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VALLEY NATIONAL GASES, INC.
2,700,000 SHARES
COMMON STOCK
($.001 PAR VALUE)
UNDERWRITING AGREEMENT
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----------------------, 1997
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxxxxxx & Co., Inc.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Valley National Gases, Inc., a West
Virginia corporation (the "Company") and the persons listed on
Schedule I hereto (the "Selling Shareholders"), hereby address you
as the representatives (the "Representatives") of each of the
persons, firms and corporations listed on Schedule II hereto
(collectively, the "Underwriters") and hereby confirm their
agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to
issue and sell to the Underwriters 2,618,000 shares of its Common
Stock, par value $0.001 per share, and the Selling Shareholders
propose to sell to the Underwriters a total of 82,000 shares of the
Company's Common Stock, par value $0.001 per share, as set forth on
Schedule I hereto (such 2,700,000 shares of Common Stock are herein
referred to as the "Firm Shares"). Solely for the purpose of
covering over-allotments in the sale of the Firm Shares, the
Company further proposes to grant to the Underwriters the right to
purchase up to an additional 405,000 shares of the Company Common
Stock (the "Option Shares"), as provided in Section 3 of this
Agreement. The Firm Shares and the Option Shares are herein
sometimes referred to as the "Shares" and are more fully described
in the Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the
basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company agrees and each Selling Shareholder agrees,
severally and not jointly, to sell to the Underwriters, and each
such Underwriter agrees, severally and not jointly, (a) to purchase
from the Company and from each of the Selling Shareholders, pro
rata, at a purchase price of $-------- per share, the number of
Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto and (b) to purchase from the Company any
additional number of Option Shares which such Underwriter may
become obligated to purchase pursuant to Section 3 hereof.
The Company and the Selling Shareholders will
deliver definitive certificates for the Firm Shares at the office
of X.X. Xxxxxxx & Sons, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Xxxxxxx' Office"), or such other place as you and the Company may
mutually agree upon, for the accounts of the Underwriters against
payment to the Company and the Selling Shareholders of the purchase
price for the Firm Shares sold by them to the several Underwriters
by wire transfer in immediately available funds to bank accounts
designated by the Company and Selling Shareholders, respectively.
The closing shall take place at X.X. Xxxxxxx & Sons, Inc., Xxx
Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or at such other
place as may be agreed upon between you and the Company (the "Place
of Closing"), at 10:00 a.m., St. Louis time,
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on the third (fourth, if pricing occurs after 3:30 p.m. St. Louis time) full
business day following the date of this Agreement, or at such other time and
date as you and the Company may agree, such time and date of payment and
delivery being herein called the "Closing Date."
The certificates for the Firm Shares so to be
delivered will be made available to you for inspection at Xxxxxxx'
Office (or such other place as you and the Company may mutually
agree upon) at least one full business day prior to the Closing
Date and will be in such names and denominations as you may request
at least two full business days prior to the Closing Date.
It is understood that an Underwriter, individually,
may (but shall not be obligated to) make payment on behalf of the
other Underwriters whose checks shall not have been received prior
to the Closing Date for Shares to be purchased by such Underwriter.
Any such payment by an Underwriter shall not relieve the other
Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to
offer the Shares to the public upon the terms and conditions set
forth in the Registration Statement hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES.
The Company hereby grants options to the Underwriters to purchase
from them on a pro rata basis up to 405,000 Option Shares on the
same terms and conditions as the Firm Shares; provided, however,
that such options may be exercised only for the purpose of covering
any over-allotments which may be made by them in the sale of the
Firm Shares. No Option Shares shall be sold or delivered unless
the Firm Shares previously have been, or simultaneously are, sold
and delivered.
The options are exercisable on behalf of the several
Underwriters by you, as Representatives, at any time, and from time
to time, before the expiration of 30 days from the date of this
Agreement, for the purchase of all or part of the Option Shares
covered thereby, by notice given by you to the Company in the
manner provided in Section 13 hereof, setting forth the number of
Option Shares as to which the Underwriters are exercising the
options, and the date of delivery of said Option Shares, which date
shall not be more than five (5) business days after such notice
unless otherwise agreed to by the parties. You may terminate the
options at any time, as to any unexercised portion thereof, by
giving written notice to the Company to such effect.
You, as Representatives, shall make such allocation
of the Option Shares among the Underwriters as may be required to
eliminate purchases of fractional Shares.
