SUPERIOR ENERGY SERVICES, INC.
(A DELAWARE CORPORATION)
COMMON STOCK
UNDERWRITING AGREEMENT
DATED: DECEMBER ___, 1997
SUPERIOR ENERGY SERVICES, INC.
UNDERWRITING AGREEMENT
December ___, 1997
XXXXXXX XXXX & COMPANY L.L.C.
XXXXXX XXXXXX & COMPANY, INC.
XXXXXX, XXXXXXX INC.
As Representatives of the Several
Underwriters Named in Schedule A hereto
c/o Johnson Rice & Company L.L.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
Superior Energy Services, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A
(collectively, the "Underwriters") an aggregate of 3,900,000 shares of Common
Stock, par value $0.001 per share (the "Common Stock"), of the Company (the
"Firm Company Shares") and the persons named on Schedule B hereto (the "Selling
Stockholders") propose to sell to the Underwriters an aggregate of 2,100,000
shares of Common Stock (the "Firm Selling Stockholder Shares"). The Firm
Company Shares and the Firm Selling Stockholder Shares are collectively referred
to herein as the "Firm Shares". The Firm Shares are to be sold to each
Underwriter, acting severally and not jointly, in such amounts as are set forth
in Schedule A opposite the name of such Underwriter.
The Selling Stockholders also grant to the Underwriters the option described
in Section 3 to purchase, on the same terms as the Firm Shares, up to 900,000
additional shares of Common Stock (the "Option Shares") solely to cover over-
allotments. The Firm Shares, together with all or any part of the Option
Shares, are collectively herein called the "Shares."
Section 1. Representations and Warranties of the Company The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) registration statement on Form S-3 (File No. 333-______) with respect to
the Shares, including a preliminary form of prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the applicable rules and regulations (the "1933
Act Regulations") of the Securities and Exchange Commission (the "Commission"),
and has been filed with the Commission; and such amendments to such registration
statement as may have been required prior to the date hereof have been filed
with the Commission, and such amendments have been similarly
prepared. Copies of such registration statement and amendment or amendments and
of each related preliminary prospectus, and the exhibits, financial statements
and schedules, as amended and revised, have been delivered to you. The Company
has prepared in the same manner, and proposes so to file with the Commission,
one of the following: (i) prior to effectiveness of such registration statement,
a further amendment thereto, including the form of final prospectus, (ii) if the
Company does not rely on Rule 434 of the 1933 Act, a final prospectus in
accordance with Rules 430A and 424(b) of the 1933 Act Regulations or (iii) if
the Company relies on Rule 434 of the 1933 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
424(b) of the 1933 Act. The Company also may file a related registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act for the
purpose of registering certain additional shares of Common Stock, which
registration statement will be effective upon filing with the Commission. As
filed, such amendment, any registration statement filed pursuant to Rule 462(b)
of the 1933 Act and any term sheet and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information (as defined below) and,
except to the extent that you shall agree in writing to a modification, shall be
in all respects in the form furnished to you prior to the date and time that
this Agreement was executed and delivered by the parties hereto, or, to the
extent not completed at such date and time, shall contain only such specific
additional information and other changes (beyond that contained in the latest
preliminary prospectus) as the Company shall have previously advised you in
writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes effective
and, in the event any post-effective amendment thereto becomes effective prior
to the Closing Time (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall also include
all Rule 430A Information contained in any Prospectus and any Term Sheet (as
hereinafter defined) and deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the 1933 Act Regulations. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean (a) if the Company relies on Rule 434 of the
1933 Act Regulations, the Term Sheet relating to the Shares that is first filed
pursuant to Rule 424(b)(7) of the 1933 Act Regulations, together with the
Preliminary Prospectus identified therein that such Term Sheet supplements or
(b) if the Company does not rely on Rule 434 of the 1933 Act Regulations, the
prospectus relating to the Shares in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations or, if no
filing pursuant to Rule 424(b) of the 1933 Act Regulations is required, shall
mean the form of final prospectus included in the Registration Statement at the
time such Registration Statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted pursuant to Rule 430A of the 1933 Act Regulations to be
omitted from the Registration
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Statement when it becomes effective. The term "462(b) Registration Statement"
means any registration statement filed with the Commission pursuant to Rule
462(b) under the 1933 Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
registration statement becomes effective). The term "Term Sheet" means any term
sheet that satisfies the requirements of Rule 434 of the 1933 Act Regulations.
Any reference to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet.
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and no proceedings for that purpose have been
instituted or threatened by the Commission or the state securities or blue sky
authority of any jurisdiction, and each Preliminary Prospectus and any amendment
or supplement thereto, at the time of filing thereof, conformed in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations, and
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter expressly
for use in the Registration Statement or any 462(b) Registration Statement.
(c) When the Registration Statement and any 462(b) Registration Statement
shall become effective, when any Term Sheet that is part of the Prospectus is
filed with the Commission pursuant to Rule 434, when any Prospectus is first
filed pursuant to Rule 424(b) of the 1933 Act Regulations, when any amendment to
the Registration Statement or any 462(b) Registration Statement becomes
effective, and when any supplement to the Prospectus or any Term Sheet is filed
with the Commission and at the Closing Time and Date of Delivery (as hereinafter
defined), (i) the Registration Statement, the 462(b) Registration Statement, the
Prospectus, the Term Sheet and any amendments thereof and supplements thereto
will conform in all material respects with the applicable requirements of the
1933 Act and the 1933 Act Regulations, and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term Sheet nor
any amendment or supplement thereto will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter expressly for use in the
Registration Statement or any 462(b) Registration Statement.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware with all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company is duly
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qualified to transact business as a foreign corporation and is in good standing
in each of the jurisdictions in which the ownership or leasing of its properties
or the nature or conduct of its business as described in the Registration
Statement and the Prospectus requires such qualification, except where the
failure to do so would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company and the Subsidiaries (as hereinafter defined) taken as a whole.
(e) All of the Company's subsidiaries are named on an exhibit to the
Registration Statement (each a "Subsidiary" and collectively the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the state
of its incorporation with all requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement and the Prospectus. Each such entity is duly qualified to
do business and is in good standing as a foreign corporation in each other
jurisdiction in which the ownership or leasing of its properties or the nature
or conduct of its business as described in the Registration Statement and the
Prospectus conducted requires such qualification, except where the failure to do
so would not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of such
Subsidiaries.
(f) The Company has full corporate right, power and authority to enter into
this Agreement, to issue, sell and deliver the Shares as provided herein and to
consummate the transactions contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws of general applicability
relating to or affecting creditors' rights, or by general principles of equity
whether considered at law or at equity and except to the extent enforcement of
the indemnification provisions set forth in Section 8 of this Agreement may be
limited by federal or state securities laws or the public policy underlying such
laws.
(g) Each consent, approval, authorization, order, license, certificate,
permit, registration, designation or filing by or with any governmental agency
or body necessary for the valid authorization, issuance, sale and delivery of
the Shares, the execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby has been
made or obtained and is in full force and effect, except as may be required
under applicable state securities laws.
(h) Neither the issuance, sale and delivery by the Company of the Shares,
nor the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby will conflict with or
result in a breach or violation of any of the terms and provisions of, or (with
or without the giving of notice or the passage of time or both) constitute a
default under the charter or bylaws of the Company or the Subsidiaries,
respectively, or under any indenture, mortgage, deed of trust, loan agreement,
note, lease or
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other agreement or instrument to which the Company or the Subsidiaries,
respectively, is a party or to which the Company or the Subsidiaries,
respectively, any of their respective properties or other assets is subject; or
any applicable statute, judgment, decree, order, rule or regulation of any court
or governmental agency or body applicable to any of the foregoing or any of
their respective properties; or result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Company or
the Subsidiaries, respectively.
