EXHIBIT 1.1
__________ Shares
X.X. XXXXXX, INC.
Common Stock
UNDERWRITING AGREEMENT
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March 10, 1997
XXXXX XXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
SALOMON BROTHERS INC
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
X.X. Xxxxxx, Inc., a Delaware corporation (the "Company"), proposes to
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issue and sell an aggregate of shares of its common stock, $0.01 par value per
share (the "Common Stock"), to you ("you" or the "Underwriters"). The shares
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of Common Stock to be issued and sold to the Underwriters by the Company are
hereinafter referred to as the "Firm Shares". The Company also proposes to sell
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to the Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional shares (the "Additional Shares") of Common Stock.
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The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares".
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The Company wishes to confirm as follows its agreements with you in
connection with the several purchases of the Shares by the Underwriters.
Registration Statement and Prospectus. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
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accordance with the provisions of the Securities Act of 1933, as amended, and
the published rules and regulations of the Commission thereunder (collectively,
the "Act"), a registration statement on Form S-3 under the Act (the
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"registration statement"), including a prospectus subject to completion relating
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to the Shares. The term "Registration Statement" as used in this Agreement
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means the
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registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, or, if the registration statement
became effective prior to the execution of this Agreement, as amended prior to
the execution of this Agreement, and any registration statement filed pursuant
to Rule 462(b) under the Act increasing the size of the offering registered
under the Act. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be filed and
must be declared effective before the offering of the Shares may commence, the
term "Registration Statement" as used in this Agreement means the registration
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statement as amended by said post-effective amendment. The term "Prospectus"
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as used in this Agreement means the prospectus in the form included in
the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
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Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
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to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission, and as
such prospectus shall have been amended from time to time prior to the date of
the Prospectus. Any reference in this Agreement to the registration statement,
the Registration Statement, any Prepricing Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act"), which, upon filing, are incorporated by
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reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
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are incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus, or any amendment or
supplement thereto.
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2. Agreements to Sell and Purchase. Subject to such adjustments as you
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may determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $[ ] per Share (the
"purchase price per share"), the number of Firm Shares which bears the same
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proportion to the aggregate number of Firm Shares to be issued and sold by the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be
sold by the Company.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company and subject to all the
terms and conditions set forth herein, the Underwriters shall have the right to
purchase from the Company, at the purchase price per share, pursuant to an
option (the "over-allotment option") which may be exercised at any time and from
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time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of Additional Shares from the Company.
Additional Shares may be purchased only for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. The number
of Additional Shares which the Underwriters elect to purchase upon any exercise
of the over-allotment option shall be provided by the Company. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as you may determine in order to avoid fractional
shares) which bears the same proportion to the number of Additional Shares to be
sold by the Company as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number of Firm Shares increased
as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares
to be sold by the Company.
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3. Terms of Public Offering. The Company has been advised by you that
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the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable upon the terms set forth in
the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
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Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on March [ ], 1997 (the "Closing Date"). The place of closing
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for the Firm Shares and the Closing Date may be varied by agreement among you
and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing Date"),
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which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to accounts
specified by each of the Company and the Custodian not later than two business
days before the Closing Date or the Option Closing Date, as the case may be.
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5. Agreements of the Company. The Company agrees with the several
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Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-
effective amendment to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing,
when the Registration Statement or such post-effective amendment has become
effective.
(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or any order preventing or suspending the use of
any Prepricing Prospectus or the Prospectus or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation or the threatening of any proceeding for such purpose; and (iii)
within the period of time referred to in paragraph (f) below, of any change in
the Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement or
the Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of any
Prepricing Prospectus or the Prospectus or suspending any such qualification,
the Company will promptly use its best efforts to obtain the withdrawal of
such order at the earliest possible time.