Delivery of the Option Shares with respect to which
the options shall have been exercised shall be made to or upon your
order at Xxxxxxx' Office (or at such other place as you and the
Company may mutually agree upon), against payment by you of the per
share purchase price to the Company by wire transfer in immediately
available funds to a bank account designated by the Company. Such
payment and delivery shall be made at 10:00 a.m., St. Louis time,
on the date designated in the notice given by you as above provided
for, unless some other date and time are agreed upon, which date
and time of payment and delivery are called the "Option Closing
Date." The certificates for the Option Shares so to be delivered
will be made available to you for inspection at Xxxxxxx' Office at
least one full business day prior to the Option Closing Date and
will be in such names and denominations as you may request at least
two (2) full business days prior to the Option Closing Date. On
the Option Closing Date, the Company shall provide the Underwriters
such representations, warranties, opinions and covenants with
respect to the Option Shares as are required to be delivered on the
Closing Date with respect to the Firm Shares.
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4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY AND THE SELLING SHAREHOLDERS.
(a) The Company represents and warrants to and
agrees with each Underwriter that:
(i) A registration statement
(Registration No. 333- )
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on Form S-1 with respect to the
Shares, including a preliminary
prospectus, and such amendments to
such registration statement as may
have been required to the date of
this Agreement, has been carefully
prepared by the Company pursuant to
and in conformity with the
requirements of the Securities Act
of 1933, as amended (the "Act"), and
the Rules and Regulations (the
"Rules and Regulations") of the
Securities and Exchange Commission
(the "Commission") thereunder and
has been filed with the Commission
under the Act. Copies of such
registration statement, including
any amendments thereto, each related
preliminary prospectus (meeting the
requirements of Rule 430 or 430A of
the Rules and Regulations) contained
therein, the exhibits, financial
statements and schedules have
heretofore been delivered by the
Company to you. If such
registration statement has not
become effective under the Act, a
further amendment to such
registration statement, including a
form of final prospectus, necessary
to permit such registration
statement to become effective will
be filed promptly by the Company
with the Commission. If such
registration statement has become
effective under the Act, a final
prospectus containing information
permitted to be omitted at the time
of effectiveness by Rule 430A of the
Rules and Regulations will be filed
promptly by the Company with the
Commission in accordance with Rule
424(b) of the Rules and Regulations.
The term "Registration Statement" as
used herein means the registration
statement as amended at the time it
becomes or became effective under
the Act (the "Effective Date"),
including financial statements and
all exhibits and, if applicable, the
information deemed to be included by
Rule 430A of the Rules and
Regulations. The term "Prospectus"
as used herein means (i) the
prospectus as first filed with the
Commission pursuant to Rule 424(b)
of the Rules and Regulations, or
(ii) if no such filing is required,
the form of final prospectus
included in the Registration
Statement at the Effective Date, or
(iii) if a Term Sheet or Abbreviated
Term Sheet (as such terms are
defined in Rules 434(b) and 434(c),
respectively, of the Rules and
Regulations) is filed with the
Commission pursuant to Rule
424(b)(7) of the Rules and
Regulations, the Term Sheet or
Abbreviated Term Sheet and the last
Preliminary Prospectus filed with
the Commission prior to the time the
Registration Statement became
effective, taken together. The term
"Preliminary Prospectus" as used
herein shall mean a preliminary
prospectus as contemplated by Rule
430 or 430A of the Rules and
Regulations included at any time in
the Registration Statement.
(ii) The Commission has not issued, and
is not to the knowledge of the
Company threatening to issue, an
order preventing or suspending the
use of any Preliminary Prospectus or
the Prospectus nor instituted
proceedings for that purpose. Each
Preliminary Prospectus at its date
of issue, the Registration Statement
and the Prospectus and any
amendments or supplements thereto
contains or will contain, as the
case may be, all
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statements which are required to be stated
therein by, and in all material respects
conform or will conform, as the case
may be, to the requirements of, the
Act and the Rules and Regulations.
Neither the Registration Statement
nor any amendment thereto, as of the
applicable effective date, and
neither the Prospectus nor any
supplement thereto contains or will
contain, as the case may be, any
untrue statement of a material fact
or omits or will omit to state any
material fact required to be stated
therein or necessary to make the
statements therein, in the light of
the circumstances under which they
were made, not misleading; provided,
however, that the Company makes no
representation or warranty as to
information contained in or omitted
from the Registration Statement or
the Prospectus, or any such
amendment or supplement, in reliance
upon, and in conformity with,
written information furnished to the
Company by or on behalf of the
Underwriters specifically for use in
the preparation thereof.
