1
EXHIBIT 1
SKYWEST, INC.
COMMON STOCK
-----------------
UNDERWRITING AGREEMENT
February __, 1998
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
SBC WARBURG DILLON READ INC.
As representatives of the several
Underwriters named in Schedule I hereto,
c/o The Xxxxxxxx-Xxxxxxxx Company, LLC
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
SkyWest, Inc., a Utah corporation (the "Company") proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I (the "Underwriters") an aggregate of 1,400,000 shares of
common stock, no par value ("Common Stock"), of the Company (the "Firm Shares")
and, at the election of the Underwriters, subject to the terms and conditions
stated herein, the Company proposes, subject to the terms and conditions stated
herein, to sell to the Underwriters up to 210,000 additional shares of Common
Stock (the "Optional Shares") (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof are collectively
called the "Shares").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No.
333-_____) with respect to the Shares, including a prospectus subject
to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i)
if such registration statement, as it may have been amended, has
become effective under the Act and information has been omitted
therefrom in accordance with Rule 430A under the Act, either (A) if
the Company relies on Rule 434 under the Act, a term sheet relating to
the Shares that shall identify the preliminary prospectus that it
supplements containing such information as is required or permitted by
Rules 434, 430A and
2
424(b) under the Act or (B) if the Company does not rely on Rule 434
under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment
shall have been filed, in such registration statement) with such
changes or insertions as are required by Rule 430A or permitted by
Rule 424(b) under the Act and as have been provided to and approved by
the Representatives, or (ii) if such registration statement, as it may
have been amended, has not become effective under the Act, an
amendment to such registration statement, including a form of
prospectus, a copy of which amendment has been provided to and
approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional shares of Common Stock,
which registration statement will be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating
to the Common Stock, as amended at the time when it was or is declared
effective, including (i) all financial statement schedules and
exhibits thereto, (ii) all documents incorporated by reference therein
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (iii) any information omitted therefrom pursuant
to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Rule 462(b) Registration Statement"
means any registration statement filed with the Commission pursuant to
Rule 462(b) under the Act (including the Registration Statement and
any Preliminary Prospectus or Prospectus incorporated therein at the
time such registration statement becomes effective); the term
"Registration Statement" includes both the Original Registration
Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion
included in such registration statement or any amendment or
post-effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at the time
it was or is declared effective), including all documents incorporated
by reference therein filed under the Exchange Act; the term
"Prospectus" means (A) if the Company relies on Rule 434 of the Act,
the Term Sheet (as hereinafter defined) relating to the Shares that is
first filed pursuant to Rule 424(b)(7) of the Act, together with the
Preliminary Prospectus identified therein that such Term Sheet
supplements; (B) if the Company does not rely on Rule 434 of the Act,
the prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act or (C) if no prospectus is required to be so filed, such
term means the prospectus included in the Registration Statement, in
either case, including all documents incorporated by referenced
therein filed under the Exchange Act; and the term "Term Sheet" means
any term sheet that satisfies the requirements of Rule 434 of the Act.
Any reference in this Agreement to an "amendment or supplement" to any
Preliminary Prospectus or the Prospectus or an "amendment" to any
registration statement (including the Registration Statement) shall be
deemed to include any document incorporated by reference therein and
filed with the Commission under the Exchange Act after the date of
such Preliminary Prospectus, Prospectus or Registration Statement, as
the case may be. For purposes of the preceding sentence, any reference
to the "effective date" of an amendment to a registration statement
shall, if such amendment is effected by means of the filing with the
Commission under the
- 2 -
3
Exchange Act of a document incorporated by reference in such
registration statement, be deemed to refer to the date on which such
document was so filed with the Commission and any reference to the
"date" of a Prospectus that includes a Term Sheet shall mean the date
of such Term Sheet. As used herein, any reference to any statement or
information as being "made", "included", "contained", "disclosed", or
"set forth" in any Preliminary Prospectus, a Prospectus or any
amendment or supplement thereto, or the Registration Statement or any
amendment thereto (or other similar references) shall refer both to
information and statements actually appearing in such document as well
as information and statements incorporated by reference therein. For
purposes of the following representations and warranties, to the
extent reference is made to the Prospectus and at the relevant time
the Prospectus is not yet in existence, such reference shall be deemed
to be to the most recent Preliminary Prospectus.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction. If the
Registration Statement has become effective under the Act, no stop
order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceeding for that purpose
has been instituted or threatened or, to the best knowledge of the
Company, contemplated by the Commission or the securities authority of
any state or other jurisdiction.
(iii) When any Preliminary Prospectus or any amendment or
supplement thereto was filed with the Commission it (A) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder and (B) did
not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto
was or is declared effective, and at each Time of Delivery (as
hereinafter defined), it (A) contained or will contain all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the Act and
the rules and regulations of the Commission thereunder and (B) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading. When (A) the Prospectus or any amendment or supplement
thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective) or (B) any Term Sheet that is a part of the
Prospectus is filed with the Commission pursuant to Rule 434, and at
each Time of Delivery, the Prospectus, as amended or supplemented at
any such time, (1) contained or will contain all statements required
to be stated therein in accordance with, and complied or will comply
in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder and (2) did not or
will not include any untrue statement of a material
- 3 -
4
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(iii) do not apply to statements or omissions made in any Preliminary
Prospectus and any amendment or supplement thereto, the Registration
Statement or any amendment thereto, the Prospectus or any amendment or
supplement thereto, or any Term Sheet in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you specifically for use therein. The Company
acknowledges that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information
relating to an Underwriter furnished in writing to the Company by any
Underwriter specifically for use therein.