(i) The Shares to be issued and sold to the Underwriters hereunder have been
validly authorized by the Company. When issued and delivered against payment
therefor as provided in this Agreement, the Shares will be duly and validly
issued, fully paid and nonassessable. No preemptive rights of shareholders
exist with respect to any of the Shares which have not been satisfied or waived.
No person or entity holds a right to require or participate in the registration
under the 1933 Act of the Shares pursuant to the Registration Statement which
has not been satisfied or waived; and, except as set forth in the Prospectus, no
person holds a right to require registration under the 1933 Act of any shares of
Common Stock of the Company at any other time which has not been satisfied or
waived.
(j) 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 Company's capital stock
contained in the Prospectus.
(k) All of the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and are owned directly or indirectly through another Subsidiary 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, 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 or
other association.
(l) Except as disclosed in the Prospectus, there are no outstanding (i)
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, (ii) 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 (iii) obligations of
the Company or any such Subsidiary to issue any shares of capital stock, any
such convertible or exchangeable securities or obligation, or any such warrants,
rights or options.
(m) The Company and the Subsidiaries have good and marketable title 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
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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 the Subsidiaries; and any real
property and buildings held under lease by the Company or any Subsidiary are
held under valid, existing 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.
(n) The financial statements of the Company and its consolidated
Subsidiaries included in the Registration Statement and Prospectus present
fairly the financial position of the Company and its consolidated Subsidiaries
as of the dates indicated and the results of operations and cash flows for the
Company and its consolidated Subsidiaries for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statements of Stabil Drill Specialities, Inc. ("Stabil
Drill") included in the Registration Statement and Prospectus present fairly the
financial position of Stabil Drill as of the dates indicated and the results of
operations and cash flows for Stabil Drill for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statements of Sub-Surface Tools, Inc. ("Sub-Surface")
included in the Registration Statement and Prospectus present fairly the
financial position of Sub-Surface as of the dates indicated and the results of
operations and cash flows for Sub-Surface for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules included in the Registration Statement
and the historical financial amounts in the Prospectus under the captions
"Prospectus Summary -- Summary Consolidated Financial Data", "Capitalization"
and "Selected Consolidated Financial Data" fairly present the information shown
therein and have been compiled on a basis consistent with the historical
financial statements included in the Registration Statement and the Prospectus.
The unaudited pro forma financial information (including the related notes)
included in the Prospectus or any Preliminary Prospectus complies as to form in
all material respects to the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable. Such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents with respect
to the Company and the Subsidiaries, the financial position, results of
operations and other information purported to be shown therein at the respective
dates and for the respective periods specified.
(o) KPMG Peat Marwick L.L.P., who have examined and are reporting upon the
audited financial statements and schedules of the Company, Stabil Drill and Sub-
Surface included in the Registration Statement, are, and were during the periods
covered by their reports included in the Registration Statement and the
Prospectus, independent public accountants within the meaning of the 1933 Act
and the 1933 Act Regulations.
(p) None of the Company or the Subsidiaries has sustained, since December
31, 1996, any material loss or interference with its business from fire,
explosion, flood, hurricane,
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accident or other calamity, whether or not covered by insurance, or from any
labor dispute or arbitrators' or court or governmental action, order or decree;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as otherwise stated in the
Registration Statement and Prospectus, there has not been (i) any material
change in the capital stock, long-term debt, obligations under capital leases or
short-term borrowings of the Company, or the Subsidiaries, or (ii) any material
adverse change, or any development which could reasonably be seen as involving a
prospective material adverse change, in or affecting the business, prospects,
properties, assets, results of operations or condition (financial or other) of
the Company or the Subsidiaries.
(q) Neither the Company nor its Subsidiaries is in violation of its
respective charter, or by-laws, and no default exists, and no event has
occurred, nor state of facts exists, which, with notice or after the lapse of
time to cure or both, would constitute a default in the due performance and
observance of any obligation, agreement, term, covenant, consideration or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any such entity is a party
or to which any such entity or any of its properties is subject. None of the
Company or its Subsidiaries is in violation of, or in default with respect to,
any statute, rule, regulation, order, judgment or decree, except as may be
properly described in the Prospectus or such as in the aggregate do not now have
and will not in the future have a material adverse effect on the financial
position, results of operations or business of each such entity, respectively.
(r) There is not pending or threatened any action, suit, proceeding, inquiry
or investigation against the Company, the Subsidiaries or any of their
respective officers and directors or to which the properties, assets or rights
of any such entity are subject, before or brought by any court or governmental
agency or body or board of arbitrators that is required to be described in the
Registration Statement or the Prospectus but is not described as required.
(s) The descriptions in the Registration Statement and the Prospectus of the
contracts, leases and other legal documents therein described present fairly the
information required to be shown, and there are no contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required.
(t) The Company owns, possesses or has obtained all material permits,
licenses, franchises, certificates, consents, orders, approvals and other
authorizations of governmental or regulatory authorities or other entities as
are necessary to own or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted, or as contemplated in the
Prospectus to be conducted, and the Company has not received any notice of
proceedings relating to revocation or modification of any such licenses,
permits, franchises, certificates, consents, orders, approvals or
authorizations.
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(u) The Company owns or possesses adequate license or other rights to
use all patents, trademarks, service marks, trade names, copyrights, software
and design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively "Intangibles") necessary to entitle
the Company to conduct its business as described in the Prospectus, and the
Company has not received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could materially and adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and, none of the Company, the Subsidiaries, or any employee or
agent thereof, has made any payment of funds of the Company or the Subsidiaries,
or received or retained any funds and no funds of the Company or the
Subsidiaries have been set aside to be used for any payment, in each case in
violation of any law, rule or regulation.
(w) Each of the Company and the Subsidiaries has filed on a timely basis all
necessary federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown as
due thereon; and no tax deficiency has been asserted against any such entity,
nor does any such entity know of any tax deficiency which is likely to be
asserted against any such entity which if determined adversely to any such
entity, could materially adversely affect the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of any such
entity, respectively. All tax liabilities are adequately provided for on the
respective books of such entities.
(x) The Company and its Subsidiaries maintain insurance (issued by insurers
of recognized financial responsibility) of the types and in the amounts
generally deemed adequate for their respective businesses and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(y) Each of the Company, the Subsidiaries, and their officers, directors or
affiliates has not taken and will not take, directly or indirectly, any action
designed to, or that
8
might reasonably be expected to, cause or result in or constitute the
stabilization or manipulation of any security of the Company or to facilitate
the sale or resale of the Shares.
(z) The Company is not, will not become as a result of the transactions
contemplated hereby, or will not conduct its respective businesses in a manner
in which the Company would become, "an investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
Section 2. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders represents and warrants to, and agrees with,
each of the several Underwriters and the Company that:
(a) Such Selling Stockholder has duly executed and delivered this Agreement
and this Agreement constitutes the valid and binding agreement of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws of general applicability
relative to or affecting creditors' rights generally or by general principles of
equity whether considered at law or equity and except to the extent enforcement
of the indemnification provisions set forth in Section 8 of this Agreement may
be limited by federal or state securities laws or the public policy underlying
such laws.
(b) 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 sale of the Shares to be sold by such Selling
Stockholder or the consummation of the transactions contemplated by this
Agreement, except the registration of such Shares under the 1933 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 such Shares by the Underwriters.
(c) The sale of the Shares to be sold by such Selling Stockholder 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 such
Selling Stockholder is a party or to which any of its properties or assets is
subject, nor will such action conflict with or violate any provision of the
charter or bylaws of such Selling Stockholder or any statute, rule or regulation
or any order, judgment or decree of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or any of such Selling
Stockholder's properties or assets.
9
(d) Such Selling Stockholder has good and valid title to the Shares to
be sold by such Selling Stockholder hereunder, free and clear of all liens,
security interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature whatsoever; and,
upon delivery of such Shares against payment therefor as provided herein, good
and valid title to such Shares, free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever, will pass to the several
Underwriters.