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(c) The Company will furnish to you, without charge (i) five copies of the
registration statement as originally filed with the Commission and of each
amendment thereto, including all exhibits thereto, (ii) each PrePricing
Prospectus, the Prospectus and any amended or supplemented Prospectus, (iii)
such number of copies of the registration statement as originally filed and of
each amendment thereto, but without exhibits, as you may request, (iv) such
number of copies of the Incorporated Documents, without exhibits, as you may
request, and (v) five copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus or, prior to the end of
the period of time referred to in paragraph (f) below, file any document
which, upon filing becomes an Incorporated Document, of which you shall not
previously have been advised or to which, after you shall have received a copy
of the document proposed to be filed, you shall reasonably object.
(e) Prior to the execution and delivery of this Agreement, the Company has
delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
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Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of
the Company or in the opinion of counsel for the Underwriters is required to
be set forth in the Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus (or to file under the Exchange
Act any document which, upon filing, becomes an Incorporated Document) in
order to comply with the Act or any other law, the Company will forthwith
prepare and, subject to the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof. In the event that the Company and you
agree that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided
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that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the date the Registration Statement is declared
effective by the Commission (the "Effective Date") and ending not later than
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15 months thereafter, as soon as practicable after the end of such period,
which consolidated
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earnings statement shall satisfy the provisions of Section ll(a) of the Act.
(i) During the period of five years hereafter, the Company will furnish to
you as soon as available, a copy of all public materials furnished by the
Company to its stockholders and all public reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission.
(j) If, prior to the Closing Date, this Agreement shall be terminated by
the Underwriters because of any failure or refusal on the part of the Company
to perform any agreement on its part to be performed, or because any condition
set forth in Section 8 hereof is not fulfilled, the Company agrees to
reimburse you for all reasonable out-of-pocket expenses (including fees and
expenses of your counsel) incurred by you in connection herewith (it being
understood that the Company shall have no such reimbursement obligation if
this Agreement is terminated pursuant to the second paragraph of Section 10
hereof or by notice given by you terminating this Agreement pursuant to
Section 10 or Section 11 hereof).
(k) The Company will apply the net proceeds from the sale of the Shares to
be sold by it hereunder in accordance with the description set forth in the
Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file the
Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
(m) The Company will not sell, contract to sell or otherwise dispose of any
Common Stock (other than the Shares) or any securities convertible into or
exercisable or exchangeable for Common Stock, or grant any options, warrants
or other rights to purchase Common Stock, for a period of 90 days after the
date of the Prospectus, without the prior written consent of Xxxxx Xxxxxx
Inc.; provided, however, that the foregoing shall not prohibit (i) the grant
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of options pursuant to stock option plans existing on the date hereof, (ii)
the issuance of Common Stock upon exercise of options granted under stock
option
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plans referred to in clause (i) or pursuant to employee benefit plans existing
on the date hereof or (iii) the issuance of Common Stock or options, warrants
or other rights to purchase Common Stock in connection with the acquisition of
a business by the Company, provided that the entity that receives such Common
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Stock or such options, warrants or rights agrees to be bound by this Section
5(m).
(n) The Company has furnished or will furnish to you "lock-up" letters
described in the Prospectus in form and substance satisfactory to you, signed
by certain of its executive officers and directors previously designated by
you.
(o) Except as stated in this Agreement and in the Prepricing Prospectus and
Prospectus, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will take all steps necessary to effect the listing of the
Shares, subject to notice of issuance, on the New York Stock Exchange.
6. Representations and Warranties of the Company. The Company represents
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and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Act, complied when so filed
in all material respects with the provisions of the Act. The Commission has
not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission, as the case
may be, conform in all material respects to the requirements of the Act and do
not and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable
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filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (in the case of the Prospectus, in light of the circumstances
under which they were made); provided that no representation or warranty is
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made as to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written information
furnished to the Company through you with respect to any Underwriter
specifically for inclusion therein.
(c) The Incorporated Documents, when they were or are filed with the
Commission, conformed or will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and none of such
documents contained or will contain 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, in the light of the circumstances under which
they were made, not misleading.