(iv) If the Company has elected to rely on Rule 462(b) and
the Rule 462(b) Registration Statement has not been declared effective
(A) the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt; and (B) the
Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act, or the Commission has received payment of such filing fee.
(v) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings or
contracts and other documents are accurate and fairly present the
information required to be shown; and there are no statutes or legal
or governmental proceedings required to be described in the
Registration Statement or the Prospectus that are not described as
required and no contracts or documents of a character that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(vi) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has full
corporate and other power and authority to own or lease its properties
and conduct its business as described in the Prospectus. The Company
has full corporate and other power and authority to enter into this
Agreement and to perform its obligations hereunder. Each of the
Company and its subsidiaries is duly qualified to transact business as
a foreign corporation and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, except where the
failure to so qualify would not subject them to any material liability
or disability.
(vii) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company or any of its
subsidiaries has been issued or is owned or held
- 4 -
5
in violation of any preemptive rights of shareholders, and no person
or entity (including any holder of outstanding shares of capital stock
of the Company or its subsidiaries) has any preemptive or other rights
to subscribe for any of the Shares.
(viii) The only subsidiaries of the Company are: (i) SkyWest
Airlines, Inc., a Utah corporation, (ii) Scenic Airlines, Inc., a Utah
corporation, and (iii) National Parks Transportation, Inc., a Utah
corporation. All of the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned beneficially by the
Company free and clear of all liens, security interests, pledges,
charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever. Other than the
subsidiaries set forth in this paragraph, the Company does not own,
directly or indirectly, any capital stock or other equity securities
of any other corporation or any ownership interest in any partnership,
joint venture, limited liability company or other association other
than as disclosed in the Prospectus.
(ix) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities
or obligations, or (C) obligations of the Company or any such
subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants,
rights or options.
(x) Since the date of the most recent audited financial
statements included in the Prospectus, neither the Company nor any of
its subsidiaries has sustained any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as disclosed in
or contemplated by the Prospectus.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) neither
the Company nor any of its subsidiaries has incurred any liabilities
or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are
material to the Company and its subsidiaries, (B) the Company has not
purchased any of its outstanding capital stock or declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock, (C) there has not been any change in the capital stock,
long-term debt or short-term debt of the Company or any of its
subsidiaries, and (D) there has not been any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the financial position, results of operations or business
of the Company and its subsidiaries, in each case other than as
disclosed in or contemplated by the Prospectus.
(xii) The Shares to be issued and sold by the Company have
been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly
- 5 -
6
issued and fully paid and nonassessable and will conform to the
description of the Common Stock contained in the Prospectus; and the
certificates evidencing the Shares will comply with all applicable
requirements of Utah law.
(xiii) Except as disclosed in the Prospectus, there are no
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 any such right has been
effectively waived) or any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(xiv) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered
under the Act or exempt from the registration requirements of the Act
by reason of Sections 3(b), 4(2) or 4(6) thereof and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
(xv) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or passage of time or both would be, in
violation of its Articles of Incorporation or Bylaws or in default
under any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or to which any of their respective properties
or assets are subject.
(xvi) The issue and sale of the Shares to be issued and sold
by the Company and the performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with, or (with or without the giving of notice or the passage of time
or both) 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, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or to which
any of their respective properties or assets is subject, nor will such
action conflict with or violate any provision of the Articles of
Incorporation or Bylaws of the Company or any of its subsidiaries or
any statute, rule or regulation or any order, judgment or decree of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective
properties or assets.
(xvii) The Company and its subsidiaries have good and
marketable title in fee simple to all real property, if any, and good
title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely 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 and its
subsidiaries; and any real property and buildings held under lease by
the Company or any of its subsidiaries are
- 6 -
7
held under valid, subsisting and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and
do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary.
(xviii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the issue and
sale of the Shares or the consummation of the transactions
contemplated by this Agreement, except the registration of the Shares
under the Act (which, if the Registration Statement is not effective
as of the time of execution hereof, shall be obtained as provided in
this Agreement) and such as may be required under state securities or
blue sky laws in connection with the offer, sale and distribution of
the Shares by the Underwriters.
(xix) Other than as disclosed in the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened (or any basis therefor) in which
the Company or any of its subsidiaries is a party or of which any of
their respective properties or assets are the subject which, if
determined adversely to the Company or any such subsidiary, would
individually or in the aggregate have a material adverse effect on the
financial position, results of operations or business of the Company
and its subsidiaries. Neither the Company nor any of its subsidiaries
is in violation of, or in default with respect to, any statute, rule,
regulation, order, judgment or decree, except as described in the
Prospectus or such as do not and will not individually or in the
aggregate have a material adverse effect on the financial position,
results of operations or business of the Company and its subsidiaries,
and neither the Company nor any of its subsidiaries is required to
take any action in order to avoid any such violation or default.