(e) Such Selling Shareholder has not taken, and will not take, directly or
indirectly, any action that is designed to, or that might reasonably be expected
to, cause or result in or constitute the stabilization or manipulation of any
security of the Company or to facilitate the sale or resale of the Shares.
Section 3. Sale and Delivery of the Shares to the Underwriters; Closing
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Selling Stockholders
agrees to sell to each of the Underwriters the number of Firm Selling
Stockholder Shares set forth opposite the name of such Selling Stockholder under
the caption "Number of Firm Shares to be Sold" in Schedule B, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, at the Closing Time (as defined below), the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A (the
proportion which each Underwriter's share of the total number of the Firm Shares
bears to the total number of Firm Shares is hereinafter referred to as such
Underwriter's "underwriting obligation proportion"), at a purchase price of
$_____ per share.
(b) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Selling
Stockholders hereby grant an option to the Underwriters to purchase, severally
and not jointly, up to an additional 900,000 Option Shares at the same purchase
price as shall be applicable to the Firm Shares. In the event that the
Underwriters exercise such option for the full number of Option Shares, each
Selling Stockholder will sell to the Underwriter the number of Option Shares set
forth opposite the name of such Selling Stockholder under the caption "Number of
Option Shares to be Sold" in Schedule B. In the event that the Underwriters
exercise such option for 772,494 Option Shares or less, then Xxxxxxx X. Xxxx
shall sell to the Underwriters such number of Option Shares. In the event that
the Underwriters exercise such option for more than 772,494 Option Shares but
less than the full number of Option Shares, (i) Xxxxxxx X. Xxxx shall sell to
the Underwriters 772,494 Option Shares and (ii) the Selling Stockholders
(including Xxxxxxx X. Xxxx) shall sell to the Underwriters a number of Option
Shares equal to the difference between the number of Option Shares as to which
the Underwriters have exercised such option and 772,494 (the "Remaining
Exercised Option Shares"), with each such other Selling Stockholder to sell that
number of Option Shares as shall be equal to his proportionate
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share of Remaining Exercised Option Shares as determined by the relation by
which the number of Option Shares set forth opposite the name of such Selling
Stockholder bears to 127,506. The option hereby granted will expire if not
exercised within the thirty (30) day period after the date of the Prospectus by
giving written notice to the Company. The option granted hereby may be exercised
in whole or in part (but not more than once) by you, as representatives of the
Underwriters, only for the purpose of covering over-allotments that may be made
in connection with the offering and distribution of the Firm Shares. The notice
of exercise shall set forth the number of Option Shares as to which the several
Underwriters are exercising the option, and the time and date of payment
therefor and of issuance and delivery thereof. Such time and date of payment,
issuance and delivery (the "Date of Delivery") shall be determined by you but
shall not be later than three full business days after the exercise of such
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Option Shares, the Option Shares as to which the
option is exercised shall be purchased by the Underwriters, severally and not
jointly, in their respective underwriting obligation proportions.
(c) Payment of the purchase price for and delivery of certificates in
definitive form representing the Firm Shares shall be made at the offices of
Xxxxxxx Rice & Company L.L.C., 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxx 00000 or at such other place as shall be agreed upon by the Company
and you, at 10:00 a.m. New York time, either (i) on the third full business day
after the execution of this Agreement, or (ii) at such other time not more than
ten full business days thereafter as you and the Company shall determine
(unless, in either case, postponed pursuant to the term hereof), (such date and
time of payment and delivery being herein called the "Closing Time"). In
addition, in the event that any or all of the Option Shares are purchased by the
Underwriters, payment of the purchase price for and delivery of certificates in
definitive form representing the Option Shares shall be made at the offices of
Xxxxxxx Xxxx & Company L.L.C. in the manner set forth above, or at such other
place as the Company and you shall determine, on the Date of Delivery as
specified in the notice from you to the Company and the Selling Stockholders.
Payment for the Firm Shares and the Option Shares shall be made to the Company
and the Selling Stockholders by wire transfer in same-day funds to the accounts
designated to the Underwriters in writing by the Company against delivery to you
for the respective accounts of the Underwriters of the Shares to be purchased by
them.
(d) The certificates representing the Shares to be purchased by the
Underwriters shall be in such denominations and registered in such names as you
may request in writing at least two full business days before the Closing Time
or the Date of Delivery, as the case may be. The certificates representing the
Shares will be made available at the offices of Xxxxxxx Rice & Company L.L.C. or
at such other place as Xxxxxxx Xxxx & Company L.L.C. may designate for
examination and packaging not later than 10:00 a.m. New York time at least one
full business day prior to the Closing Time or the Date of Delivery, as the case
may be.
11
(e) After the Registration Statement becomes effective, you intend to
offer the Shares to the public as set forth in the Prospectus, but after the
initial public offering of such Shares you may in your discretion vary the
public offering price.
Section 4. Certain Covenants of the Company. The Company covenants
and agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (if not yet effective at the date and time that
this Agreement is executed and delivered by the parties hereto). If the Company
elects to rely upon Rule 430A of the 1933 Act Regulations or the filing of the
Prospectus is otherwise required under Rule 424(b) of the 1933 Act Regulations,
the Company will comply with the requirements of Rule 430A and will file the
Prospectus, properly completed, pursuant to the applicable provisions of Rule
424(b), or a Term Sheet pursuant to and in accordance with Rule 434, within the
time period prescribed. If the Company elects to rely upon Rule 462(b), the
Company shall file a 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time on the date of
this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee. The Company will notify
you immediately, and confirm the notice in writing, (i) when the Registration
Statement, 462(b) Registration Statement or any post-effective amendment to the
Registration Statement, shall have become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission to
amend the Registration Statement or 462(b) Registration Statement or amend or
supplement the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any 462(b) Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or
of the institution or threatening of any proceeding for any such purposes. The
Company will use every reasonable effort to prevent the issuance of any such
stop order or of any order preventing or suspending such use and, if any such
order is issued, to obtain the withdrawal thereof at the earliest possible
moment.
(b) The Company will not at any time file or make any amendment to the
Registration Statement, or any amendment or supplement (i) to the Prospectus, if
the Company has not elected to rely upon Rule 430A, (ii) if the Company has
elected to rely upon Rule 430A, to either the Prospectus included in the
Registration Statement at the time it becomes effective or to the Prospectus
filed in accordance with Rule 424(b) or any Term Sheet filed in accordance with
Rule 434, or (iii) if the Company has elected to rely upon Rule 462(b), to any
462(b) Registration Statement in any case if you shall not have previously been
advised and furnished a copy thereof a reasonable time prior to the proposed
filing, or if you or counsel for the Underwriters shall object to such amendment
or supplement.
12
(c) The Company has furnished or will furnish to you, at its expense,
as soon as available, four copies of the Registration Statement as originally
filed and of all amendments thereto, whether filed before or after the
Registration Statement becomes effective, copies of all exhibits and documents
filed therewith and signed copies of all consents and certificates of experts,
as you may reasonably request, and has furnished or will furnish to each
Underwriter, one conformed copy of the Registration Statement as originally
filed and of each amendment thereto.
(d) The Company will deliver to each Underwriter, at the Company's expense,
from time to time, as many copies of each Preliminary Prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will deliver
to each Underwriter, at the Company's expense, as soon as the Registration
Statement shall have become effective and thereafter from time to time as
requested during the period when the Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Prospectus (as supplemented or
amended) as each Underwriter may reasonably request. The Company will comply to
the best of its ability with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue of the
Prospectus or any Term Sheet in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which
the Prospectus or any Term Sheet 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 when such Prospectus or any Term Sheet is delivered,
not misleading, or, if for any reason it shall be necessary during such same
period to amend or supplement the Prospectus or any Term Sheet in order to
comply with the 1933 Act or the rules and regulations thereunder, the Company
will notify you and upon your request prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus or any Term Sheet or a
supplement to the Prospectus or any Term Sheet or an amendment or supplement to
any such incorporated document which will correct such statement or omission or
effect such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus or any Term Sheet, 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 or any Term Sheet complying with Section 10(a)(3) of the
1933 Act.
(e) The Company will use its best efforts to qualify the Shares for offering
and sale under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications in effect
for as long as may be necessary to complete the distribution of the Shares;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation
13
in any jurisdiction in which it is not so qualified or to make any undertakings
in respect of doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be required by
the laws of each jurisdiction in which the Shares have been qualified as above
provided.