(iii) The filing of the Registration
Statement and the execution and
delivery of this Agreement have been
duly authorized by the Board of
Directors of the Company; this
Agreement constitutes a valid and
legally binding obligation of the
Company enforceable in accordance
with its terms (except to the extent
the enforceability of the
indemnification and contribution
provisions of Section 7 hereof may
be limited by public policy
considerations as expressed in the
Act as construed by courts of
competent jurisdiction, and except
as enforceability may be limited by
bankruptcy, insolvency,
reorganization, moratorium and other
laws affecting creditors' rights
generally and by general principles
of equity); the issue and sale of
the Shares by the Company and the
performance of this Agreement and
the consummation of the transactions
herein contemplated will not result
in a violation of the Company's
Articles of Incorporation or Bylaws
or result in a breach or violation
of any of the terms and provisions
of, or constitute a default under,
or result in the creation or
imposition of any lien, charge or
encumbrance upon any properties or
assets of the Company under any
statute, or under any indenture,
mortgage, deed of trust, note, loan
agreement, sale and leaseback
arrangement or other agreement or
instrument to which the Company is a
party or by which it is bound or to
which any of the properties or
assets of the Company is subject, or
any order, rule or regulation of any
court or governmental agency or body
having jurisdiction over the Company
or its properties, except to such
extent as does not materially
adversely affect the business of the
Company; no consent, approval,
authorization, order, registration
or qualification of or with any
court or governmental agency or body
is required for the consummation of
the transactions herein
contemplated, except such as may be
required by the National Association
of Securities Dealers, Inc. (the
"NASD") or under the Act or Rules
and Regulations or any state
securities laws.
(iv) Except as described in the
Prospectus, the Company has not
sustained since the date of the
latest audited financial statements
included in the Prospectus any
material loss or interference with
its business from fire, explosion,
flood or other calamity, whether or
not covered by insurance, or from
any labor dispute or court or
governmental action, order or
decree. Except as contemplated in
the Prospectus, subsequent to the
respective dates as of
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which information is given in the
Registration Statement and the
Prospectus, the Company has not
incurred any material liabilities or
material obligations, direct or
contingent, other than in the
ordinary course of business, or
entered into any material
transactions not in the ordinary
course of business, and there has
not been any material change in the
capital stock or long-term debt of
the Company or any material adverse
change in the condition (financial
or other), net worth, business,
affairs, management, prospects or
results of operations of the
Company. The Company has filed all
necessary federal, state and foreign
income and franchise tax returns and
paid all taxes shown as due thereon;
all tax liabilities are adequately
provided for on the books of the
Company except to such extent as
would not materially adversely
affect the business of the Company;
the Company has made all necessary
payroll tax payments and are current
and up-to-date as of the date of
this Agreement; and the Company has
no knowledge of any tax proceeding
or action pending or threatened
against the Company which might
materially adversely affect its
business or property.
(v) Except as described in the
Prospectus, there is not now pending
or, to the knowledge of the Company
or the Selling Shareholders,
threatened or contemplated, any
action, suit or proceeding to which
the Company is a party before or by
any court or public, regulatory or
governmental agency or body which
might be expected to result
(individually or in the aggregate)
in any material adverse change in
the condition (financial or other),
business or prospects of the
Company, or might be expected to
materially and adversely affect
(individually or in the aggregate)
the properties or assets thereof.
(vi) The Company has duly and validly
authorized capital stock as
described in the Prospectus; all
outstanding shares of Common Stock
of the Company and the Shares
conform, or when issued will
conform, to the description thereof
in the Registration Statement and
the Prospectus and have been, or,
when issued and paid for will be,
duly authorized, validly issued,
fully paid and nonassessable; and
the issuance of the Shares to be
purchased from the Company hereunder
is not subject to preemptive rights.
All offers and sales of the
securities of the Company during the
past three (3) years were at all
relevant times duly registered or
exempt from the registration
requirements of the Act and were
duly registered or the subject of an
exemption from the registration
requirements of applicable state
securities laws. Except as set
forth in the Prospectus, the Company
does not have outstanding, and at
the Closing Date, will not have
outstanding, any options to
purchase, or any rights or warrants
to subscribe for, or any securities
or obligations convertible into, or
any contracts, or commitments to
issue or sell any shares of Common
Stock or any such warrants,
convertible securities or
obligations. Except as disclosed in
the Prospectus, there are no
contracts, agreements or
understandings between the Company
and any person granting such person
the rights to require the Company to
file a registration statements under
the Act with respect to any
securities of the Company owned or
to be owned by such person or to
require the Company to include such
securities in the securities
registered pursuant to the
Registration
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Statement or in any securities
being registered pursuant to any
other registration statement filed
by the Company under the Act.
(vii) The Company has no subsidiaries, and
except as described in (xxi) below,
it does not conduct business through
any other entity. The Company has
been duly incorporated and is
validly existing as a corporation in
good standing under the laws of West
Virginia, with full power and
authority (corporate and other) to
own, lease and operate its
properties and conduct its business
as described in the Registration
Statement; the Company is duly
qualified to do business as a
foreign Company and is duly
qualified to do business as a
foreign corporation in good standing
in each state or other jurisdiction
in which its ownership or leasing of
property or conduct of business
legally requires such qualification,
except where the failure to be so
qualified would not have a material
adverse effect on the ability of the
Company to conduct its business as
described in the Registration
Statement.