(d) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or incorporated by
reference in the Prospectus present fairly the consolidated financial position
and results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(e) Ernst & Young, LLP, who have reported on the audited financial
statements of the Company, whose report is incorporated by reference in the
Prospectus and who have delivered the initial letter referred to in Section
10(g) hereof, are independent public accountants as required by the Act.
(f) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Prospectus have been
prepared in all material respects in accordance with applicable requirements
of Regulation S-X promulgated under the Exchange Act and have been properly
computed on the bases described therein. The material assumptions used in the
preparation
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of the pro forma financial statements and other pro forma information in the
Prospectus are set forth therein and are reasonable, and the adjustments used
therein are appropriate to give pro forma effect to the transactions or
circumstances referred to therein.
(g) The Company and each of its subsidiaries (as defined in Section 16)
have been duly formed and are validly existing in good standing under the laws
of their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification except where the failure to so qualify
would not have a material adverse effect on the financial condition, results
of operations, business or prospects of the Company and its subsidiaries taken
as a whole (a "Material Adverse Effect"), and have all power and authority
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necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and non-assessable and
conform to the description thereof contained in or incorporated by reference
in the Prospectus; and all of the issued equity securities of each subsidiary
of the Company have been duly authorized and validly issued and, as to shares
of capital stock of any corporation constituting a subsidiary, are fully paid
and non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims other than restrictions on transfer imposed
by applicable securities laws.
(i) The unissued shares of the Common Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly authorized and, when
issued and delivered against payment therefor as provided herein, will be
validly issued, fully paid and non-assessable and such shares will conform to
the description thereof contained in or incorporated by reference in the
Prospectus.
(j) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or
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result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the organizational documents of the Company or
any of its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets; and except for
such consents, approvals, authorizations, registrations or qualifications as
may be required under the Act or applicable state or foreign securities laws
in connection with the purchase and distribution of the Shares by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby.
(k) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements incorporated by reference
in the Prospectus, any loss or interference with the business of the Company
and its subsidiaries taken as a whole from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, resulting in a Material Adverse Effect; and,
since such date, there has not been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus.
(l) Other than with respect to the offering contemplated hereby and the
shares of Common Stock received in connection with the acquisition (The
"Torrey Acquisition") of the Torrey Group of Companies ("Torrey"), there are
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no
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contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Act.
(m) The Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus, including any sales
pursuant to an exemption from the registration requirements of the Act other
than shares issued pursuant to stock options plans or other employee benefit
plans and shares issued in connection with the Torrey Acquisition.
(n) This Agreement has been duly authorized, executed and delivered by the
Company.
(o) The Company and its subsidiaries own the items of real property and
personal property purported to be owned by them which are material to the
conduct of the business of the Company and its subsidiaries taken as a whole,
free and clear of all liens, encumbrances and defects, except such as are
described or incorporated by reference in the Prospectus or such as would not
have a Material Adverse Effect. All real property held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are described in the Prospectus or
such as would not have a Material Adverse Effect.
(p) Except as described or incorporated by reference in the Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which are reasonably likely
to have a Material Adverse Effect; and to the best of the Company's knowledge,
no such proceedings are threatened by governmental authorities or by others.
The conditions for use of Form S-3, as set forth in the General Instructions
thereto, have been satisfied.
(q) To the knowledge of the Company, all real property owned (either
presently or at any time in the past), or presently leased by the Company and
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its subsidiaries in connection with the operation of its business, including,
without limitation, any subsurface soils and ground water (collectively, the
"Realty"), is free of contamination from any substance or material presently
known to be toxic or hazardous, including, without limitation, any radioactive
substance, methane, volatile hydrocarbons or industrial solvents (each a
"Hazardous Substance"), which could reasonably be expected to materially
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impair the beneficial use thereof by the Company and its subsidiaries or
constitute or cause a significant health, safety or other environmental hazard
to occupants or users (except for contaminations which would not have a
Material Adverse Effect); and to the knowledge of the Company, the Realty does
not contain any underground storage or treatment tanks, active or abandoned
water, gas or oil xxxxx, or any other underground improvements or structures,
other than the foundations, footings or other supports for the improvements
located thereon, the presence of which would have a Material Adverse Effect.
