rights set
forth in this Section 5(p) would cause irreparable harm to you, and
agree that you shall be entitled to injunctive relief to prevent any
violation of the provisions of this Section 5(p). The Company
represents and warrants that no other person or entity has any rights
to participate in any offer, sale or distribution of securities with
respect to which you shall have preferential rights except as provided
in this Section 5(p). You may exercise the right of first refusal
granted pursuant to this Section 5(p) either on your own behalf or
together with another firm or firms designated in writing by you.
(q) The Company agrees that it will use its best efforts,
including the efforts of you if offered, to obtain key person life
insurance on the lives of such persons as you may reasonably designate.
Such key person life insurance will be payable to the Company and the
Company will use its best efforts to keep such insurance in force for a
minimum of period of either three (3) years from the Effective Date of
the Registration Statement or the respective initial terms of the
employment agreements between the Company and such persons, whichever
period is longer.
(r) Commencing prior to the filing of the Registration
Statement and for at least two (2) years after the Effective Date, the
Company will maintain at least three (3) independent directors
reasonably acceptable to you on the Company's board of directors
("Board") if the Board consists of six (6) or less directors (or four
(4) such directors if the Board is comprised of seven (7) to ten (10)
directors). In the event the Board appoints committees thereof, at
least one (1) independent director shall be a member of each such
committee.
(s) If at any time during the ninety (90) day period
after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company shall occur
as a result of which in your opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to
or amendment of the Prospectus), the Company will, if reasonably
requested by you, forthwith prepare, and, if permitted by law,
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
6. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Firm Shares and the Option
Shares, as the case may be, at any Closing Date, and the other obligations of
the Underwriters hereunder will be subject
-18-
to the accuracy of the representations and warranties on the part of the
Company, both at the Execution Time and at and as of each Closing Date, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the timely performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a) The Registration Statement shall have become
effective (or, if a post-effective amendment is required to be filed
pursuant to Rule 430A under the Act, such post-effective amendment
shall have become effective) not later than 2:00 pm. Arizona time, on
the date of this Agreement or at such later date and time as you may
approve in writing, and at each Closing Date.
(b) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been made or shall
be in effect and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall
have been issued and no proceedings for the issuance of such an order
shall have been initiated or threatened by the Commission or any Blue
Sky or other securities authority of any jurisdiction, and any request
on the part of the Commission or any Blue Sky or other securities
authority of any jurisdiction for additional information (to be
included in the Registration Statement or the Prospectus or otherwise)
shall have been disclosed to you and complied with to the reasonable
satisfaction of you and counsel to the Underwriters.
(c) Neither the Registration Statement nor the Prospectus
shall contain an untrue statement of fact which is material or shall
omit to state a fact which, in your opinion, is material or is required
to be stated therein or is necessary to make the statements therein not
misleading.
(d) At the Execution Time and at each Closing Date, you
shall have received a letter, dated the date of delivery thereof, of
KPMG Peat Marwick LLP addressed to the Company and the Underwriters, in
form and substance satisfactory to you, confirming that they are
independent public accountants with respect to the Company within the
meaning of the Securities Act and the applicable published Rules and
stating in effect that:
(i) In their opinion the financial statements
and schedules examined by them and included in the
Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules;
(ii) In their opinion, the amounts under the
headings "Summary Consolidated Financial and Operating Data",
"Dilution",
-19-
"Capitalization", "Selected Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition
and Results of Operations", and "Business" included in the
Registration Statement and the Prospectus, to the extent
derived from the audited and unaudited financial statements of
the Company, agree with the corresponding amounts in the
audited and unaudited financial statements of the Company from
which such amounts were derived;
(iii) On the basis of a reading of the amounts
included in the Registration Statement and the Prospectus,
carrying out certain procedures (not constituting an
examination in accordance with generally accepted auditing