(xx) Xxxxxx Xxxxxxxx LLP, who has certified certain
financial statements of the Company and its consolidated subsidiaries
for the fiscal years ended March 31, 1997, 1996 and 1995, is and was
during the periods covered by their reports included in the
Registration Statement and the Prospectus, independent public
accountants as required by the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder.
(xxi) The consolidated financial statements and schedules
(including the related notes) of the Company and its consolidated
subsidiaries included in the Registration Statement, the Prospectus or
any Preliminary Prospectus were prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved and fairly present the financial position and results
of operations of the Company and its subsidiaries, on a consolidated
basis, at the dates and for the periods presented. The selected
financial and operating data set forth under the caption "Selected
Consolidated Financial and Operating Data" in the Prospectus fairly
present, on the basis stated in the Prospectus, the information
included therein.
- 7 -
8
(xxii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws relating
to or affecting the enforcement of creditors' rights generally and to
general equitable principles and except as the enforceability of
rights to indemnity and contribution under this Agreement may be
limited under applicable securities laws or the public policy
underlying such laws.
(xxiii) Neither the Company nor any of its officers, directors
or affiliates has (A) taken, 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 to facilitate
the sale or resale of the Shares or (B) since the filing of the
Registration Statement (1) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (2) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company
(xxiv) The Company has obtained for the benefit of the
Company and the Underwriters from each of its directors and executive
officers a written agreement that for a period of 180 days from the
date of the Prospectus such director or executive officer will not,
without your prior written consent, offer, pledge, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, or exercisable or exchangeable for,
shares of Common Stock.
(xxv) Neither the Company, any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any such subsidiary has, directly
or indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(xxvi) The operations of the Company and its subsidiaries
with respect to any real property currently leased or owned or by any
means controlled by the Company or any subsidiary (the "Real
Property") are in compliance with all federal, state, and local laws,
ordinances, rules, and regulations relating to occupational health and
safety and the environment (collectively, "Laws"), and the Company and
its subsidiaries have all licenses, permits and authorizations
necessary to operate under all Laws and are in compliance with all
terms and conditions of such licenses, permits and authorizations;
neither the Company nor any subsidiary has authorized, conducted or
has knowledge of the generation, transportation, storage, use,
treatment, disposal or release of any hazardous substance,
- 8 -
9
hazardous waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, petroleum product, natural gas,
liquefied gas or synthetic gas defined or regulated under any
environmental law on, in or under any Real Property; and there is no
pending or threatened claim, litigation or any administrative agency
proceeding, nor has the Company or any subsidiary received any written
or oral notice from any governmental entity or third party, that: (A)
alleges a violation of any Laws by the Company or any subsidiary; (B)
alleges the Company or any subsidiary is a liable party under the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. ss. 9601 et seq. or any state superfund law; (C) alleges
possible contamination of the environment by the Company or any
subsidiary; or (D) alleges possible contamination of the Real
Property.
(xxvii) The Company and its subsidiaries own or have the right
to use all patents, patent applications, trademarks, trademark
applications, tradenames, service marks, copyrights, franchises, trade
secrets, proprietary or other confidential information and intangible
properties and assets (collectively, "Intangibles") necessary to their
respective businesses as presently conducted or as the Prospectus
indicates the Company or such subsidiary proposes to conduct; to the
best knowledge of the Company, neither the Company nor any subsidiary
has infringed or is infringing, and neither the Company nor any
subsidiary has received notice of infringement with respect to,
asserted Intangibles of others; and, to the best knowledge of the
Company, there is no infringement by others of Intangibles of the
Company or any of its subsidiaries.
(xxviii) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a comparable cost, except as
disclosed in the Prospectus.
(xxix) Each of the Company and its subsidiaries makes and
keeps accurate books and records reflecting its assets and maintains
internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of the Company's consolidated financial statements in
accordance with generally accepted accounting principles and to
maintain accountability for the assets of the Company, (C) access to
the assets of the Company and each of its subsidiaries is permitted
only in accordance with management's authorization, and (D) the
recorded accountability for assets of the Company and each of its
subsidiaries is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(xxx) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distributions on such
- 9 -
10
subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary
of the Company, except as disclosed in the Prospectus.
(xxxi) The Company and its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed by them and have paid all taxes shown as due on such returns as
well as all other taxes, assessments and governmental charges that are
due and payable; and no deficiency with respect to any such return has
been assessed or proposed.
(xxxii) SkyWest Airlines, Inc. is a "citizen of the United
States" (as defined in Section 40102(a)(15) of Title 49 of the United
States Code, as amended) and is an air carrier operating under a
certificate of public convenience and necessity issued by the
Secretary of Transportation pursuant to Section 41102 of Xxxxx 00,
Xxxxxx Xxxxxx Code. There is in force with respect to SkyWest
Airlines, Inc. an air carrier operating certificate issued by the
Federal Aviation Administration pursuant to 14 C.F.R. Part 119.