Notwithstanding the foregoing, Hazardous Substances shall be deemed not to
include any supplies or substances maintained, used, stored or held on the
Realty which are (i) naturally occurring, (ii) installed by public utilities
or (iii) used in the ordinary course of the Company's or its subsidiaries'
business, provided that such supplies or substances are stored, used,
maintained and held in all material respects in accordance with any applicable
governmental requirements and with restrictions, conditions and standards
suggested by the manufacturer and the Company's insurance carriers.
(s) The Company has not taken and shall not take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock.
(t) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses.
(u) The Company and each of its subsidiaries own or possess adequate rights
to use all material patents, patent
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applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses necessary for the conduct
of their respective businesses the absence of which would have a Material
Adverse Effect and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others.
(v) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Act which have not been described or incorporated by reference in the
Prospectus or filed as exhibits to the Registration Statement or incorporated
therein by reference as permitted by the Act.
(w) No labor disturbance by the employees of the Company exists or, to the
knowledge of the Company, is imminent which could reasonably be expected to
have a Material Adverse Effect.
(x) The Company has filed all federal, state and local income and franchise
tax returns required to be filed through the date hereof and has paid all
taxes due thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which would reasonably likely have) a
Material Adverse Effect.
(y) Since the date as of which information is given in the Prospectus and
through the date hereof, and except as may otherwise be disclosed or
incorporated by reference in the Prospectus, the Company has not (i) issued or
granted any securities other than shares of Common Stock issued pursuant to
stock option plans or other employee benefit plans existing on the date hereof
or the grant of options pursuant to option plans existing on the date hereof,
(ii) entered into any material transaction not in the ordinary course of
business or (iii) declared or paid any dividend on its capital stock, and,
from the date of the Prospectus, the Company has not incurred any material
liability other than in the ordinary course of business.
(z) The Company is in full compliance with Section 13(b)(2) of the
Exchange Act.
-16-
(aa) Neither the Company nor any of its subsidiaries (i) is in
violation of its organizational documents, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties or assets is subject as a result of which default there
would be a Material Adverse Effect or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business which violation or failure would have a Material Adverse Effect.
(bbb) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United States Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(7) Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter, its officers and employees and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
-------- -------
respect to any Prepricing Prospectus shall not inure to the benefit of any
-17-
Underwriter (or to the benefit of any officer or employee of such Underwriter or
any person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act, and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. Notwithstanding anything to the contrary herein, no
Underwriter shall be obligated to send or give any Incorporated Document, or any
amendment or supplement thereto, to any person in order to benefit from the
indemnification provisions herein or otherwise. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
--------------------
indemnifying parties shall be entitled to assume the defense thereof,
including the employment of counsel and payment of all fees and expenses.
Such Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such Underwriter or
such controlling person and the indemnifying parties and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and any indemnifying party by the
same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between
them (in which case the indemnifying party shall not have the right to assume
the defense of such action, suit or proceeding on behalf of such Underwriter
or such controlling person).
-18-
is understood, however, that the indemnifying parties shall, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings 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 such Underwriters and controlling persons, which
firm shall be designated in writing by Xxxxx Xxxxxx Inc., and that all such
fees and expenses shall be reimbursed as they are incurred. The indemnifying
parties shall not be liable for any settlement of any such action, suit or
proceeding effected without their written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, or any
such controlling person based on the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Company, its directors, any such officer, and
any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement
-19-
shall be in addition to any liability which any Underwriter may otherwise
have.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Shares, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus; provided that, in the
event that the Underwriters shall have purchased any Additional Shares
hereunder, any determination of the relative benefits received by the Company
or the Underwriters from the offering of the Shares shall include the net
proceeds (before deducting expenses) received by the Company, and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of
the Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
-20-
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds
the amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. Notwithstanding the provisions of paragraph (d) above or
this paragraph (e), the Company shall not be required to contribute an amount
in excess of the amount for which such party would have been liable if the
provision of paragraph (a) had been available. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be
-21-
paid by the indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The indemnity and
contribution agreements contained in this Section 7 and the representations
and warranties of the Company set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter, the Company, its directors or officers or any person controlling
the Company, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter or any
person controlling any Underwriter, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 7.