standards) consisting of a reading of the latest available
unaudited interim financial statements of the Company and
certain other information, inspection of the minutes of the
meetings of the stockholders and the Board of Directors of the
Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of
the Company as to transactions and events subsequent to the
date of the latest audited financial statements included in
the Registration Statement and the Prospectus and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention which caused them to believe
that:
A. any unaudited statement of income,
balance sheet, statement of changes in stockholders'
equity or statement of cash flows of the Company is
not in conformity with generally accepted accounting
principles applied on a basis consistent with that
for the audited financial statements as of, and for
the two (2) years ended, January 31, 1996, or that
any such unaudited statements included in the
Registration Statement and the Prospectus do not
comply in all material respects with the applicable
accounting requirements of the Securities Act, except
as permitted by the staff of the Commission;
-20-
B. any unaudited statement of income data
and balance sheet data of the Company included in the
Registration Statement and the Prospectus do not
agree with the corresponding items in the unaudited
financial statements from which such data and items
were derived, or that such unaudited data and items
were not determined on a basis substantially
consistent with the basis for the corresponding
amounts in the audited financial statements as of,
and for the two (2) years ended, January 31, 1996;
C. as of a specified date not more than five
days prior to the date of delivery of such letter,
there were any changes in the capital stock of the
Company or any increase in the current liabilities
(other than accounts payable and accrued liabilities)
or long-term debt and capital lease obligations of
the Company, or any decreases in working capital or
in net assets or stockholders' equity of the Company,
or any decreases or increases, as the case may be, in
other items specified by you, in each case as
compared with amounts shown on the Company's audited
balance sheet as of January 31, 1996 and unaudited
and pro forma balance sheets as of [July 31], 1996
included in the Registration Statement and the
Prospectus; and
D. for the period from [July 31], 1996 to a
specified date not more than five days prior to the
date of delivery of such letter, there were any
decreases in revenues or decreases in income before
income tax provisions or the total or per share
amounts of net income, or any decreases or increases,
as the case may be, in other items specified by you,
in each case as compared with comparable periods of
corresponding length, except in each case for
increases or decreases which the Registration
Statement and the Prospectus disclose have occurred
or may occur;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statement
and the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company
or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
-21-
(e) You shall have received from KPMG Peat Marwick LLP a
letter addressed to the Company and made available to you for the use
of the Underwriters stating that in planning and performing their audit
of the audited financial statements included or incorporated by
reference in the Registration Statement, they noted no matters
involving the Company's internal controls that they consider to be
material weaknesses.
(f) After the execution and delivery of this Agreement,
there shall not have occurred (i) any material loss to or interference
with the businesses or properties of the Company from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, or, in your reasonable opinion, any material adverse
change, or any development reasonably likely to result in a material
adverse change (including, without limitation, a change in management
or control of the Company) in the condition (financial or otherwise),
business, prospects, net worth or results of operations of the Company
or its subsidiaries; (ii) if trading in the Stock has been suspended by
the Commission or trading generally on the NMS, New York Stock
Exchange, Inc. or on the American Stock Exchange, Inc. has been
suspended or limited, or minimum or maximum ranges for prices of
securities shall have been fixed, or maximum ranges for prices of
securities have been required, by such exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc. or any
other governmental or regulatory authority; (iii) any banking
moratorium declared by Federal or state bank authorities; (iv) any
domestic or international event or act or occurrence that shall have
materially disrupted, or in your reasonable opinion will in the future
materially disrupt, the securities markets; (v) there shall have
occurred any new outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets
of the United States is such as to make it, in your reasonable
judgment, inadvisable or impracticable to proceed with the offering; or
(vi) there shall be such a material adverse change in the general
financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
as to make it, in your reasonable judgment, inadvisable or
impracticable to market the Stock.