(xxxiii) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(xxxiv) The conditions for use of a Registration Statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions
contemplated by this Agreement and the Registration Statement.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) the Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase
from the Company and each Selling Stockholder, at a purchase price of
$_________ per share, the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Shares to be sold by the Company as set forth opposite their respective names
in Schedule II hereto by a fraction, the numerator of which is the aggregate
number of Firm Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule I hereto, and the denominator of which
is the aggregate number of Firm Shares to be purchased by the Underwriters from
the Company hereunder, and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at the purchase price per share set forth in
clause (a) of this Section 2, that portion of the number of Optional Shares as
to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares that such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in
- 10 -
11
Schedule I hereto and the denominator of which is the maximum number of the
Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election in whole or in part from time to time up to 210,000 Optional
Shares, at the purchase price per share set forth in clause (a) in the
paragraph above, for the sole purpose of covering over-allotments in the sale
of Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from you to the Company, given from time to time within a
period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as hereinafter defined) or, unless you
and the Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice. In the event you elect to purchase
all or a portion of the Optional Shares, the Company agrees to furnish or cause
to be furnished to you the certificates, letters and opinions, and to satisfy
all conditions, set forth in Section 7 hereof at each Subsequent Time of
Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by you
of the release of the Shares, the several Underwriters propose to offer the
Shares for sale upon the terms and conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive
form for the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as The Xxxxxxxx-Xxxxxxxx Company,
LLC may request upon at least 48 hours' prior notice to the Company shall be
delivered by or on behalf of the Company to you for the account of such
Underwriter, against payment by such Underwriter on its behalf of the purchase
price therefor by official bank check or checks (payable in next day funds)
drawn on an Atlanta, Georgia bank, payable to the order of the Company in next
day available funds. The closing of the sale and purchase of the Shares shall
be held at the offices of King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, except that physical delivery of such certificates shall be made
at the office of The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, at 10:00 a.m., Atlanta time, on the third full
business day after the execution of this Agreement or at such other time and
date as you and the Company may agree upon in writing, and, with respect to the
Optional Shares, at 10:00 a.m., Atlanta time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase all
or part of such Optional Shares, or at such other time and date as you and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery," such time and date for
delivery of the Optional Shares, if not the First Time of Delivery, is herein
called a "Subsequent Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." The Company will make such
certificates available for checking and packaging at least 24 hours prior to
each Time of Delivery at the office of the office of The Depository Trust
Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
- 11 -
12
at such other location in New York, New York specified by you in writing at
least 48 hours prior to such Time of Delivery.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Underwriters:
(i) If the Registration Statement has been declared
effective prior to the execution and delivery of this Agreement, the
Company will file either (A) the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable
and if consented to by you, subparagraph (4)) of Rule 424(b) or (B) a
Term Sheet with the Commission pursuant to and in accordance with Rule
434 not later than the earlier of (1) the second business day
following the execution and delivery of this Agreement or (2) the
fifth business day after the date on which the Registration Statement
is declared effective. The Company will advise you promptly of any
such filing pursuant to Rule 424(b) or Rule 434. The Company will file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering,
sale and distribution of the Shares.
(ii) The Company will not file with the Commission the
Prospectus or the amendment referred to in the second sentence of
Section 1(a)(i) hereof, any amendment or supplement to the Prospectus,
any Term Sheet, any amendment to the Registration Statement or any
Rule 462(b) Registration Statement unless you have received a
reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its best
efforts to cause any such amendment to the Registration Statement to
be declared effective as promptly as possible. Upon the request of the
Representatives or counsel for the Underwriters, the Company will
promptly prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, any amendments to the
Registration Statement or any amendments or supplements to the
Prospectus or any Term Sheet that may be necessary or advisable in
connection with the distribution of the Shares by the several
Underwriters and will use its best efforts to cause any such amendment
to the Registration Statement to be declared effective as promptly as
possible. If required, the Company will file any amendment or
supplement to the Prospectus or any Term Sheet with the Commission in
the manner and within the time period required by Rule 424(b) and Rule
434, as applicable, under the Act. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time
when the Original Registration Statement or any amendment thereto or
any Rule 462(b) Registration Statement has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence to the Representatives of each
such filing or effectiveness.
- 12 -
13
(iii) The Company will advise you promptly after receiving
notice or obtaining knowledge of (A) the issuance by the Commission of
any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or
any part thereof or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (B) the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, or (C) any request
made by the Commission or any securities authority of any other
jurisdiction for amending the Original Registration Statement or any
Rule 462(b) Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its
best efforts to prevent the issuance of any such stop order and, if
any such stop order is issued, to obtain the withdrawal thereof as
promptly as possible.
(iv) If the delivery of a prospectus relating to the Shares
is required under the Act at any time prior to the expiration of nine
months after the date of the Prospectus and if at such time any events
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading, or if for any reason it is necessary during
such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus to comply with the Act or the Exchange Act or the
respective rules and regulations thereunder, the Company will promptly
notify you and upon your request (but at the Company's expense)
prepare and file with the Commission an amendment or supplement to the
Prospectus or any such incorporated document that corrects such
statement or omission or effects such compliance and will furnish
without charge to each Underwriter and to any dealer in securities as
many copies of such amended or supplemented Prospectus as you may from
time to time reasonably request. If the delivery of a prospectus
relating to the Shares is required under the Act at any time nine
months or more after the date of the Prospectus, upon your request but
at the expense of such Underwriter, the Company will prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act. Neither your consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 7.