(h) The Underwriters severally confirm and the Company acknowledges that
the statements with respect to the public offering of the Common Stock by the
Underwriters set forth on the cover page of, the legend concerning over-
allotments on the inside front cover page of, the concession and reallowance
figures appearing under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
8. Conditions of Underwriters' Obligations. The several obligations of the
---------------------------------------
Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and
all filings, if any, required by Rules 424 and 430A under the Act shall have
been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission,
-22-
and any request of the Commission
for additional information (to be included in the registration statement or
the prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company and its
Subsidiaries not contemplated by the Prospectus, which in your opinion would
materially adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company which makes any statement
made in the Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in your opinion materially adversely affect
the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of Xxxxxx Xxxx
& Xxxxxxxx LLP, special counsel for the Company, dated the Closing Date and
addressed to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the business, operations or financial condition of the Company
and its subsidiaries taken as a whole, and has all corporate power and
authority necessary to own or hold its properties and conduct its business
as described or incorporated by reference in the Prospectus;
(ii) The Company has authorized and outstanding capital stock as set
forth in the Prospectus, and all of the issued shares of capital stock of
the Company
-23-
have been duly authorized and validly issued, are fully paid and non-
assessable and conform in all material respects to the description thereof
incorporated by reference in the Prospectus; the shares of Common Stock
being delivered and which are being issued by the Company are duly
authorized and, when issued upon payment therefor in accordance with this
Agreement, will be validly issued, fully paid and non-assessable;
(iii) There are no preemptive rights, nor any restriction upon the
voting or transfer of, any shares of the Common Stock provided for in the
Company's Certificate of Incorporation or bylaws, or to the knowledge of
such counsel, any other agreement to which the Company is a party;
(iv) To such counsel's knowledge and other than as described or
incorporated by reference in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is the subject which is of a character which is
required to be disclosed in the Prospectus; and, to such counsel's
knowledge, no such proceedings are threatened by governmental authorities
or by others.
(v) The Registration Statement was declared effective under the Act
as of the date and time specified in such opinion, the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) under the
Act on the date specified therein, and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose is pending or threatened by
the Commission;
(vi) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to the Closing
Date (other than the financial and pro forma data (and the related notes
thereto) and statistical data and the financial statements and related
schedules therein, as to which such counsel need express no opinion) appear
on their face to comply as to form in all material respects with the
requirements of the Act; the docu-
-24-
ments incorporated by reference in the Prospectus and any further amendment
or supplement to any such incorporated document made by the Company prior
to the Closing Date (other than the financial and pro forma data (and the
related notes thereto) and statistical data and the financial statements,
and related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission appear on their face to
have been appropriately responsive in all material respects to the
requirements of the Act and the Exchange Act;
(vii) To such counsel's knowledge, there are no contracts or other
documents of a character which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Act
which have not been described or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Act;
(viii) This Agreement has been duly authorized, executed and delivered
by the Company; and
(ix) The issue and sale of the shares of Common Stock being delivered
on the Closing Date by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation by the Company
of the transactions contemplated hereby and thereby will not, to such
counsel's knowledge, conflict with or result in a material breach or
violation of any of the terms or provisions of, or constitute a material
default under, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument filed (including by incorporation by
reference) by the Company as an Exhibit to its Annual Report on Form 10-K
for the fiscal year ended September 30, 1996, nor will such actions result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or, to such counsel's knowledge, any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries set forth on Schedule II hereto or any of their properties
or assets; and, except for such consents, approvals, authorizations,
registrations or qualifications as may be required under the
-25-
Act, and applicable state or foreign securities laws in connection with the
purchase and distribution of the Common Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company and
the valid issuance and sale of the Common Stock by the Company.