(g) On each Closing Date, you shall have received an
opinion, dated such Closing Date, of Squire, Xxxxxxx & Xxxxxxx, counsel
for the Company to the effect that:
(i) The Company and each of the Subsidiaries
have been duly incorporated and each is an existing
corporation in good standing under the laws of its
jurisdiction of incorporation, each with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, and the Company and each of the
Subsidiaries is duly qualified and in good
-22-
standing as a foreign corporation in each jurisdiction in
which, to the knowledge of such counsel, the character or
location of its assets or properties (whether owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for such jurisdictions in
which the failure to so qualify would not have a Material
Adverse Effect. To the knowledge of such counsel, as of the
date of such opinion, neither the Company nor any of the
Subsidiaries has received any claim or notice from any
official authority in any jurisdiction in which the Company or
any of the Subsidiaries is not qualified to do business in the
effect that the Company or any of the Subsidiaries is required
to be so qualified;
(ii) The Company and each of the Subsidiaries
have all requisite corporate power and authority and, to the
knowledge of such counsel, all necessary Permits of and from
all public, regulatory or governmental officials and bodies
(domestic and foreign), to (A) own, lease, license and operate
their respective assets and properties and conduct their
respective businesses as now being conducted and as described
in the Registration Statement and the Prospectus, and (B)
execute and deliver this Agreement and issue the Purchase
Option, perform its obligations under this Agreement and the
Purchase Option, and issue and sell the Stock and the Purchase
Option Stock. To the knowledge of such counsel, there are no
proceedings pending or threatened, relating to the revocation
or modification of any such Permit nor, to the knowledge of
such counsel after due inquiry, has any event occurred which
allows or which, with notice or lapse of time or both, would
allow) revocation or termination of any such Permit or which
would result in any other impairment of the rights of the
holder of any such Permit;
(iii) Each of this Agreement and the Purchase
Option has been duly and validly authorized, executed and
delivered by or on behalf of the Company and (except as to
rights to indemnity for violations of federal securities laws,
as to which counsel need not express any opinion) constitutes
the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms;
subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the rights of creditors generally and the
discretion of courts in granting equitable remedies;
-23-
(iv) All of the issued and outstanding shares of
Common Stock have been, and the Firm Shares and the Option
Shares, if any, to be sold by the Company under this
Agreement, when delivered and paid for in accordance with the
terms of the Underwriting Agreement will be, duly and validly
authorized and issued and fully-paid and nonassessable, with
no personal liability attaching to the ownership thereof, and
to such counsel's knowledge, will not be issued in violation
of or subject to any preemptive rights or other rights to
subscribe for or purchase Common Stock. The authorized, issued
and outstanding capital stock of the Company conforms in all
material respects to all statements in relation thereto
contained in the Registration Statement and the Prospectus.
The form of certificate used to evidence the Stock is in due
and proper form and complies with Nevada law. The Purchase
Option Stock has been duly authorized and reserved for
issuance and, when issued and delivered in accordance with the
terms of the Purchase Option, will be duly and validly issued
and fully-paid and nonassessable, with no personal liability
attaching to the ownership thereof, and to such counsel's
knowledge, will not be issued in violation of or subject to
any preemptive rights or other rights to subscribe for or
purchase Common Stock. The Stock and Purchase Option Stock
have been approved for listing on the NMS. Except as described
in the Registration Statement and the Prospectus, there are no
preemptive rights or other rights to subscribe for or to
purchase, or any restrictions upon the voting or transfer of,
any shares of Common Stock under the Company's Articles of
Incorporation or ByLaws, any statute, rule or regulation, or,
to the knowledge of such counsel, any other agreement, permit,
judgment, decree, order or instrument to which the Company is
a party or by which the Company is bound;
(v) None of (A) the execution, delivery and
performance of this Agreement or the Purchase Option, (B) the
consummation of the transactions contemplated by this
Agreement or the Purchase Option, including, without
limitation, the issuance, sale and delivery of the Firm
Shares, Option Shares or Purchase Option Stock, if any, to be
sold by the Company or (C) compliance with the terms and
provisions of this Agreement and the Purchase Option will (1)
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) or require consent or waiver under, or result in the
creation or imposition of
-24-
any lien, charge, encumbrance, security interest, claim or
other restriction of any nature whatsoever upon any property
or assets of the Company, pursuant to the terms of any
indenture, mortgage, deed of trust, note or other agreement,
instrument or Permit of which such counsel is aware and to
which the Company is party or by which the Company or any of
its properties, assets or business thereof may be bound or (2)
violate or conflict with any provisions of the Articles of
Incorporation or Bylaws of the Company, or any judgment,
decree, order, statute, rule or regulation of any court or,
to the knowledge of such counsel, of any Permit public,
governmental or other regulatory agency or body having
jurisdiction over the Company or its properties or assets.