(viii) Xxxxxx Xxxxxxxx LLP, the accounting
firm which has certified the
financial statements filed with the
Commission as a part of the
Registration Statement, is an
independent public accounting firm
within the meaning of the Act and
the Rules and Regulations.
(ix) 1) The financial statements
(including the condensed
financial statements) and
schedules, including the
notes thereto, included in
the Registration Statement
and the Prospectus with
respect to the Company
comply in all material
respects with the Act and
the Regulations thereunder
and present fairly the
financial position of the
Company as of the dates
indicated and the related
statements of operations,
cash flows and stockholder's
equity of the Company for
the periods specified and
have been prepared in
conformity with generally
accepted accounting
principles applied on a
consistent basis. The
selected and summary
financial information with
respect to the Company
included in the Registration
Statement and the Prospectus
present fairly the
information set forth
therein in compliance with
the applicable regulations
of the Commission and have
been compiled on a basis
consistent with that of the
audited financial statements
of the Company in the
Registration Statement and
the Prospectus.
2) The financial statements and
schedules of Weldco, Inc.,
including the notes thereto,
included in the Registration
Statement and the Prospectus
comply in all material
respects with the Act and
the Regulations thereunder
and present fairly the
financial position of the
Weldco, Inc. as of the dates
indicated and the related
statements of operations,
cash flows and stockholders'
equity for the periods
specified and have been
prepared in conformity with
generally accepted
accounting principles
applied on a consistent
basis. The selected and
summary financial
information with respect to
Weldco, Inc. included in the
Registration Statement and
the Prospectus present
fairly the information set
forth therein and in
compliance with the
applicable regulations of
the Commission and have been
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compiled on a basis
consistent with that of the
audited financial statements
of Weldco, Inc. in the
Registration Statement and
the Prospectus.
3) The pro forma condensed
combining financial
statements for the Company
and Weldco, Inc. included in
the Registration Statement
and the Prospectus comply in
form in all material
respects with the applicable
accounting requirements of
Article 11 of Regulation S-X
of the commission and the
pro forma adjustments have
been properly applied to the
historical amounts in the
compilation of those
statements. The selected
and summary information
included in the Registration
Statement and the Prospectus
present fairly the
information set forth
therein and have been
compiled on a basis
consistent with that of the
pro forma combined condensed
financial statements in the
Registration Statement and
Prospectus.
(x) The Company is not in default with
respect to any contract or agreement
to which it is a party; provided
that this representation shall not
apply to defaults which in the
aggregate are not materially adverse
to the condition, financial or
other, or the business or prospects
of the Company.
(xi) The Company is not in violation of
any other laws, ordinances or
governmental rules or regulations to
which it is subject, and the Company
has not failed to obtain any other
license, permit, franchise,
easement, consent, or other
governmental authorization necessary
to the ownership, leasing and
operation of its properties or to
the conduct of its business, which
violation or failure would
materially adversely affect the
business, operations, affairs,
properties, prospects, profits or
condition (financial or other) of
the Company. The Company has not,
at any time during the past five (5)
years, (a) made any unlawful
contributions to any candidate for
any political office, or failed
fully to disclose any contribution
in violation of law, or (b) made any
payment to any state, federal or
foreign government official, or
other person charged with similar
public or quasi-public duty (other
than payment required or permitted
by applicable law).
(xii) Except as described in the
Prospectus, the Company owns or
possess, or can acquire on
reasonable terms, adequate patents,
patent licenses, trademarks, service
marks and trade names necessary to
conduct the business now operated by
it, and the Company has not received
any notice of infringement of or
conflict with asserted rights of
others with respect to any patents,
patent licenses, trademarks, service
marks or trade names which, singly
or in the aggregate, if the subject
of an unfavorable decision, ruling
or finding, would have a material
adverse effect on the conduct of the
business, operations, financial
condition or income of the Company.
(xiii) The Company owns no real estate.
The Company has good and marketable
title to all other property owned by
it, free and clear of all liens,
encumbrances, restrictions and
defects except such as are described
in the Registration Statement or do
not interfere with the use made and
proposed to be made of such
property; and any property held
under lease or sublease
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by the Company is held under valid,
subsisting and enforceable leases or
subleases with such exceptions as
are not material and do not
interfere with the use made and
proposed to be made of such property
by the Company and the Company has
no notice or knowledge of any
material claim of any sort which has
been, or may be, asserted by anyone
adverse to the Company's rights as
lessee or sublessee under any lease
or sublease described above, or
affecting or questioning the
Company's rights to the continued
possession of the leased or
subleased premises under any such
lease or sublease in conflict with
the terms thereof.