(v) The Company promptly from time to time will take such
action as you may reasonably request to qualify the Shares for
offering and sale under the securities or blue sky laws of such
jurisdictions as you may request and will continue such qualifications
in effect for as long as may be necessary to complete the distribution
of the Shares, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
(vi) The Company will promptly provide you, without charge,
(A) three manually executed copies of the Original Registration
Statement and any Rule 462(b) Registration
- 13 -
14
Statement as originally filed with the Commission and of each
amendment thereto, including all documents or information incorporated
by reference therein, (B) for each other Underwriter a conformed copy
of the Original Registration Statement and any Rule 462(b)
Registration Statement as originally filed and of each amendment
thereto, without exhibits but including all documents or information
incorporated by reference therein, and (C) so long as a prospectus
relating to the Shares is required to be delivered under the Act, as
many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as you may reasonably request.
(vii) As soon as practicable, but in any event not later
than the last day of the thirteenth month after the later of the
effective date of the Original Registration Statement and any Rule
462(b) Registration Statement, the Company will make generally
available to its security holders an earnings statement of the Company
and its subsidiaries, if any, covering a period of at least 12 months
beginning after the later of the effective date of the Original
Registration Statement and any Rule 462(b) Registration Statement
(which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations thereunder.
(viii) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without your prior written consent,
offer, pledge, issue, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of (or announce any offer, pledge, sale,
grant of an option to purchase or other disposition), directly or
indirectly, any shares of Common Stock or securities convertible into,
exercisable or exchangeable for, shares of Common Stock, except as
provided in Section 2 and except for the issuance of Common Stock upon
the exercise of stock options outstanding on the date of this
Agreement to the extent that such stock options or warrants are
disclosed in the Prospectus.
(ix) During a period of five years from the later of the
effective date of the Original Registration Statement or any Rule
462(b) Registration Statement, the Company will furnish to you and,
upon request, to each of the other Underwriters, without charge, (A)
copies of all reports or other communications (financial or other)
furnished to shareholders, (B) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange, and (C) such
additional information concerning the business and financial condition
of the Company and its subsidiaries, if any, as you may reasonably
request.
(x) Neither the Company nor any of its officers, directors
or affiliates will (i) take, directly or indirectly, prior to the
termination of the underwriting syndicate contemplated by this
Agreement, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of, the Shares
or (iii) pay or agree to pay
- 14 -
15
to any person any compensation for soliciting another to purchase any
other securities of the Company.
(xi) The Company will apply the net proceeds from the
offering in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xii) The Company will cause the Shares to be listed on the
Nasdaq National Market at each Time of Delivery and for at least one
year from the date hereof.
(xiii) If at any time during the period beginning on the date
the Registration Statement becomes effective and ending on the later
of (A) the date 30 days after such effective date and (B) the date
that is the earlier of (1) the date on which the Company first files
with the Commission a Quarterly Report on Form 10-Q after such
effective date and (2) the date on which the Company first issues a
quarterly financial report to shareholders after such effective date,
any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in your reasonable 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 an amendment of or supplement to the Prospectus), the
Company will, after written notice from you advising the Company to
the effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(xiv) If the Company elects to rely upon Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 promulgated under the Act by the earlier
of (i) 10:00 P.M. Eastern time on the date of this Agreement and (ii)
the time confirmations are sent or given, as specified by Rule
462(b)(2).
6. EXPENSES. The Company will pay all costs and expenses incident to
the performance of this Agreement, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated pursuant to Section 10
hereof, including without limitation all costs and expenses incident to (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and, if applicable,
filing of the Original Registration Statement (including all amendments
thereto), any Rule 462(b) Registration Statement, any Preliminary Prospectus,
the Prospectus and any amendments and supplements thereto, this Agreement and
any blue sky memoranda; (ii) the delivery of copies of the foregoing documents
to the Underwriters; (iii) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Shares; (iv) the
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Shares, including transfer agent's and registrar's fees; (v) the
qualification of the Shares for offering and sale under state securities and
blue sky laws, including filing fees and fees and disbursements of counsel for
the Underwriters relating thereto; (vi) any
- 15 -
16
listing of the Shares on the Nasdaq National Market and (vii) any expenses for
travel, lodging and meals incurred by the Company and any of its officers,
directors and employees in connection with any meetings with prospective
investors in the Shares. It is understood, however, that, except as provided in
this Section 6, Section 8 and Section 10 hereof, the Underwriters will pay all
of their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of such Time of Delivery, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) If the Original Registration Statement as amended to date
has not become effective prior to the execution of this Agreement,
such Original Registration Statement and, if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have been declared effective not later than the earlier of (i) 11:00
a.m., Atlanta time, on the date of this Agreement, and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2), or,
with respect to the Original Registration Statement such later date
and/or time as shall have been consented to by you in writing. The
Prospectus and any amendment or supplement thereto or a Term Sheet
shall have been filed with the Commission pursuant to Rule 424(b) or
Rule 434, as applicable, within the applicable time period prescribed
for such filing and in accordance with Section 5 of this Agreement; no
stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement, respectively, or any part
thereof shall have been issued and no proceedings for that purpose
shall have been instituted, threatened or, to the knowledge of the
Company and the Representatives, contemplated by the Commission; and
all requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction.