(vi) To the knowledge of such counsel, the Company
is not in breach or violation of any term or provision of its
Articles of Incorporation or Bylaws, or any indenture,
mortgage, deed of trust, note or other agreement or
instrument, or any Permit, judgment, decree, statute, rule or
regulation;
(vii) The Registration Statement, the Preliminary
Prospectus and the Prospectus and each amendment or supplement
thereto (except for the financial statements and schedules and
other financial and statistical data included therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the
Securities Act and the Rules;
(viii) To such counsel's knowledge, all contracts,
agreements and other documents required to be described in or
filed as exhibits to the Registration Statement or the
Prospectus have been so described or filed as exhibits to the
Registration Statement and the Prospectus, or an amendment or
supplement thereto;
(ix) The Registration Statement is effective
under the Securities Act, and any required filing of the
Prospectus or any supplement thereto pursuant to Rule 424(b)
has been made in the manner and within the time period
required by Rule 424(b). To such counsel's knowledge, no order
suspending the effectiveness of the Registration Statement, or
any post-effective amendment thereof, has been issued and no
proceedings therefor have been instituted or are pending or
threatened or contemplated;
-25-
(x) To such counsel's knowledge, there is no
litigation, arbitration, action, suit or governmental or other
proceeding or investigation before or by any court or before
or by any public, regulatory or governmental agency or body,
domestic or foreign, pending or threatened against, or
involving the assets, properties or business of, the Company
or any of the Subsidiaries which is not properly described in
the Registration Statement and the Prospectus and which (A) is
required to be disclosed in the Registration Statement or the
Prospectus, (B) if adversely determined, could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect or (C) might prevent the consummation of this
Agreement or the Purchase Option;
(xi) To such counsel's knowledge, there is no
person holding any right to require or participate in the
registration under the Securities Act of the Common Stock to
be effected by the Registration Statement, the rights of which
have not been satisfied or waived in their entirety with
respect to such registration;
(xii) To the extent that the statements contained
in the Prospectus under the headings "Risk Factors",
"Business," "Management," "Description of Securities," and
statements contained elsewhere in the Prospectus refer to
opinions of such counsel or matters of law or purport to
summarize the provisions of statutes, regulations, contracts,
agreements or other documents, such statements have been
reviewed by such counsel and are correct in all material
respects (except that such counsel need express no opinion as
to the completeness of such statements);
(xiii) The Company is not, and following the
transactions contemplated by this Agreement will not be,
subject to regulation as an investment company under the
Investment Company Act of 1940, as amended;
(xiv) Such counsel has no reason to believe that
the offer and sale of all securities of the Company made
within the last three years as set forth in Item 26 of the
Registration Statement were not exempt from the registration
requirements of the Securities Act, pursuant to the provisions
set forth in such Item, and from the regulation or
qualification requirements of all relevant state securities
laws.
-26-
In rendering the foregoing opinion, counsel may state that
such opinion is limited to federal and applicable state law, which
shall include the laws of Arizona and the general corporate laws of
Nevada and New Mexico, and rely, as to matters of fact, upon
certificates of responsible officers of the Company and on certificates
of public officials, and may base its opinion upon such reasonable
investigations and assumptions as shall be set forth in such opinion.
The opinion of such counsel for the Company shall state that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives of the Representatives
and counsel for the Representatives at which the contents of the
Registration Statement and related matters were discussed and, although
such counsel has not independently verified, is not passing upon and
does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement, no
facts have come to the attention of such counsel that lead it to
believe that the Registration Statement, as of the Effective Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as of the
Closing Date includes an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not comment as
to the financial statements and other financial or statistical data
included in the Registration Statement, and the Prospectus or the
exhibits to the Registration Statement).
(h) On each Closing Date, you shall have received from
Xxxxx & Xxxxxx L.L.P., counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Stock, the Registration Statement, the
Prospectus and other related matters as you may require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(i) On each Closing Date, you shall have received a
certificate, dated such Closing Date, of the President and the
principal financial officer of the Company, in which such officers
shall state that the representations and warranties of the Company in
this Agreement are true and correct on and as of the date of this
Agreement and such Closing Date, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or before such Closing Date, that no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such officers, no proceedings for that
purpose have been instituted or are contemplated by the Commission and
that, after the date of the most recent financial statements in the
Prospectus, there has been no change in the financial
-27-
position or results of operation of the Company and its Subsidiaries
except as set forth in or contemplated by the Prospectus, which would
have a Material Adverse Effect.
(j) On each Closing Date, you shall have received a
letter, dated such Closing Date, of KPMG Peat Marwick LLP that meets
the requirements of subsection (d) of this Section, except that the
specified date referred to in such subsection will not be more than
five days before such Closing Date for purposes of this subsection.