(f) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the 1933 Act
Regulations), an earnings statement (in reasonable detail but which need not be
audited) complying with the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder.
(g) The Company will use the net proceeds received by it from the sale of
the Shares in the manner specified in the Prospectus under the caption "Use of
Proceeds."
(h) During a period of five years after the date hereof, the Company will
furnish to you: (i) concurrently with furnishing to its securityholders, copies
of any statements of operations of the Company for each of the first three
quarters furnished to the Company's securityholders; (ii) concurrently with
furnishing to its securityholders, a balance sheet of the Company as of the end
of such fiscal year, together with statements of operations, of cash flows and
of securityholders' equity of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent public accountants;
(iii) as soon as they are available, copies of all reports (financial or
otherwise) mailed to securityholders; (iv) as soon as they are available, copies
of all reports and financial statements furnished to or filed with the
Commission, any securities exchange or the National Association of Securities
Dealers, Inc. (the "NASD"); (v) every material press release in respect of the
Company or its affairs which is released by the Company; and (vi) any additional
information of a public nature concerning the Company or its business that you
may reasonably request. During such five-year period, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company are consolidated with any subsidiaries, and shall be accompanied by
similar financial statements for any significant subsidiary that is not so
consolidated.
(i) During the period beginning from the date hereof and continuing to and
including the date 120 days after the date of the Prospectus, the Company will
not, without the prior written consent of Xxxxxxx Rice & Company L.L.C. 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 any option
to purchase or other disposition of, directly or indirectly, any shares of
Common Stock or securities convertible into, exercisable for or exchangeable for
shares of Common Stock, except as provided in Section 2 of this Agreement,
pursuant to the Company's 1991 Stock Incentive Plan or 1995 Stock Incentive Plan
or in connection with acquisitions of businesses or assets by the Company.
14
(j) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.
(k) The Company will cause the Shares to be listed, subject to notice of
issuance, on the Nasdaq Stock Market and will use commercially reasonable best
efforts to maintain the listing of the Shares on the Nasdaq Stock Market.
(l) The Company is familiar with the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder, and has in the past conducted
its affairs, and will in the future conduct its affairs, in such a manner so as
to ensure that the Company was not and will not be an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(m) The Company will not, and will use its best efforts to cause its
officers, directors and affiliates not to, (i) take, directly or indirectly
prior to termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, 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
to any person any compensation for soliciting any order to purchase any other
securities of the Company.
(n) If at any time during the 30-day period after the Registration Statement
becomes effective, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your 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 a
supplement to or amendment of the Prospectus) and after written notice from you
advising the Company to the effect set forth above, the Company agrees to
consult with you concerning the substance and dissemination of a press release
or other public statement responding to or commenting on such rumor, publication
or event.
Section 5. Covenants of the Selling Stockholders. The Selling
Stockholders covenant and agree with each of the Underwriters that the Selling
Stockholders will not, in violation of Regulation M of the 1934 Act Regulations,
(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 to or
agree to pay any person any compensation for soliciting another to purchase any
other securities of the Company.
15
Section 6. Payment of Expenses. The Company will pay and bear all
costs, fees and expenses incident to the performance of its obligations under
this Agreement (excluding fees and expenses of counsel for the Underwriters,
except as specifically set forth below), including (a) the preparation,
printing, filing and distribution of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, the
Preliminary Prospectuses, the Prospectus and any Term Sheet and any amendments
or supplements thereto, and the cost of furnishing copies thereof to the
Underwriters, (b) the preparation, printing and distribution of this Agreement,
the certificates representing the Shares, the memoranda relating to compliance
with state securities laws ("Blue Sky Memoranda") and any instruments relating
to any of the foregoing, (c) the issuance and delivery of the Shares to the
Underwriters, including any transfer taxes payable upon the sale of the Shares
to the Underwriters (other than transfer taxes on resales by the Underwriters),
(d) the fees and disbursements of the Company's counsel and accountants, (e) the
qualification of the Shares under the applicable state securities laws in
accordance with the terms of this Agreement, including filing fees and fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Memoranda, (f) all costs, fees
and expenses in connection with the notification to the Nasdaq Stock Market of
the proposed issuance of the Shares, (g) filing fees relating to the review of
the offering by the NASD, (h) the transfer agent's and registrar's fees and all
miscellaneous expenses referred to in Part II of the Registration Statement, (i)
costs related to travel and lodging incurred by the Company and its
representatives relating to meetings with and presentations to prospective
purchasers of the Shares reasonably determined by the Underwriters to be
necessary or desirable to effect the sale of the Shares to the public, and (j)
all other costs and expenses incident to the performance of the Company's
obligations hereunder (including costs incurred in closing the purchase of the
Option Shares, if any) that are not otherwise specifically provided for in this
section. The Company, upon your request, will provide funds in advance for
filing fees in connection with "blue sky" qualifications.
If the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 7 hereof
is not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of default by any of the Underwriters, the Company will reimburse the
Underwriters severally on demand for all reasonable out-of-pocket expenses,
including fees and disbursements of Underwriters' counsel, reasonably incurred
by the Underwriters in reviewing the Registration Statement and the Prospectus,
and in investigating and making preparations for the marketing of the Shares.
Section 7. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase and pay for (i) the Firm Shares that they have
respectively agreed to purchase pursuant to this Agreement (and any Option
Shares as to which the option granted in Section 3 has been exercised and the
Date of Delivery determined by you is the same as the Closing Time) at the
Closing Time and (ii) the Option Shares at the Date of Delivery of the Option
Shares, are subject to
16
the accuracy of the representations and warranties of the Company contained
herein as of the Closing Time or the Date of Delivery, as the case may be, and
to the accuracy of the representations and warranties of the Company contained
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date of this Agreement or, with your consent, at a later time
and date not later, however, than 5:30 p.m. New York time on the first business
day following the date hereof, or at such later time or on such later date as
you may agree to in writing; if the Company has elected to rely upon Rule
462(b), the 462(b) Registration Statement shall have become effective by 10:00
p.m. New York time, Washington, D.C. time, on the date of this Agreement; and at
the Closing Time no stop order suspending the effectiveness of the Registration
Statement or any 462(b) Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or shall
be pending or, to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the satisfaction of
counsel for the Underwriters. If the Company has elected to rely upon Rule 430A,
a Prospectus or a Term Sheet containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a favorable opinion of
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., counsel for the
Company, dated as of the Closing Time, together with signed or reproduced copies
of such opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
the corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and
the Prospectus. The Company is qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions in which
the ownership or leasing of the Company's properties or the nature or
conduct of its business requires such qualification, except where the
failure to do so would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(ii) Each of the Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of its
17
incorporation. Each such entity has all requisite corporate power and
authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement and the Prospectus. Each such
entity is duly qualified to do business and is in good standing as a
foreign corporation in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business requires
such qualification, except where the failure to do so would not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(iii) The Company has the corporate power and authority to enter into this
Agreement, to issue, sell and deliver the Shares as provided herein and
to consummate the transactions contemplated herein. This Agreement has
been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Underwriters,
constitutes a valid and binding agreement of the Company, enforceable in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
laws affecting creditors' rights or by general principles of equity
whether considered at law or in equity, except to the extent that
enforcement of the indemnification provisions set forth in Section 6 of
this Agreement may be limited by federal or state securities laws or the
public policy underlying such laws and except that no opinion need be
expressed as to the effect of the first sentence of Section 13 of this
Agreement as to the laws of the State of Louisiana.