(b) King & Spalding, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to the incorporation of the Company, the
validity of the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as
you may reasonably request, and the Company shall have furnished to
such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(c) You shall have received an opinion, dated such Time of
Delivery, of Parr, Waddoups, Xxxxx, Xxx & Xxxxxxxx, counsel for the
Company in form and substance satisfactory to you and your counsel, to
the effect that:
- 16 -
17
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the
corporate power and authority to own or lease its properties
and conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement
and perform its obligations hereunder. The Company is duly
qualified to transact business as a foreign corporation and
is in good standing under the laws of each other jurisdiction
in which it owns or leases property, or conducts any
business, so as to require such qualification, except where
the failure to so qualify would not have a material adverse
effect on the financial position, results of operations or
business of the Company and its subsidiaries.
(ii) Each of the subsidiaries of the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to
own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus.
Each such subsidiary is duly qualified to transact business
as a foreign corporation and is in good standing under the
laws of each other jurisdiction in which it owns or leases
property, or conducts any business, so as to require such
qualification, except where the failure to so qualify would
not subject them to any material liability or disability.
(iii) The Company's authorized, issued and
outstanding capital stock is as disclosed in the Prospectus.
All of the issued shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Common
Stock contained in the Prospectus. None of the issued shares
of capital stock of the Company or any of its subsidiaries
has been issued or is owned or held in violation of any
preemptive rights of shareholders, and no person or entity
(including any holder of outstanding shares of capital stock
of the Company or its subsidiaries) has any preemptive or
other rights to subscribe for any of the Shares.
(iv) All of the issued shares of capital stock of
each of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable, and are
owned beneficially by the Company free and clear of all
liens, security interests, pledges, charges, encumbrances,
shareholders' agreements, voting trusts, defects, equities or
claims of any nature whatsoever. Other than the subsidiaries
disclosed in the Prospectus, the Company does not own,
directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest
in any partnership, joint venture, limited liability company
or other association.
(v) Except as disclosed in the Prospectus, there
are no outstanding (A) securities or obligations of the
Company or any of its subsidiaries convertible
- 17 -
18
into or exchangeable for any capital stock of the Company or
any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such
subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of
the Company or any such subsidiary to issue any shares of
capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or
options.
(vi) The Shares to be issued and sold by the
Company have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will
be validly issued and fully paid and nonassessable and will
conform to the description of the Common Stock contained in
the Prospectus; the certificates evidencing the Shares comply
with all applicable requirements of Utah law; the Shares have
been listed on the Nasdaq National Market.
(vii) Except as disclosed in the Prospectus, there
are no 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 any such right has been
effectively waived) or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act.
(viii) All offers and sales of the Company's capital
stock prior to the date hereof were at all relevant times
duly registered under the Act or exempt from the registration
requirements of the Act by reason of Sections 3(b), 4(2) or
4(6) thereof and were duly registered or the subject of an
available exemption from the registration requirements of the
applicable state securities or blue sky laws.
(ix) Neither the Company nor any of its
subsidiaries is, or with the giving of notice or passage of
time or both, would be, in violation of its Articles of
Incorporation or Bylaws or in default under any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any such
subsidiary is a party or to which any of their respective
properties or assets is subject.
(x) The issue and sale of the Shares being issued
at such Time of Delivery and the performance of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the
giving of notice or the passage of time or both) 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, lease or other agreement or instrument
to which the Company or any such subsidiary is a party or to
which any of their respective properties or assets is
- 18 -
19
subject, nor will such action conflict with or violate any
provision of the Articles of Incorporation or Bylaws of the
Company or any of its subsidiaries or any statute, rule or
regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective
properties or assets.
(xi) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good
title to all personal property owned by them, in each case
free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and defects except such as
are disclosed in the Prospectus or such as do not materially
and adversely affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company or any
of its subsidiaries are held by the Company or such
subsidiary under valid, subsisting and enforceable leases
with such exceptions as are disclosed in the Prospectus or
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the
Company or such subsidiary.
(xii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or
filing with, any court or governmental agency or body is
required for the issue and sale of the Shares or the
consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the
Act and such as may be required under state securities or
blue sky laws in connection with the offer, sale and
distribution of the Shares by the Underwriters.
(xiii) To such counsel's knowledge and other than as
disclosed in or contemplated by the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or
informal) or investigation pending or threatened (or any
basis therefor) in which the Company or any of its
subsidiaries is a party or of which any of their respective
properties or assets is the subject which, if determined
adversely to the Company or any such subsidiary, would
individually or in the aggregate have a material adverse
effect on the financial position, results of operations or
business of the Company and its subsidiaries; and, to such
counsel's knowledge, neither the Company nor any of its
subsidiaries is in violation of, or in default with respect
to, any statute, rule, regulation, order, judgment or decree,
except as described in the Prospectus, nor is the Company or
any subsidiary required to take any action in order to avoid
any such violation or default.
(xiv) This Agreement has been duly authorized,
executed and delivered by the Company.