(k) You shall have received an agreement from each
director, officer and 5% stockholder of the Company, in form and
substance reasonably satisfactory to you, that such director, officer
and security holder will not offer, sell, pledge, hypothecate or
otherwise dispose of (including any short sale or sale against the
box), whether publicly, privately pursuant to Rule 144, 144A or
Regulation S, any shares of the Company's Common Stock or any security
convertible into or exchangeable for such Common Stock without your
prior written consent for six (6) months after the Effective Time.
(l) The Purchase Option shall have been issued and sold
to you as provided hereunder.
(m) As of the Effective Date, the Stock shall have been
authorized for quotation on the NMS upon official notice of issuance
and registered under Section 12(g) of the Exchange Act.
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all respects when and as provided in this Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all respects reasonably satisfactory in form and substance to
you and your counsel, you may cancel this Agreement and all obligations of the
Underwriters hereunder at, or at any time prior to, any Closing Date. Notice of
such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. 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
Securities Act, the Exchange Act or
-28-
otherwise (including, without limitation, all costs of investigating,
disputing or defending any such claim or action or any amount paid in
settlement thereof), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) the breach of any representation or warranty, covenant or
agreement of the Company in any document delivered hereunder (ii) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related Preliminary Prospectus,
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, or (iii) any
untrue statement or alleged untrue statement of a material fact
contained in any application or other document or communication
executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or
Blue Sky laws thereof or filed with the Commission or any securities
exchange, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iv) any untrue statement or
alleged untrue statement of any material fact contained in any audio or
visual materials used in connection with the marketing of the Stock
produced by the Company, indluding without limitation, slides, videos,
film and tape recordings, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such losses, claims,
damages, liabilities or actions as such expenses are incurred;
provided, however, that the Company will not be liable in any such case
(i) to the extent that any such losses, claims, damages or liabilities
arise out of or are based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from the information
included under the heading "Underwriting" in the Prospectus in reliance
upon and in conformity with written information furnished to the
Company by you or by or on behalf of any Underwriter through you
specifically for inclusion therein; or (ii) with respect to any
Preliminary Prospectus, to the extent that any such losses, claims,
damages or liabilities are asserted by a purchaser of Stock who was not
sent or given by any Underwriter seeking indemnity hereunder a copy of
the Prospectus (as then amended or supplemented), if such Underwriter
was required by law to have delivered such Prospectus to such person at
or prior to the written confirmation of the sale of Stock to such
person, and the Prospectus would have cured the defect giving rise to
such loss, claim, damage or liability.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related Preliminary Prospectus,
or arise out of or are based upon the omission or the 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 any
-29-
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement or omission or
alleged omission from the information included under the heading
"Underwriting" in the Prospectus in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
such Underwriter, directly or through you, specifically for use therein
(exclusive of the last paragraph thereof), and will reimburse any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such losses, claims, damages,
liabilities or actions as such expenses are incurred, and provided,
further, that the obligation of each Underwriter to indemnify the
Company (including any controlling person, director or officer thereof)
shall be limited to the discount received by the Underwriter in the
offering.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect is to be made against the
indemnifying party under subsection (a), or (b) above, notify the
indemnifying party of the commencement thereof, enclosing a copy of all
papers served, but the omission so to notify such indemnifying part of
any such action, suit or proceeding shall not relieve such indemnifying
party from any liability that such indemnifying party may have to any
indemnified party otherwise than under this Section 7 except to the
extent materially prejudiced by such failure. In case any such action
is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section
for any legal or other expenses, except as provided below and except
for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of the
defense of such action or that there may be defenses available to the
indemnified party that are not available to the indemnifying party (in
which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party) or (iii)
the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in
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each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be
liable for any settlement for any action, suit, proceeding or claim
effected without its written consent, which consent shall not be
unreasonably withheld.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for
in subsection 7(a), (b) or (c) above is due in accordance with its
terms but for any reason is held to be unavailable from the Company,
the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses (including, without
limitation, legal and other expenses incurred in connection with, and
any amount paid in settlement of, any action, suit, proceeding or
litigation, or any claim, but after deducting any contribution received
by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities
Act, officers of the Company who signed the Registration Statement and
directors of the Company who may also be liable for the contribution)
to which the Company and one or more of the Underwriters may be subject
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand, and the Underwriters, on the
other, from the offering of the Stock or, if such allocation is not
permitted by applicable law, then each party shall contribute to