(xiv) Except as described in the
Prospectus, there is no factual
basis for any action, suit or other
proceeding involving the Company or
any of its material assets for any
failure of the Company, or any
predecessor thereof, to comply with
any requirements of federal, state
or local regulation relating to air,
water, solid waste management,
hazardous or toxic substances, or
the protection of health or the
environment. Except as described in
the Prospectus, none of the property
leased by the Company is, to the
best knowledge of the Company,
contaminated with any waste or
hazardous substances, and the
Company may not be deemed an "owner
or operator" of a "facility" or
"vessel" which owns, possesses,
transports, generates or disposes of
a "hazardous substance" as those
terms are defined in Section 9601 of the
Comprehensive Environmental
Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601
et seq.
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(xv) No labor disturbance exists with the
employees of the Company is imminent
which would have a material adverse
effect on the Company.
(xvi) The Company has not taken and will
not take, directly or indirectly,
any action designed to or which
might reasonably be expected to
cause or result in stabilization or
manipulation of the price of the
Company's Common Stock, and the
Company is not aware of any such
action taken or to be taken by
affiliates of the Company.
(xvii) The Company is not an "investment
company" or a company "controlled"
by an "investment company" within
the meaning of the Investment
Company Act of 1940, as amended.
(xviii) The Company's system of internal accounting
controls is sufficient to meet the
broad objectives of internal accounting control
insofar as those objectives pertain
to the prevention or detection of errors or
irregularities in amounts that would be material
in relation to the Company's financial
statements; and, except as disclosed in the
Prospectus, neither the Company nor any employee
or agent of the Company has made any payment of
funds of the Company or received or retained any
funds in violation of any law, rule or
regulation, the receipt or payment of which
could have a material adverse effect on the
Company.
(xix) There is no document or contract of
a character required to be described
in the Registration Statement or the
Prospectus or to be filed as an
exhibit to the Registration
Statement that is not described or
filed as required. All
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such contracts to which the Company is a
party has been duly authorized,
executed and delivered by the
Company constitute valid and binding
agreements of the Company and are
enforceable by the Company in
accordance with the terms thereof.
(xx) Other than as contemplated by this
Agreement, there is no broker,
finder or other party that is
entitled to receive from the Company
any brokerage or finder's fee or
other fee or commission as a result
of any of the transactions
contemplated by this Agreement.
(xxi) The Company conducts its business in
the State of Pennsylvania through
VNG Holding Company, a Pennsylvania
business trust (the "Trust"); the
Trust has been duly organized and is
validly existing under the laws of
Pennsylvania and is not required to
qualify to do business under the
laws of any other jurisdiction; the
Company holds a 99% beneficial
interest in the Trust free and clear
of any mortgage, pledge, lien,
encumbrance, charge or adverse claim
and is not the subject of any
agreement or understanding with any
person; no options or other rights
to purchase, agreement or other
obligations to issue or other rights
to convert any obligations into
beneficial interests in the Trust
are outstanding; and the
representations and warranties
contained in (v) and (x) through
(xv) above are true and correct with
respect to the Trust.
(b) Each Selling Shareholder severally
represents and warrants to and agrees with
each Underwriter and the Company that:
(i) All authorizations and consents
necessary for the execution and
delivery by it of this Agreement and
the sale and delivery of the Shares
to be sold by such Selling
Shareholder hereunder have been
given and are in full force and
effect on the date hereof and will
be in full force and effect on the
Closing Date (and, if applicable,
the Option Closing Date).
(ii) Such Selling Shareholder has, and on
the Closing Date (and, if
applicable, the Option Closing Date)
will have good and valid title to
the Shares to be sold by such
Selling Shareholder, free and clear
of all liens, mortgages, pledges,
encumbrances, claims, equities and
security interests whatsoever, and
will have, full right, power and
authority to enter into this
Agreement and to sell, assign,
transfer and deliver the Shares to
be sold by such Selling Shareholder
hereunder.
(iii) Upon delivery of and payment for
such Shares hereunder, the several
Underwriters (assuming they are bona
fide purchasers under the Uniform
Commercial Code) will acquire valid
and unencumbered title to such
Shares to be sold by such Selling
Shareholder hereunder, free and
clear of all liens, mortgages,
pledges, encumbrances, claims,
equities and security interests
whatsoever.
(iv) The consummation by such Selling
Shareholder of the transactions
contemplated herein and the
fulfillment by such Selling
Shareholder of the terms hereof will
not result in a violation or breach
of any terms or
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provisions of, or constitute a default under,
any indenture, mortgage, deed of trust,
note, loan agreement, sale and
leaseback arrangement or other
agreement or instrument to which
such Selling Shareholder is a party,
or of any order, rule or regulation
applicable to such Selling
Shareholder of any court or of any
regulatory body of an administrative
agency or other governmental body
having jurisdiction.