- 19 -
20
(xv) The Registration Statement, any Rule 462(b)
Registration Statement and the Prospectus and each amendment
or supplement thereto (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion), as of their respective effective or
issue dates, complied as to form in all material respects
with the requirements of the Act and the Exchange Act and the
respective rules and regulations thereunder. The descriptions
in the Registration Statement and the Prospectus of statutes,
legal and governmental proceedings or contracts and other
documents are accurate and fairly present the information
required to be shown; and such counsel do not know of any
statutes or legal or governmental proceedings required to be
described in the Registration Statement, any Rule 462(b)
Registration Statement or Prospectus that are not described
as required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(xvi) Each of the Registration Statement and any
Rule 462(b) Registration Statement is effective under the
Act; any required filing of the Prospectus or any Term Sheet
pursuant to Rule 424(b) or Rule 434, as applicable, has been
made in the manner and within the time period required by
Rule 424(b) or Rule 434, as applicable; and no stop order
suspending the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement, respectively, or any
part thereof has been issued and, to such counsel's
knowledge, no proceedings for that purpose have been
instituted or threatened or are contemplated by the
Commission.
(xvii) The Company is not, and will not be as a
result of the consummation of the transactions contemplated
by this Agreement, an "investment company," or a company
"controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940.
(xviii) If the Company elects to rely upon Rule 434,
the Prospectus is not "materially different", as such term is
used in Rule 434, from the prospectus included in the
Registration Statement at the time of its effectiveness or an
effective post-effective amendment thereto (including such
information that is permitted to be omitted pursuant to Rule
430A).
Such counsel shall also state that they have no reason to
believe that the Registration Statement, or any further amendment
thereto made prior to such Time of Delivery, on its effective date and
as of such time of Delivery, contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its
issue date and as of such Time of Delivery, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
- 20 -
21
therein, in light of the circumstances under which they were made, not
misleading (provided that such counsel need express no belief
regarding the financial statements and related schedules and other
financial data contained in the Registration Statement, any amendment
thereto, or the Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem proper, on
certificates of responsible officers of the Company and public
officials.
(d) You shall have received from Xxxxxx Xxxxxxxx LLP
letters dated, respectively, the date hereof (or, if the Registration
Statement has been declared effective prior to the execution and
delivery of this Agreement, dated such effective date and the date of
this Agreement) and each Time of Delivery, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto. In the
event that the letters referred to in this Section 7(d) set forth any
changes, decreases or increases in the items specified in paragraph
(iv) of Annex I, it shall be a further condition to the obligations of
the Underwriters that (i) such letters shall be accompanied by a
written explanation by the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (ii)
such changes, decreases or increases do not, in your sole judgment,
make it impracticable or inadvisable to proceed with the purchase,
sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as
of the date of such letter.
(e) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor any of its
subsidiaries shall have sustained (i) any loss or interference with
their respective businesses from fire, explosion, flood, hurricane 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 disclosed in or contemplated by the Prospectus, or (ii) any
change, or any development involving a prospective change (including
without limitation a change in management or control of the Company),
in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and its
subsidiaries, otherwise than as disclosed in or contemplated by the
Prospectus, the effect of which, in either such case, is in your
judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the
Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(f) Subsequent to the date hereof there shall not have
occurred any of the following: (i) any suspension or limitation in
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or in the
Common Stock by the Commission or the Nasdaq Stock Market; (ii) a
moratorium on commercial banking activities in New York declared by
either federal or state authorities; or (iii) any outbreak or
escalation of hostilities involving the United States, declaration by
- 21 -
22
the United States of a national emergency or war or any other national
or international calamity or emergency if the effect of any such event
specified in this clause (iv) in your judgment makes it impracticable
or inadvisable to proceed with the purchase, sale and delivery of the
Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) The Company shall have furnished to you at such Time of
Delivery certificates of officers of the Company, satisfactory to you
as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (e) of this Section 7, and as to such
other matters as you may reasonably request.
(h) The Shares shall have been approved for inclusion in
the Nasdaq National Market.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement made by the Company in Section
1 of this Agreement; (ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or (B) any application or other document, or any amendment
or supplement thereto, executed by 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 association or securities exchange
(each an "Application"); or (iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any Rule 462(b)
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or any Application in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use therein. The Company
acknowledges that the statements set forth under the heading "Underwriting" in
the Prospectus constitute the only
- 22 -
23
information relating to an Underwriter furnished in writing to the Company by
any Underwriter specifically for use therein. The Company will not, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter
from all liability arising out of such claim, action, suit or proceeding (or
related cause of action or portion thereof).