amounts paid or payable to the other parties in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company, on the one hand, and the Underwriters,
on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same
proportion as (a) the total proceeds from the offering (net of
underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus,
bear to (b) the underwriting discounts received by the Underwriters, as
set forth in the table on the cover page of the Prospectus. The
relative fault of the Company, on the one hand, or the Underwriters, on
the other, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company, 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 and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of
this Section 7(d), (i) in no case shall any Underwriter (except as
otherwise agreed among the Underwriters) be liable or
-31-
responsible for any amount in excess of the underwriting discount
applicable to the Stock purchased by such Underwriter hereunder and
(ii) the Company shall be liable and responsible for any amount in
excess of such underwriting discount; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Any
party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this Section 7(d), notify such party or parties
from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought from
any other obligation such party or parties may have hereunder or
otherwise than under this Section 7(d). No party shall be liable for
contribution with respect to any action, suit, proceeding or claim
settled without its written consent, which shall not be unreasonably
withheld. The Underwriters' obligations to make contributions pursuant
to this Section 7(d) are several in proportion to their respective
underwriting commitments and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability that the Company 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
Securities Act or the Exchange Act. The obligations of the Underwriters
under this Section shall be in addition to any liability the respective
Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each person named
as a director nominee in the Prospectus, to each officer of the Company
who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Securities Act or
the Exchange Act.
(f) It is understood that the indemnifying party shall,
in connection with any one action, suit, or proceeding or separate but
substantially similar or related actions, suits, or proceedings 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 (in addition to any local counsel) at
any time for all indemnified parties not having actual or potential
differing interests among themselves, which firm shall be designated by
a majority of such indemnified parties.
8. Default by the Company.
(a) If the Company shall fail on the First Closing Date
or, if any Option Shares are to be purchased, the Second Closing Date,
as the case may be, to sell
-32-
and deliver the number of Firm Shares or Option Shares, as the case may
be, which the Company is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
Underwriter.
(b) In the event of a default by the Company under this
Section 8, the Underwriters shall have the right to postpone the First
Closing Date or, if any Option Shares are to be purchased, the Second
Closing Date, 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.
(c) No action taken pursuant to this Section 8 shall
relieve the Company from any liability, if any, in respect of such
default.
9. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Sections 8 or 10 hereof) to
purchase on any Closing Date the shares of Stock agreed to be purchased on such
Closing Date by such Underwriter or Underwriters, you may find one or more
substitute underwriters to purchase such Stock or make such other arrangements
as you may deem advisable or one or more of the remaining Underwriters may agree
to purchase such Stock in such proportions as may be approved by the
Representative, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date:
(a) If the number of shares of Stock to be purchased by
the defaulting Underwriters on such Closing Date shall not exceed 10%
of the Stock that all the Underwriters are obligated to purchase on
such Closing Date, then each of the nondefaulting Underwriters shall be
obligated to purchase such shares on the terms herein set forth in
proportion to their respective obligations hereunder; provided,
however, that in no event shall the maximum number of shares of Stock
that any Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 9 by more than one-ninth
of such number of shares without the written consent of such
Underwriter, or
(b) If the number of shares of Stock to be purchased by
the defaulting Underwriters on such Closing Date shall exceed 10% of
the Stock that all the Underwriters are obligated to purchase on such
Closing Date, then the Company shall be entitled to an additional
business day within which it may, but is not obligated to, find one or
more substitute Underwriters reasonably satisfactory to you to purchase
such shares of Stock upon the terms set forth in this Agreement.
In any such case, either you or the Company shall have the right to
postpone the applicable Closing Date for a period of not more than seven
business days in order that necessary changes and arrangements including any
necessary amendments or supplements to the Registration
-33-
Statement or Prospectus) may be effected by you and the Company, and the Company
agrees to prepare and file promptly any amendment or supplement to the
Registration Statement or the Prospectus which in the opinion of counsel to the
Underwriters may thereby be made necessary. If the number of shares of stock to
be purchased on such Closing Date by such defaulting Underwriter or Underwriters
shall exceed 10% of the shares of Stock that all the Underwriters are obligated
to purchase on such Closing Date, and none of the nondefaulting Underwriters or
the Company shall make arrangements pursuant to this Section 9 within the period
specified for the purchase of the shares of Stock that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company and without liability on the part
of the Company, except in both cases as otherwise provided for in Sections 5(j),
(k) and (l) and, 7, 8 and 11 hereof. The provisions of this Section shall not in
any way affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. The term "Underwriter"
as used in this Agreement shall include any party substituted under this Section
9 as if such party had originally been aparty to this Agreement and had been
allocated the aggregate number of (i) such Stock actually purchased by such
party as a result of its original commitment to purchase Stock, plus (ii) Stock
purchased pursuant to this Section 9.