(v) Such Selling Shareholder has not
taken and will not take, directly or
indirectly, any action designed to
or which might be reasonably
expected to cause or result in
stabilization or manipulation of the
price of the Company's Common Stock,
and such Selling Shareholder is not
aware of any such action taken or to
be taken by affiliates of such
Selling Shareholder.
(vi) When the Registration Statement
becomes effective and at all times
subsequent thereto, such information
in the Registration Statement and
Prospectus and any amendments or
supplements thereto as specifically
refers to such Selling Shareholder
will not contain any untrue
statement of a material fact or omit
to state any material fact required
to be stated therein or necessary to
make the statements therein not
misleading.
(vii) Certificates in negotiable form
representing all of the Shares to be
sold by such Selling Shareholder
hereunder have been placed in the
custody of -----------------------
and ------------------------------
(the "Custodians") under a
Custody Agreement (the "Custody
Agreement"), duly executed and
delivered by such Selling
Shareholder, with the Custodians
having the authority to deliver the
Shares to be sold by such Selling
Shareholder hereunder, and that such
Selling Shareholder has duly
executed and delivered a Power of
Attorney (the "Power of Attorney")
appointing ------------------------
and -------------------------------
as such Selling Shareholder's
attorneys-in-fact (the "Attorneys-
in-Fact") with the Attorneys-in-Fact
having authority to execute and
deliver this Agreement on behalf of
such Selling Shareholder, to
determine the purchase price to be
paid by the Underwriters to the
Selling Shareholders as provided in
Section 2, to authorize the delivery
of the Shares to be sold by it
hereunder and otherwise to act on
behalf of such Selling Shareholder
in connection with the transactions
contemplated by this Agreement and
such Custody Agreement.
(viii) The Shares represented by the
certificates held in custody for
such Selling Shareholder under the
Custody Agreement are subject to the
interests of the Underwriters
hereunder, and the arrangements made
by such Selling Shareholder for such
custody, and the appointment by such
Selling Shareholder of the
Custodians under the Custody
Agreement and of the Attorneys-in-
Fact by the Power of Attorney, are
to that extent irrevocable.
(ix) The obligations of such Selling
Shareholders hereunder shall not be
terminated by operation of law,
whether by the death or incapacity
of any individual Selling
Shareholder or by the occurrence of
any other event, and if any Selling
Shareholder should die or become
incapacitated, or if any other such
event should occur before the
delivery of the Shares hereunder,
certificates representing the Shares
shall be delivered by or on behalf of
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each Selling Shareholder in
accordance with the terms and
conditions of this Agreement and of
the Custody Agreement, and actions
taken by the Custodians pursuant to
the Custody Agreement or by the
Attorneys-in-Fact pursuant to the
Power of Attorney shall be as valid
as if such death, incapacity or
other event had not occurred,
regardless of whether or not the
Custodians or Attorneys-in-Fact, or
any of them, shall have received
notice of such death, incapacity or
other event.
(x) Such Selling Shareholder is not
prompted to sell shares of Common
Stock by any information concerning
the Company which is not included in
the Registration Statement.
(c) Any certificate signed by any officer of the
Company and delivered to you or to counsel
for the Underwriters shall be deemed a
representation and warranty by the Company
to each Underwriter as to the matters
covered thereby; and any certificate signed
by or on behalf of the Selling Shareholders
as such and delivered to you or to counsel
for the Underwriters shall be deemed a
representation and warranty by the Selling
Shareholders to each Underwriter as to the
matters covered thereby.
5. ADDITIONAL COVENANTS. The Company and, where
expressly indicated, the Selling Shareholders, covenant and agree
with the several Underwriters that:
(a) If the Registration Statement is not
effective under the Act, the Company will
use its best efforts to cause the
Registration Statement to become effective
as promptly as possible, and it will notify
you, promptly after it shall receive notice
thereof, of the time when the Registration
Statement has become effective. The Company
(i) will prepare and timely file with the
Commission under Rule 424(b) of the Rules
and Regulations, if required, a Prospectus
containing information previously omitted at
the time of effectiveness of the
Registration Statement in reliance on Rule
430A of the Rules and Regulations or
otherwise or a Term Sheet or Abbreviated
Term Sheet, as applicable; (ii) will not
file any amendment to the Registration
Statement or supplement to the Prospectus
of which the Underwriters shall not
previously have been advised and furnished
with a copy or to which the Underwriters
shall have reasonably objected in writing or
which is not in compliance with the Rules
and Regulations; and (iii) will promptly
notify you after it shall have received
notice thereof of the time when any
amendment to the Registration Statement
becomes effective or when any supplement to
the Prospectus has been filed.