(iv) Each consent, approval, authorization, order, license, certificate,
permit, registration, designation or filing by or with any governmental
agency or body necessary for the valid authorization, issuance, sale and
delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions
contemplated hereby, has been made or obtained and is in full force and
effect, except such as may be necessary under state securities laws or
required by the NASD in connection with the purchase and distribution of
the Shares by the Underwriters, as to which such counsel need express no
opinion.
(v) Neither the issuance, sale and delivery by the Company of the Shares, nor
the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby will conflict with
or result in a breach or violation of any of the terms and provisions of,
or (with or without the giving notice or the passage of time or both)
constitute a default under, (i) the charter or by-laws of the Company or
the Subsidiaries, respectively, or, to such counsel's knowledge after due
inquiry, under any indenture, mortgage, deed of trust, loan agreement,
note, lease or other
18
agreement or instrument to which the Company or the Subsidiaries,
respectively, is a party or to which the Company or the Subsidiaries,
respectively, any of their respective properties or other assets, is
subject, (ii) to such counsel's knowledge, any applicable statute,
judgment, decree, order, rule or regulation of any court or governmental
agency or body, or (iii) to such counsel's knowledge, result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or the Subsidiaries, respectively.
(vi) The Common Stock conforms in all material respects as to legal matters to
the description thereof contained in the Registration Statement and the
Prospectus under the heading "Description of Capital Stock."
(vii) The Shares to be issued and sold to the Underwriters hereunder have been
validly authorized by the Company. When issued and delivered against
payment therefor as provided in this Agreement, such shares will be
validly issued, fully paid and nonassessable. To such counsel's
knowledge, no preemptive rights of shareholders exist with respect to any
of the Shares which have not been satisfied or waived. To such counsel's
knowledge, no person or entity holds a right to require or participate in
the registration under the 1933 Act of the Shares pursuant to the
Registration Statement which has not been satisfied or waived and, except
as set forth in the Prospectus, no person holds a right to require
registration under the 1933 Act of any shares of Common Stock of the
Company at any other time which has not been satisfied or waived. The
form of certificates evidencing the Shares complies with all applicable
requirements of Louisiana law.
(viii) The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization." All of the issued shares
of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable. None of the issued shares of
capital stock of the Company has been issued or is owned or held in
violation of any preemptive rights of shareholders.
(ix) All of the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and, to such counsel's knowledge after due inquiry, are
owned directly, or indirectly through another Subsidiary, 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 except security interests disclosed in
the Prospectus. To such counsel's knowledge after due inquiry, other than
the Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other
19
corporation or any ownership interest in any partnership, joint venture
or other association.
(x) Except as disclosed in the Prospectus, to such counsel's knowledge after
due inquiry, there are no outstanding (i) 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, (ii)
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 (iii) obligations of the
Company or any such Subsidiary to issue any shares of capital stock, any
such convertible or exchangeable securities or obligation, or any such
warrants, rights or options.
(xi) Neither the Company nor its Subsidiaries is in violation of their
respective charter or by-laws, and, to such counsel's knowledge after due
inquiry, no material default exists, and no event has occurred nor state
of facts exist which, with notice or after the lapse of time to cure or
both, would constitute a material default in the due performance and
observance of any obligation, agreement, term, covenant, or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any such entity is
a party or to which any such entity or any of its properties is subject.
(xii) To such counsel's knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation against the Company,
the Subsidiaries or any of their respective officers and directors or to
which the properties, assets or rights of any such entity are subject,
before or brought by any court or governmental agency or body or board of
arbitrators, that is required to be described in the Registration
Statement or the Prospectus but is not described as required.
(xiii) The descriptions in the Registration Statement and the Prospectus of the
contracts, leases and other legal documents therein described present
fairly the information required to be shown and there are no contracts,
leases or other documents known to such counsel of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which are not described
or filed as required.
(xiv) The Common Stock has been approved for trading on the Nasdaq Stock
Market.
20
(xv) The Registration Statement and any 462(b) Registration Statement have
become effective under the 1933 Act and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement or any 462(b) Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending or
contemplated under the 1933 Act. Other than financial statements and
other financial and operating data and schedules contained therein, as to
which counsel need express no opinion, the Registration Statement, any
462(b) Registration Statement, all Preliminary Prospectuses, the
Prospectus and any amendment or supplement thereto, appear on their face
to conform as to form in all material respects with the requirements of
the 1933 Act and the rules and regulations thereunder.
(xvi) The Company is not, or solely as a result of the consummation of the
transactions contemplated hereby will not become, an "investment
company," or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as amended.
(xvii) The descriptions in the Prospectus of statutes, regulations, legal or
governmental proceedings are accurate and present fairly a summary of the
information required to be shown under the 1933 Act and the 1933 Act
Regulations. The information in the Prospectus under the caption "Shares
Available for Future Sale" to the extent that it constitutes matters of
law or legal conclusions, has been reviewed by such counsel, is correct
and presents fairly the information required to be disclosed therein
under the 1933 Act and the 1933 Act Regulations.
Such counsel also shall state that they have no reason to believe that the
Registration Statement, any 462(b) Registration Statement or any further
amendment thereto made prior to the Closing Time or the Date of Delivery, as the
case may be, on its effective date and as of the Closing Time or the Date of
Delivery, as the case may be, 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 the
Closing Time or the Date of Delivery, as the case may be, as of its issue date
and as of the Closing Time or the Date of Delivery, as the case may be,
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
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 462(b) Registration Statement, any amendment
thereto, or the Prospectus, or any amendment or supplement thereto).
21
In rendering the opinions set forth in Section 7(b), such counsel may rely
on the following:
(A) as to matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such opinion, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel familiar with the applicable laws, and
(B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officers or departments of various jurisdictions having custody of
documents respecting the existence or good standing of the Company, provided
that copies of all such opinions, statements or certificates shall be delivered
to Underwriters' counsel.
The opinion of counsel for the Company shall state that the opinion of any other
counsel, or certificate or written statement, on which such counsel is relying
is in form satisfactory to such counsel and their belief that you and they are
justified in relying thereon.
(c) At the Closing Time, you shall have received a favorable opinion of
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., counsel for the
Selling Stockholders, dated as of the Closing Time, together with signed or
reproduced copies of such opinion for each of the Underwriters in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) This Agreement has been duly executed and delivered by each of the Selling
Stockholders, the sale of the Shares to be sold by the Selling Stockholders
at such Closing Time 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 material indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any
of the Selling Stockholders is a party or to which any of their respective
properties or assets is subject, nor will such action conflict with or
violate any statute, rule or regulation or any order, judgment or decree of
any court or governmental agency or body having jurisdiction over any of
the Selling Stockholders or any of the Selling Stockholders' properties or
assets.
22
(ii) 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 being sold
by the Selling Stockholders or the consummation of the transactions
contemplated by this Agreement, except the registration of such 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 such Shares
by the Underwriters.
(iii) Each of the Selling Stockholders has good and valid title to the Shares
being sold by such Selling Stockholder hereunder, free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any nature
whatsoever; and, upon delivery of such Shares against payment therefor as
provided herein, good and valid title to such Shares, free and clear of
all liens, security interests, pledges, charges, encumbrances, defects,
stockholders' agreements, voting trusts, equities or claims of any nature
whatsoever, will pass to the several Underwriters.
In rendering the opinions set forth in Section 7(c), such counsel may rely
on the following:
(1) as to matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such opinion, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel familiar with the applicable laws, and
The opinion of counsel for the Selling Stockholders, shall state that the
opinion of any other counsel, or certificate or written statement, on which such
counsel is relying is in form satisfactory to such counsel and that you and they
are justified in relying thereon.