10. Termination. The obligations of the several Underwriters to
purchase the Stock may be terminated at any time prior to any Closing Date by
notice to the Company from the Representative at any time if in the discretion
of the Representative at or before any Closing Date, upon or prior to such date
(i) there shall have occurred any material loss to or interference with the
businesses or properties of the Company from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, or any material adverse change, or any
development which, in your reasonable opinion, is likely to result in a material
adverse change (including, without limitation, a change in management or control
of the Company) in the condition (financial or otherwise), business, prospects,
net worth or results of operations of the Company or its subsidiaries; (ii)
trading in the Stock has been suspended by the Commission or trading generally
on the NMS, New York Stock Exchange, Inc. or on the American Stock Exchange,
Inc. has been suspended or limited, or minimum or maximum ranges for prices of
securities shall have been fixed, or maximum ranges for prices of securities
have been required, by such exchange or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental or regulatory
authority; (iii) any banking moratorium has been declared by Federal or state
bank authorities; (iv) any domestic or international event or act or occurrence
shall have occurred that shall have materially disrupted, or in your reasonable
opinion will in the future materially disrupt, the securities markets generally;
(v) there shall have occurred any new outbreak or material escalation of
hostilities or other calamity or crises the effect of which on the financial
markets of the United State is such as to make it, in your reasonable judgment,
inadvisable or impracticable to proceed with the offering; or (vi) there shall
be such material adverse change in general financial, political or economic
condition or the effect of international conditions on the financial markets in
the United
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States, in any such case as to make it, in your reasonable judgment, inadvisable
or impracticable to market the Stock.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers, and the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company, or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Stock. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Stock by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed pursuant to Sections 5(j), (k) (subject to the
limitations therein) and (l) and the respective obligations of the Company and
the Underwriters pursuant to Sections 7 and 8 shall remain in effect, and if the
Agreement is terminated after the First Closing Date, the representations and
warranties in Section 1 and all obligations under Section 5 shall also remain in
effect. If the purchase of Stock by the Underwriters is not consummated for any
reason (other than a default by the Underwriters), the Company will reimburse
the Underwriters for all out of pocket expenses including, but not limited to,
such costs as telephone calls, courier service, copying, accommodations, travel
and fees and disbursements for legal counsel.
12. Applicable Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Arizona. If any action or proceedings shall have been brought by the Company or
by any of the Underwriters in order to enforce any right or remedy under this
Agreement or relating to or arising out of the transactions contemplated hereby,
the Company and each of the Underwriters hereby consent to, and agree to submit
to, the jurisdiction of the Superior Court of the State of Arizona for the
County of Maricopa and of any United States federal court sitting in the City of
Phoenix, and waive any claim of improper venue or forum non conveniens as to any
such action or proceeding. The Company and each Underwriter hereby irrevocably
agree that process in any such action or proceeding may be served in the manner
provided by Arizona law for service on foreign corporations or other entities.
13. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to HD Xxxxx & Co., Inc., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 000 Xxxxxxxxx X.X., Xxxxxxxxxxx, Xxx Xxxxxx
00000, Attention: President; provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives,
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
-35-
15. Representation of Underwriters. You will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by you will be binding upon all of the Underwriters.
16. Counterparts. This Agreement may be executed 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 Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
XXXXXX OUTDOOR ADVERTISING & TRAVEL
CENTERS INCORPORATED
By: ___________________________________
Xxxxxxx X. Xxxxxx
Title: Chairman of the Board, President and Chief
Executive Officer
-36-
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
HD XXXXX & CO., INC.
By:_________________________
Its:___________________________
For itself and for the other
several Underwriters listed in
Schedule A to the foregoing
Agreement
-37-
SCHEDULE A
Number of
Shares
of Stock
---------
HD Xxxxx & Co., Inc.
-38-