(b) The Company will advise the Underwriters
promptly, after it shall receive notice or
obtain knowledge thereof, of any request of
the Commission for amendment of the
Registration Statement or for supplement to
the Prospectus or for any additional
information, or of the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement
or the use of the Prospectus or of the
institution or threatening of any
proceedings for that purpose, and the
Company will use its best efforts to prevent
the issuance of any such stop order
preventing or suspending the use of the
Prospectus and to obtain as soon as possible
the lifting thereof, if issued.
(c) The Company will cooperate with the
Underwriters and their counsel in
endeavoring to qualify the Shares for sale
under the securities laws of such
jurisdictions as they
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may have designated and will make such applications,
file such documents, and furnish such information as
may be necessary for that purpose, provided
the Company shall not be required to qualify
as a foreign corporation or to file a
general consent to service of process in any
jurisdiction where it is not now so
qualified or required to file such a consent
or to subject itself to taxation as doing
business in any jurisdiction where it is not
now so taxed. The Company will, from time
to time, file such statements, reports, and
other documents, as are or may be required
to continue such qualifications in effect
for so long a period as the Underwriters may
reasonably request.
(d) The Company will deliver to, or upon the
order of, the Underwriters, without charge
from time to time, as many copies of any
Preliminary Prospectus as they may
reasonably request. The Company will
deliver to, or upon the order of, the
Underwriters without charge as many copies
of the Prospectus, or as it thereafter may
be amended or supplemented, as they may from
time to time reasonably request. The Company
consents to the use of such Prospectus by
the Underwriters and by all dealers to whom
the Shares may be sold, both in connection
with the offering or sale of the Shares and
for such other purposes and for such period
of time thereafter as the Prospectus is
required by law to be delivered in
connection with the offering or sale of the
Shares. The Company will deliver to the
Underwriters at or before the Closing Date
two (2) signed copies of the Registration
Statement and all amendments thereto
including all exhibits filed therewith, and
will deliver to the Underwriters such number
of copies of the Registration Statement,
without exhibits, and of all amendments
thereto, as they may reasonably request.
(e) If, during the period in which a prospectus
is required by law to be delivered by an
Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the
Company or in your judgment or in the
opinion of counsel for the Underwriters, it
becomes necessary to amend or supplement the
prospectus in order to make the statements
therein, in light of the circumstances
existing at the time the prospectus is
delivered to a purchaser, not misleading,
or, if it is necessary at any time to amend
or supplement the prospectus to comply with
any law, the Company promptly will prepare
and file with the Commission an appropriate
amendment to the Registration Statement or
supplement to the prospectus so that the
prospectus as so amended or supplemented
will not, in the light of the circumstances
when it is so delivered, be misleading, or
so that the prospectus will comply with law.
(f) The Company will make generally available to
its stockholders and will file as an exhibit
in a report pursuant to the Securities and
Exchange Act of 1934, as amended (the "1934
Act"), as soon as it is practicable to do
so, but in any event not later than fifteen
(15) months after the effective date of the
Registration Statement, an earnings
statement in reasonable detail, covering a
period of at least twelve (12) consecutive
months beginning after the effective date of
the Registration Statement, which earnings
statement shall satisfy the requirements of
Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise the
Underwriters in writing when such statement
has been so made available.
(g) The Company will, for a period of five (5)
years from the Closing Date, deliver to the
Underwriters at their principal executive
offices a reasonable number of copies of
annual reports, quarterly reports, current
reports and copies of all other
12
13
documents, reports and information furnished by the
Company to its stockholders or filed with
any securities exchange pursuant to the
requirements of such exchange or with the
Commission pursuant to the Act or the 1934
Act. The Company will deliver to the
Underwriters similar reports with respect to
any significant subsidiaries, as that term
is defined in the Rules and Regulations,
which are not consolidated in the Company's
financial statements. Any report, document
or other information required to be
furnished under this paragraph (g) shall be
furnished as soon as practicable after such
report, document or information becomes
available.
(h) The Company will apply the proceeds from the
sale of the Shares as set forth in the
description under "Use of Proceeds" in the
Prospectus, which description complies in
all respects with the requirements of Item
504 of Regulation S-K.
(i) The Company will supply you with copies of
all correspondence to and from, and all
documents issued to and by, the Commission
in connection with the registration of the
Shares under the Act.
(j) Prior to the Closing Date (and, if
applicable, the Option Closing Date), the
Company will furnish to you, as soon as they
have been prepared, copies of any unaudited
interim financial statements of the Company
for any periods subsequent to the periods
covered by the financial statements
appearing in the Registration Statement and
the Prospectus.