(d) At the Closing Time, you shall have received a favorable opinion from
Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated as of the Closing
Time, with respect to the incorporation of the Company, the issuance and sale of
the Shares, the Registration Statement, the Prospectus and other related matters
as the Underwriters may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the purpose of
enabling them to pass on such matters.
(e) At the Closing Time, (i) the Registration Statement, any 462(b)
Registration Statement, and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and
23
the 1933 Act Regulations; the Company shall have complied in all material
respects with Rule 430A (if it shall have elected to rely thereon) and neither
the Registration Statement, any 462(b) Registration Statement, nor the
Prospectus, as they may then be amended or supplemented, shall contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
there shall not have been, since the respective dates as of which information is
given in the Registration Statement, any material adverse change in the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company, whether or not arising in the ordinary
course of business, (iii) no action, suit or proceeding at law or in equity
shall be pending or, to the best of Company's knowledge, threatened against the
Company that would be required to be set forth in the Prospectus other than as
set forth therein and no proceedings shall be pending or, to the best knowledge
of the Company, threatened against the Company before or by any federal, state
or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding could materially adversely affect the business,
prospects, assets, results of operations or condition (financial or otherwise)
of the Company, other than as set forth in the Prospectus, (iv) the Company
shall have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied pursuant to this Agreement at or prior to the
Closing Time, and (v) the representations and warranties of the Company set
forth in Section 1 shall be accurate as though expressly made at and as of the
Closing Time. At the Closing Time, you shall have received a certificate
executed by the President and Chief Financial Officer of the Company dated as of
the Closing Time, to such effect and with respect to the following additional
matters: (A) the Registration Statement has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of the Prospectus has been issued, and no
proceedings for that purpose have been instituted or are pending or, to the best
of their knowledge, threatened under the 1933 Act; and (B) they have reviewed
the Registration Statement and the Prospectus and, when the Registration
Statement and any 462(b) Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate, the
Registration Statement, any 462(b) Registration Statement and the Prospectus and
any amendments or supplements thereto contained all statements and information
required to be included therein or necessary to make the statements therein not
misleading and neither the Registration Statement, any 462(b) Registration
Statement, nor the Prospectus nor any amendment or supplement thereto included
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and, since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended or supplemented
Prospectus that has not been so set forth.
(f) You shall have received from KPMG Peat Marwick L.L.P. 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 the Closing Time and the
Date 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
24
subsection set forth any changes, decreases or increases in the items specified
in paragraph (iii) 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
Underwriters 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 as contemplated by
the Registration Statement, as amended as of the date of such letter.
(g) At the Closing Time, you shall have received from KPMG Peat Marwick
L.L.P. a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) above, except that the specified date
referred to shall be a date not more than five days prior to the Closing Time.
(h) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may request
for the purpose of enabling them to pass upon the issuance and sale of the
Shares as contemplated in this Agreement and the matters referred to in Section
7(d) and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the performance of any
of the covenants of the Company, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company at or prior to the
Closing Time in connection with the authorization, issuance and sale of the
Shares as contemplated in this Agreement shall be reasonably satisfactory in
form and substance to you and to counsel for the Underwriters. The Company will
furnish you with such number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
(i) The NASD, upon review of the terms of the public offering of the Shares,
shall not have objected to such offering, such terms or the Underwriters'
participation in the same.
(j) Subsequent to the date hereof, there shall not have occurred any of the
following: (i) there has occurred or accelerated any outbreak of hostilities or
other national or international calamity or crisis or change in economic or
political conditions the effect on the financial markets of the United States is
such as to make it, in your judgment, impracticable to market the Shares or
enforce contracts for the sale of the Shares, or (ii) trading in any securities
of the Company has been suspended by the Commission or by the Nasdaq Stock
Market, or if trading generally on the New York Stock Exchange or in the over-
the-counter market has been suspended, or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or by order of the Commission or any other governmental authority,
or (iii) there has been any downgrading in the rating of any of the Company's
debt securities or preferred stock by any "nationally recognized statistical
25
rating organization" (as defined for purposes of Rule 436(g) under the 1933
Act), or (iv) a banking moratorium has been declared by federal or New York or
Tennessee authorities, or (v) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which in your reasonable opinion materially
adversely affects or will materially adversely affect the business or operations
of the Company, or (vi) any action has been taken by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
reasonable opinion has a material adverse effect on the securities markets in
the United States.
(k) Prior to the date of the execution of this Agreement, the Company shall
have furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from each executive officer and director of the Company and
from each person who beneficially owns five percent or more of the Company's
outstanding Common Stock, addressed to the Representatives, in which each such
person agrees not to 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 any option to purchase or other disposition of, directly or indirectly, any
shares of Common Stock beneficially owned by such person or any securities
convertible into, exercisable for or exchangeable for shares of Common Stock for
a period of 120 days after the date of the Prospectus without the prior written
consent of Xxxxxxx Xxxx & Company L.L.C.; provided, however, that the foregoing
restrictions shall not apply to any gift of Common Stock to a donee who agrees
in writing for the benefit of the Underwriters to be bound by the foregoing
restrictions with respect to such shares of Common Stock.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party, except as provided in Section 6. Notwithstanding any such
termination, the provisions of Section 8 shall remain in effect.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery for
Option Shares of the conditions set forth in this Section 7, except that, if any
Date of Delivery for Option Shares is other than the Closing Time, the
certificates, opinions and letters referred to in paragraphs (b), (c) and (d)
shall be revised to reflect the sale of Option Shares.
Section 8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject under the 1933 Act, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the Registration
Statement, any 462(b) Registration Statement or the Prospectus, or any
26
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 (ii) arise out of or are based
upon the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement, any 462(b) Registration Statement, 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 or
defending 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 or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement or the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter expressly for use therein. The Company will also indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint and several, to which such Underwriter may become subject insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any breach of any warranty or covenant of the Company
contained herein. In addition to its other obligations under this Section 8(a),
the Company agrees that, as an interim measure during the pendency of any such
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 8(a), it will reimburse the Underwriters on a monthly
basis for all reasonable legal and other expenses incurred by the Underwriters
in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
of the Company to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction; provided, however, that the obligation of the
Company to make any such reimbursements shall be subject to receipt from the
Underwriters of an undertaking to return any such reimbursements to the extent
that is determined by a court of competent jurisdiction or an arbitrator
appointed in accordance with Section 8(e) that such indemnification of the
Underwriters by the Company is not permitted. Any such interim reimbursement
payments that are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the prime rate (or reference rate or other
commercial lending rate for borrowers of the highest credit standing) published
from time to time by The Wall Street Journal (the "Prime Rate") from the date of
such request. This indemnity agreement shall be in addition to any liabilities
that the Company may otherwise have. 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 action or claim or related
cause of action or portion of such cause of action in respect of which
indemnification may be
27
sought hereunder (whether or not such Underwriter is a party to such action or
claim), unless such settlement, compromise or consent includes an unconditional
release of such Underwriter from all liability arising out of such action or
claim (or related cause of action or portion thereof).
The indemnity agreement in this Section 8(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter within the meaning of the 1933 Act to the same
extent as such agreement applies to the Underwriters.