In rendering such opinion, such counsel may state that its opinion is
limited to the Federal laws of the United States of America, the laws of the
States of Texas and New York and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date, in form
and substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that (x) such counsel has acted as special counsel
to the Company in connection with the preparation of the Registration
Statement and during the course of the preparation of the Registration
Statement and Prospectus, such counsel participated in conferences with
representatives of the Company, the Company's corporate counsel, and its
accountants and the representatives of the Underwriters and at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead it to believe that (I) the
Registration Statement (except as to financial and pro forma data (and related
notes thereto) and statistical data and the financial statements and related
schedules contained or incorporated by reference therein), as of the date the
Registration Statement became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading,
or that the Prospectus (except as to financial and pro forma data (and related
notes thereto) and statistical data and the financial statements and related
schedules contained or incorporated by reference therein) contains any untrue
statement of a material fact or omits to state a 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 or (II) any
Incorporated Document or any amendment or supplement
-26-
thereto made by the Company prior to such Closing Date, when they were filed
with the Commission, as the case may be, contained (except as to financial and
pro forma data (and related notes thereto) and statistical data and the
financial statements and related schedules contained or incorporated by
reference therein) an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel has not independently verified the accuracy, completeness or fairness
of the statements contained in the Registration Statement or Prospectus or
incorporated by reference therein, and such counsel is not passing upon and
such counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or the
Prospectus other than the description of the Company's capital stock
incorporated by reference into the Prospectus.
(d) You shall have received on the Closing Date, an opinion of Xxxxxxx X.
Xxxxxx, Esq., General Counsel of the Company, dated the Closing Date and
addressed to you, to the effect that:
(i) The issue and sale of the shares of Common Stock being delivered
on the Closing Date by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation by the Company
of the transactions contemplated hereby will not, to the knowledge of such
counsel, conflict with or result in a material breach or violation of any
of the terms or provisions of, or constitute a material default under, any
indenture, mortgage, deed or trust, loan agreement or other material
agreement or instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of any of the
Company's subsidiaries set forth on Schedules II and III hereto or any
order,------------ ---rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over any
-27-
of the Company's subsidiaries set forth on Schedule III hereto or any of
their properties or assets; and
(ii) Each subsidiary of the Company set forth on Schedules II and III
------------ ---
which is a corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its state of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of its property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, operations or financial condition of the
Company and its subsidiaries taken as a whole, and has all corporate power
and authority necessary to own or hold its properties and conduct its
business as described in the Prospectus. The outstanding shares of capital
stock of each such subsidiary is duly authorized, validly issued, fully
paid and nonassessable and (except for directors' qualifying shares) are
owned of record, directly or indirectly by the Company. Each subsidiary of
the Company set forth on Schedules II and III which is a limited
------------ ---
partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the state of its
organization, is duly qualified to do business and is in good standing as a
foreign limited partnership in each jurisdiction in which its ownership or
lease of its property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, operation or financial condition
of the Company and its subsidiaries taken as a whole, and has all
partnership power and authority necessary to own or hold its properties and
conduct its business as described in the Prospectus. The subsidiaries
listed on Schedules II and III constitute all of the material subsidiaries
------------ ---
of the Company.
(e) The Underwriters shall have received from Xxxxxx Xxxxxx & Xxxxxxx,
special counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Common Stock, the
Registration Statement, the Prospectus and other re-
-28-
lated matters as the Underwriters may reasonably 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.