(b) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto or any Application or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through you expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party); provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnified party shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party. After such notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation,
- 23 -
24
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, which separate counsel shall be designated by the
Representatives in the case of indemnity arising under paragraph (a) of this
Section 8 or (ii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
Nothing in this Section 8(c) shall preclude an indemnified party from
participating at its own expense in the defense of any such action so assumed
by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) 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 Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), 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. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company 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 contributions pursuant to this subsection (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 in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were
- 24 -
25
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which 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 Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in its
obligation to purchase Shares at a Time of Delivery, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on
the terms contained herein. If within thirty-six (36) hours after such default
by any Underwriter you do not arrange for the purchase of such Shares, the
Company shall be entitled to a further period of thirty-six (36) hours within
which to procure another party or other parties satisfactory to you to purchase
such Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Shares, or the Company notifies you that they have so arranged for the
purchase of such Shares, you or the Company shall have the right to postpone a
Time of Delivery for a period of not more than seven days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in your opinion may thereby be made necessary. The cost of
preparing, printing and filing any such amendments shall be paid for by the
Underwriters. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of
Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
- 25 -
26
10. TERMINATION. (a) This Agreement may be terminated with respect to
the Firm Shares or any Optional Shares in the sole discretion of the
Representatives by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that
(i) any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused
or been unable to deliver the Shares or to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
to such Time of Delivery, in either case other than by reason of a default by
any of the Underwriters. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the Underwriters upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Shares. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in Section 9(a), the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh of the aggregate number of Shares to be
purchased at such Time of Delivery, or if the Company shall not exercise the
right described in Section 9(b) to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to a Subsequent Time of Delivery, the obligations
of the Underwriters to purchase and of the Company to sell the Optional Shares)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers, and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person
referred to in Section 8(e) or the Company or any officer or director or
controlling person of the Company referred to in Section 8(e), and shall
survive delivery of and payment for the Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to you in care of The Xxxxxxxx-Xxxxxxxx Company, LLC, 0000
Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Corporate Finance
Department (with a copy to King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, Attention: Xxxx X. Xxxxxx III); and if sent to the Company,
shall be mailed, delivered or telegraphed and confirmed in writing to the
Company at the address set forth in the Registration Statement, Attention:
Secretary (with a copy to Parr, Waddoups, Xxxxx, Gee &
- 26 -
27
Xxxxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx Xxxx, Xxxx 00000,
Attention: Xxxxxxx X. Xxxxx).
13. REPRESENTATIVES. You will act for the several Underwriters
in connection with the transactions contemplated by this Agreement, and any
action under this Agreement taken by you jointly or by The Xxxxxxxx-Xxxxxxxx
Company, LLC will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters and the Company to the extent
provided in Sections 8 and 10 hereof, the officers and directors and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia without giving
effect to any provisions regarding conflicts of
laws.
16. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
- 27 -
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and
upon the acceptance hereof by The Xxxxxxxx-Xxxxxxxx Company, LLC, on behalf of
each of the Underwriters, this letter will constitute a binding agreement among
the Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Master Agreement among Underwriters, a copy of which shall be
submitted to the Company for examination, upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
SKYWEST, INC.
By:
-------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
Atlanta, Georgia.
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
SBC WARBURG DILLON READ INC.
By: The Xxxxxxxx-Xxxxxxxx Company, LLC
By:
------------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
- 28 -
29
SCHEDULE I
Number of
Optional Shares
Total Number of to be Purchased if
Firm Shares to be Maximum Option
Underwriter Purchased Exercised
----------- --------- ---------
The Xxxxxxxx-Xxxxxxxx Company, LLC
SBC Warburg Dillon Read Inc. --------- ---------
Total.........................................
========= =========
30
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx LLP shall furnish letters to the Underwriters to the effect
that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning the Act
and the applicable published rules and regulations thereunder;
(ii) in their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus and the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations thereunder;
(iii) the financial statements of the Company as of and for the
nine-month period ended December 31, 1997 were reviewed by them in
accordance with the standards established by the American Institute of
Certified Public Accountants and based upon their review they are not
aware of any material modifications that should be made to such
financial statements for them to be in conformity with generally
accepted accounting principles, and such financial statements comply
as to form in all material respects with the applicable accounting
requirements of the Act and the applicable rules and regulations
thereunder;
(iv) On the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company
and its consolidated subsidiaries, a reading of the unaudited amounts
for revenues and total and per share amounts of net income for the
nine months ended December 31, 1997 and of the unaudited consolidated
financial statements of the Company and its consolidated subsidiaries
for the periods from which such amounts are derived, limited
procedures, not constituting an audit in accordance with generally
accepted auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a
reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for
financial accounting matters and such other inquiries and procedures
as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange
Act and the related published rules and regulations
thereunder or are not in conformity with generally accepted
principles applied on a basis substantially consistent with
that of the audited consolidated financial statements
included in the Registration Statement and the Prospectus;
A-1
31
(B) the unaudited amounts for revenues and total and per
share amounts of net income included in the Registration
Statement and the Prospectus do not agree with the amounts
set forth in the unaudited consolidated financial statements
for those same periods or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the corresponding
amounts in the audited consolidated financial statements
included in the Registration Statement and the Prospectus;
and
(C) as of a specified date not more than 5 days prior to
the date of such letter, there were any changes in the
capital stock (other than the issuance of capital stock upon
exercise of employee stock options that were outstanding on
the date of the latest balance sheet included in the
Prospectus) or any increase in inventories or the long-term
debt or short-term debt of the Company and its subsidiaries,
or any decreases in net current assets or net assets or other
items specified by the Representatives, or any increases in
any other items specified by the Representatives, in each
case as compared with amounts shown in the latest balance
sheet included in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus
discloses have occurred or may occur, or which are described
in such letter; and
(D) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (C) there were any decreases in
revenues or operating income or the total or per share
amounts of net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur, or which are described in such letter; and
(v) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraph
(iv) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives that are included or
incorporated by reference in the Registration Statement and the
Prospectus, or which appear in Part II of, or in exhibits or schedules
to, the Registration Statement and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement.
References to the Registration Statement and the Prospectus
in this Annex I shall include any amendment or supplement thereto at
the date of such letter.
A-2