(b) Each Selling Stockholder will indemnify and hold harmless the Company
and each Underwriter against any losses, claims, damages or liabilities, to
which the Company or any Underwriter may become subject under the 1933 Act, or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (i) arise out of or are based upon any breach of any warranty
or covenant of such Selling Stockholder herein contained, (ii) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in (A) any Preliminary Prospectus, the Registration Statement,
any 462(b) Registration Statement or the Prospectus, or any amendment or
supplement thereto, or (B) any Application, or (iii) arise out of or are based
upon the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement, any 462(b) Registration Statement, 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 the Company and each Underwriter for any legal or
other expenses reasonably incurred by either the Company or such Underwriter, or
both, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that such Selling Stockholder
shall not be liable in any such case to the Underwriters to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement, or the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter expressly for use therein; provided, further, however, that (i) such
Selling Stockholder shall be liable hereunder in any case only to the extent of
the total net proceeds from the offering (before deducting expenses) received by
such Selling Stockholder from the Underwriters for the Shares sold by such
Selling Stockholder hereunder, unless any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any 462(b)
Registration Statement or any amendment or supplement 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 such Selling Stockholder expressly for use therein,
in which case such limitation of the liability of such Selling Stockholder shall
not apply. In addition to its other obligations under this Section 8(b), each
Selling Stockholder agrees that, as an interim measure during the pendency of
any such claim, action, investigation, inquiry or other
28
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 8(b), such Selling
Stockholder will reimburse the Company and the Underwriters on a monthly basis
for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of such Selling Stockholder's obligation to
reimburse the Company or the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction; provided, however, that the obligation of such Selling
Stockholder to make any such reimbursements shall be subject to receipt from the
Company or the Underwriters, as the case may be, of an undertaking to return any
such reimbursements to the extent that it is determined by a court of competent
jurisdiction that such indemnification of the Company and the Underwriters by
such Selling Stockholder is not permitted. Any such interim reimbursement
payments that are not made to the Company or an Underwriter within 30 days of
receipt of a request for reimbursement, and all appropriate supporting
documentation, shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities that
the Selling Stockholders may otherwise have. The Selling Stockholders will not,
without the prior written consent of the Company and Xxxxxxx Rice & Company
L.L.C., as representative of the Underwriters, settle or compromise or consent
to the entry of any judgment in any pending or threatened action or claim or
related cause of action or portion of such cause of action in respect of which
indemnification may be sought hereunder (whether or not any of the Company or
any Underwriter is a party to such action or claim), unless such settlement,
compromise or consent includes an unconditional release of the Company and each
Underwriter from all liability arising out of such action or claim (or related
cause of action or portion thereof).
The indemnity agreement in this Section 9(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each of the officers
and directors of the Company and each Underwriter and each person, if any, who
controls the Company and any Underwriter within the meaning of the 1933 Act to
the same extent such indemnity agreement applies to the Company and the
Underwriters.
(c) Each Underwriter, severally but not jointly, will indemnify and hold
harmless the Company and the Selling Stockholders against any losses, claims,
damages or liabilities to which the Company may become subject, under the 1933
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any breach of any
warranty or covenant by such Underwriter herein contained or any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was
29
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Underwriter expressly
for use therein; and will reimburse the Company and the Selling Stockholders for
any legal or other expenses reasonably incurred by the Company or the Selling
Stockholders in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition to its other obligations under this
Section 8(c), the Underwriters agree that, as an interim measure during the
pendency of any such claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 8(c), they will reimburse the Company and
the Selling Stockholders on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of their
obligation to reimburse the Company and the Selling Stockholders for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim reimbursement
payments that are not made to the Company and the Selling Stockholders within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement shall be in addition to any
liabilities that the Underwriters may otherwise have. No Underwriter will,
without the prior written consent of the Company and the Selling Stockholders,
settle or compromise or consent to the entry of judgment in any pending or
threatened action or claim or related cause of action or portion of such cause
of action in respect of which indemnification may be sought hereunder (whether
or not the Company or the Selling Stockholders are parties to such action or
claim), unless such settlement, compromise or consent includes an unconditional
release of the Company and the Selling Stockholders from all liability arising
out of such action or claim (or related cause of action or portion thereof).
The indemnity agreement in this Section 8(c) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer and
director of the Company and each person, if any, who controls the Company within
the meaning of the 1933 Act to the same extent as such agreement applies to the
Company.
(d) Promptly after receipt by an indemnified party under subsection (a), (b)
or (c) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; no indemnification provided for in subsection (a), (b) or
(c) shall be available to any party who shall fail to give notice as provided in
this subsection (d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the omission so to notify the indemnifying
party will not relieve the indemnifying party from any liability that it may
have to any indemnified party otherwise than under Section 8. 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
30
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 (which consent shall not
be unreasonably withheld), be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, except that if the
indemnified party has been advised by counsel in writing that there are one or
more defenses available to the indemnified party which are different from or
additional to those available to the indemnifying party, then the indemnified
party shall have the right to employ separate counsel and in that event the
reasonable fees and expenses of such separate counsel for the indemnified party
shall be paid by the indemnifying party; provided, however, that if the
indemnifying party is the Company or a Selling Stockholder, the indemnifying
party shall only be obligated to pay the reasonable fees and expenses of a
single law firm (and any reasonably necessary local counsel) employed by all of
the indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(e) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Section 8(a), (b) and (c)
hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the National
Association of Securities Dealers, Inc. Any such arbitration must be commenced
by service of a written demand for arbitration or a written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 8(a), (b) and (c)
hereof and will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for expenses that is created by the provisions of
Sections 8(a), (b) and (c).
(f) In order to provide for just and equitable contribution in circumstances
under which the indemnity provided for in this Section 8 is for any reason
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
right of appeal) to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity incurred by the Company and the
Selling Stockholders, and one or more of the
31
Underwriters, as incurred, in such proportions that (a) the Underwriters are
responsible pro rata for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to the
public offering price (before deducting expenses) appearing thereon, and (b) the
Company and the Selling Stockholders are responsible for the balance, provided,
however, that no person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation; provided,
further, that if the allocation provided above is not permitted by applicable
law, the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, shall contribute to the aggregate losses in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. 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 to state a material fact relates to information supplied by the Company
or the Selling Stockholders, on the one hand, or by the Underwriters, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 8(f) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8(f). The
amount paid or payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending such action or claim. Notwithstanding the provisions of this
Section 8(f), (i) no Selling Stockholder shall be required to contribute any
amount in excess of the aggregate amount of net proceeds received by such
Selling Stockholder from the sale of Shares by such Selling Stockholder and (ii)
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 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. The
Underwriters' obligations in this Section 8(f) to contribute are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 8(f), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company, within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company
Section 9. Representations, Warranties and Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company, or its
32
officers, and the Selling Stockholders set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, the Selling Stockholders or
any Underwriter or controlling person, and with respect to an Underwriter, a
Selling Stockholder or the Company will survive delivery of and payment for the
Shares or termination of this Agreement.
Section 10. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to Sections 6 and 8
and, as to all other provisions, (i) if at the time of execution of this
Agreement the Registration Statement has not become effective, at 9:30 a.m. New
York, New York time on the first full business day following the effectiveness
of the Registration Statement, or (ii) if at the time of execution of this
Agreement the Registration Statement has been declared effective, at 9:30 a.m.
New York, New York time on the first full business day following the date of
execution of this Agreement; but this Agreement shall nevertheless become
effective at such earlier time after the Registration Statement becomes
effective as you may determine on and by notice to the Company and the Selling
Stockholders or by release of any of the Shares for sale to the public. For the
purposes of this Section 10, the Shares shall be deemed to have been so released
upon the release of publication of any newspaper advertisement relating to the
Shares or upon the release by you of telegrams (i) advising the Underwriters
that the Shares are released for public offering, or (ii) offering the Shares
for sale to securities dealers, whichever may occur first. By giving notice
before the time this Agreement becomes effective, you, as representative of the
several Underwriters, or the Company, may prevent this Agreement from becoming
effective, without liability of any party to any other party, except that the
Company shall remain obligated to pay costs and expenses to the extent provided
in Section 6 hereof and except that the provisions of Section 8 shall remain in
effect.