(f) At the time of execution of this Agreement, the Underwriters shall have
received from Ernst & Young LLP a letter, in form and substance satisfactory
to the Underwriters, addressed to the Underwriters and dated the date hereof
(i) confirming that they are independent public accountants within the meaning
of the Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter of Ernst & Young LLP referred to in the
preceding paragraph and delivered to you concurrently with the execution of
this Agreement (the "initial letter"), the Company shall have furnished to the
--------------
Underwriters a letter (the "bring-down letter") of such accountants, addressed
-----------------
to the Underwriters and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the Underwriters its certificate,
dated such Closing Date executed
-29-
by its Chairman of the Board, its President or a Vice President and its chief
financial officer stating that:
(i) The representations and warranties of the Company in this
Agreement are true and correct as of the Closing Date as if made on such
date; the Company has complied with all its agreements contained herein to
be performed by it at or prior to the Closing Date; and the conditions set
forth in Sections 8(a) and 8(i) have been fulfilled;
----
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
initiated or threatened; and
(iii) All filings required by Rule 424(b) and Rule 430A under the Act
have been made.
(i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall not have been any change in the capital
stock, net revenues, per share or total amounts of income before extraordinary
income or of net income or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i) or (ii), is, in
the judgment of Xxxxx Xxxxxx Inc. and/or a majority in interest of the several
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Common
Stock being delivered on the Closing Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the
-30-
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement or the Prospectus as you reasonably may request.
(l) The Company shall have performed such of its obligations under this
Agreement as are to be performed by the terms hereof.
(m) You shall have been furnished with such additional documents and
certificates as you or counsel for the Underwriters may reasonably request.
(n) The Common Stock to be purchased on the Closing Date by the
Underwriters shall be approved for listing on the New York Stock Exchange.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you or to your counsel shall be deemed a representation and
warranty by the Company to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (h) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c) and (d)
---
shall be revised to reflect the sale of Additional Shares.
9. Expenses. As between the Company, on the one hand, and the Underwriters
--------
on the other hand, the Company
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shall pay the following costs and expenses and all other costs and expenses
incident to the performance by the Company of their obligations hereunder: (i)
the preparation, printing or reproduction, and filing with the Commission of the
registration statement (including financial statements and exhibits thereto),
each Prepricing Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the registration statement, each Prepricing Prospectus, the
Prospectus, the Incorporated Documents, and all amendments or supplements to any
of them, as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the original issuance and sale of the Shares; (iv) the
printing (or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New York Stock Exchange; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives (but not
Underwriters' representatives) in connection with presentations to prospective
purchasers of the Shares; and (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become effective:
---------------------------
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement
-32-
shall have become effective, it may be terminated by the Company, by notifying
you, or by you, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
----------
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or
refuse to purchase Shares which it or they are obligated to purchase on the
Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
--
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
----------
the approval of the Company, purchases Shares which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
-33-
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York or Texas shall
have been declared by either federal or state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
-------------
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxx, XX 00000, Attention:
Xxxxxx X. Xxxxxx; or (ii) if to you, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking
Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
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13. Applicable Law; Counterparts. This Agreement shall be governed by and
----------------------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
14. Definition of the Terms "Business Day" and "Subsidiary". For purposes
-------------------------------------------------------
of this Agreement, (a) "business day" means any day on which the New York Stock
Exchange Inc. is open for trading and (b) "subsidiary" has the meaning set forth
in Rule 405 under the Act.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
X.X. XXXXXX, INC.
By:
Name:
Title:
Confirmed as of the date first
above mentioned:
XXXXX XXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
SALOMON BROTHERS INC
By: XXXXX XXXXXX INC.
By:
---------------------------------------
Name:
Title:
SCHEDULE I
X.X. XXXXXX, INC.
Number of Number of
Underwriter Firm Shares Additional Shares
----------- ----------- -----------------
Xxxxx Xxxxxx Inc.
Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities
Corporation
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incor-
porated
Salomon Brothers Inc
Total ............... _________ _______
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