(b) You may terminate this Agreement, by notice to the Company and the
Selling Stockholders, at any time at or prior to the Closing Time (i) in
accordance with the penultimate paragraph of Section 7 of this Agreement, or
(ii) if there has been since the respective dates as of which information is
given in the Registration Statement, any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, prospects, management, properties, assets, results of operations or
condition (financial or otherwise) of the Company, whether or not arising in the
ordinary course of business, or (iii) if there has occurred or accelerated any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been suspended
by the Commission or by the Nasdaq Stock Market or if trading generally on the
New York Stock Exchange or in the over-the-counter market has been suspended, or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or the NASD or by order of the
33
Commission or any other governmental authority, or (v) if a banking moratorium
has been declared by federal or New York or Tennessee authorities, or (vi) any
federal or state statute, regulation, rule or order of any court or other
governmental authority has been enacted, published, decreed or otherwise
promulgated which in your reasonable opinion materially adversely affects or
will materially adversely affect the business or operations of the Company, or
(vii) any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the United
States.
(c) If this Agreement is terminated pursuant to this Section 10, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 6. Notwithstanding any such termination, the
provisions of Section 8 shall remain in effect.
Section 11. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time to purchase the Shares
that it or they are obligated to purchase pursuant to this Agreement (the
"Defaulted Securities"), you shall have the right, within 36 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 36-hour period, then:
(a) If the aggregate number of Firm Shares which are Defaulted Securities
does not exceed 10% of the aggregate number of Firm Shares to be purchased
pursuant to this Agreement, the non-defaulting Underwriters shall be obligated
to purchase the full amount thereof in the proportions that their respective
underwriting obligation proportions bear to the underwriting obligations of all
non-defaulting Underwriters, and
(b) If the aggregate number of Firm Shares which are Defaulted Securities
exceeds 10% of the aggregate number of Firm Shares to be purchased pursuant to
this Agreement, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section 11 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus that
may thereby be made necessary. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 11.
34
Section 12. Default by the Company. If the Company or any of the
Selling Stockholders shall fail at the Closing Time to sell and deliver the
aggregate number of Firm Shares that it is obligated to sell, then this
Agreement shall terminate without any liability on the part of any non-
defaulting party, except to the extent provided in Section 6 and except that the
provisions of Section 8 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company or any of
the Selling Stockholders from liability, if any, in respect to such default.
Section 13. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Johnson Xxxx & Company L.L.C.,
000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx
X. Xxxxx (with a copy sent in the same manner to Xxxxxxx & Xxxxx L.L.P., 0000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxx); notices
to the Company shall be directed to it at 0000 Xxxxxxxxx Xxxx, Xxxxx Xxxxxx,
Xxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx (with a copy of each notice to the
Company or to any Selling Stockholder sent in the same manner to Jones, Walker,
Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., 000 Xx. Xxxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx); and notices to the
Selling Stockholders shall be directed to them at their addresses specified for
them on the signature pages hereof.
Section 14. Parties. This Agreement is made solely for the benefit of
and is binding upon the Underwriters, the Selling Stockholders and the Company
and, to the extent provided in Section 8, any person controlling the Company,
the Selling Stockholders or any of the Underwriters, the officers and directors
of the Company, and their respective executors, administrators, successors and
assigns. Subject to the provisions of Section 8, no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include any purchaser, as such purchaser, from any of the
several Underwriters of the Shares.
All of the obligations of the Underwriters hereunder are several and not
joint.
Section 15. Governing Law and Time. This Agreement shall be governed
by the laws of the State of Louisiana. Specified time of the day refers to
United States Eastern Time. Time shall be of the essence of this Agreement.
Section 16. Counterparts. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by Xxxxxxx Rice & Company L.L.C., on behalf of each of the Underwriters,
this instrument will become a binding agreement
35
among the Company and the several Underwriters in accordance with its terms. 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 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,
SUPERIOR ENERGY SERVICES, INC.
By:
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
---------------------------------
Xxxxxxx X. Xxxx
[address]
---------------------------------
Xxxxxx X. Xxxxxx, Xx.
[address]
---------------------------------
Xxxxx X. Xxxxxxxxx
[address]
---------------------------------
Xxxxxxx X. Xxxxx
[address]
36
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above:
XXXXXXX RICE & COMPANY L.L.C.
XXXXXX XXXXXX & COMPANY, INC.
XXXXXX, XXXXXXX INC.
By:Xxxxxxx Rice & Company L.L.C.
By:
----------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
37
SCHEDULE A
Number of
Firm Shares
to be Purchased
---------------
Underwriter
-----------
Xxxxxxx Xxxx & Company L.L.C. _______________
Xxxxxx Xxxxxx & Company, Inc. _______________
Xxxxxx, Xxxxxxx Inc. _______________
TOTAL 6,000,000
===============
SCHEDULE B
Number of Number of
Name of Selling Firm Shares Option Shares
Stockholders To Be Sold To Be Sold
----------------------- ----------- -------------
Xxxxxxx X. Xxxx............................... 618,902 800,648
Xxxxx X. Xxxxxxxxx............................ 419,708 28,154
Xxxxxx X. Xxxxxx, Xx.......................... 418,068 28,044
Xxxxxxx X. Xxxxx.............................. 331,724 22,252
Xxxxx Xxxxx................................... 225,498 15,126
Xxxx Xxxxxx................................... 86,100 5,776
Total......................................... 2,100,000 900,000
========= =======
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, KPMG Peat
Marwick L.L.P. 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, with respect to Stabil Drill
Specialties, Inc. and with respect to Sub-Surface Tools, Inc. within the meaning
the 1933 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, the Registration
Statement and any 462(b) Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the related published rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus, 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 1933 Act and the related published
rules and regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) 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 options which 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 Underwriters, or any increases in any items specified by
the Underwriters, 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
(C) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (B) there
were any decreases in net sales or operating income or the total or per share
amounts of net income or other items specified by the Underwriters, or any
increases in any items specified by the Underwriters, in each case as compared
with the comparable period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in each case for
increases or decreases which the Prospectus discloses have occurred or may occur
which are described in such letter; and
(iv) 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 (iii) 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 Underwriters
which are derived from the general accounting records of the Company and its
subsidiaries, included in the Registration Statement and the Prospectus, or
which appear in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Underwriters, 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.
(v) On the basis of a reading of the unaudited pro forma consolidated
condensed financial statements included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would not necessarily
reveal matters of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma consolidated
condensed financial statements, nothing came to their attention that caused them
to believe that the unaudited pro forma consolidated condensed financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such statements.
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.
2
EXHIBIT A
December ___, 1997
Xxxxxxx Xxxx & Company L.L.C.
Xxxxxx Xxxxxx & Company, Inc.
Xxxxxx, Xxxxxxx Inc.
As Representatives of the
Several Underwriters
c/o Johnson Rice & Company L.L.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Gentlemen:
The undersigned understands that Superior Energy Services, Inc. (the
"Company"), a Delaware corporation, has filed a Registration Statement on Form
S-3 with the Securities and Exchange Commission in connection with a proposed
underwritten public offering (the "Offering") of shares of the Company's Common
Stock, $0.001 par value per share (the "Common Stock").
At the request of Xxxxxxx Xxxx & Company L.L.C., Xxxxxx Xxxxxx &
Company, Inc. and Xxxxxx, Xxxxxxx Inc., as representatives of the several
underwriters (the "Representatives") participating in the Offering, and in
consideration of the underwriters' participation in the Offering, the
undersigned hereby does agree that the undersigned will not, without the prior
written consent of Xxxxxxx Rice & Company L.L.C., directly or indirectly, 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 any option to purchase
or other disposition of, directly or indirectly, any shares of Common Stock or
any securities convertible into, exercisable for or exchangeable for shares of
Common Stock owned by the undersigned for a period of 120 days from the date of
the final prospectus relating to the Common Stock; provided, however, that the
foregoing restrictions shall not apply to any gift of shares of Common Stock to
a donee who agrees in writing for the benefit of the underwriters to be bound by
the foregoing restrictions with respect to such shares of Common Stock.
Sincerely,