(k) Prior to the Closing Date (and, if
applicable, the Option Closing Date),
neither the Company nor any Selling
Shareholder will issue any press releases or
other communications directly or indirectly
and will hold no press conferences with
respect to the Company the financial
condition, results of operations, business,
properties, assets or liabilities of the
Company, or the offering of the Shares,
without your prior written consent.
(l) The Company will use its best efforts to
obtain approval for, and maintain the
quotation of the Shares on, the National
Association of Securities Dealers, Inc.
Automated Quotation/National Market
(the "NNM").
(m) Except pursuant to this Agreement or with
the prior written consent of X.X. Xxxxxxx &
Sons, Inc., the Company will not, and the
Company has provided agreements executed by
Xxxx X. Xxxx, Xxxxxxxx X. Xxxxx, Xxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxxxxxxx, R. Xxxxx
Xxxxxxx and [the estate of Xxxxx Xxxx] providing
that none of them will, and the Company will
use its best efforts to cause its other
directors and officers to not, for a period
of 180 days from the Effective Date,
directly or indirectly sell, contract to
sell or otherwise dispose of any shares of
the Company's Common Stock, any securities
exchangeable for Common Stock or any other
rights to acquire such shares without your
prior written consent, except for the Shares
sold hereunder and except for sales of
shares of Common Stock to the Company's
employees pursuant to the exercise of
options under the Company's stock option
plan.
(n) For a period of 180 days from the Effective
Date, the Selling Shareholders will not
directly or indirectly sell, contract to
sell or otherwise dispose of any shares of
the Company's Common Stock or rights to
acquire such shares without your prior
written consent, except for the Shares sold
hereunder.
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14
(o) The Company and its subsidiaries will
maintain and keep accurate books and records
reflecting their assets and maintain
internal accounting controls which provide
reasonable assurance that (i) transactions
are executed in accordance with management's
authorization, (ii) transactions are
recorded as necessary to permit the
preparation of the Company's consolidated
financial statements and to maintain
accountability for the assets of the
Company, (iii) access to the assets of the
Company and its subsidiaries is permitted
only in accordance with management's
authorization, and (iv) the recorded
accounts of the assets of the Company are
compared with existing assets at reasonable
intervals.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
several obligations of the Underwriters to purchase and pay for the
Shares, as provided herein, shall be subject to the accuracy in all
material respects, as of the date hereof and as of the Closing Date
(and, if applicable, the Option Closing Date), of the
representations and warranties of the Company and the Selling
Shareholders contained herein, to the performance in all material
respects by the Company and the Selling Shareholders of their
covenants and obligations hereunder, and to the following
additional conditions:
(a) All filings required by Rule 424 and Rule
430A of the Rules and Regulations shall have
been made. No stop order suspending the
effectiveness of the Registration Statement,
as amended from time to time, shall have
been issued and no proceeding for that
purpose shall have been initiated or, to the
knowledge of the Company or any Underwriter,
threatened or contemplated by the
Commission, and any request of the
Commission for additional information (to be
included in the Registration Statement or
the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction
of the Underwriters.
(b) No Underwriter shall have disclosed in
writing to the Company on or prior to the
Closing Date (and, if applicable, the Option
Closing Date), that the Registration
Statement or Prospectus or any amendment or
supplement thereto contains an untrue
statement of fact which, in the opinion of
counsel to the Underwriters, is material, or
omits to state a fact which, in the opinion
of such counsel, is material and is required
to be stated therein or is necessary to make
the statements therein, in light of the
circumstances under which they were made,
not misleading.
(c) On the Closing Date (and, if applicable, the
Option Closing Date), you shall have
received the opinion of counsel for the
Company, addressed to you and dated the
Closing Date (and, if applicable, the
Option Closing Date), 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 West
Virginia with the corporate power
and authority to own, lease and
operate its properties and conduct
its business as described in the
Registration Statement; the Company
is duly qualified to do business as
a foreign corporation in good
standing in each state or other
jurisdiction in which its ownership
or leasing of property or conduct of
business legally requires such
qualification, except where the
failure to be so qualified would not
have a material adverse effect on
the ability of the Company to
conduct its business as described in
the Registration Statement.
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15
(ii) The Company has duly and validly
authorized capital stock as set
forth under the heading
"Capitalization" in the Prospectus;
all outstanding shares of Common
Stock of the Company and the Shares
conform to the description thereof
in the Prospectus under the heading
"Description of Capital Stock", and
the outstanding shares of Common
Stock have been duly authorized and
are validly issued, fully paid and
non-assessable; the Shares to be
sold by the Company have been duly
authorized and, when delivered and
paid for in accordance with this
Agreement, will be validly issued,
fully paid and non-assessable, and
the shareholders of the Company have
no preemptive rights with respect to
the Shares.
(iii) Such counsel has been advised by the
staff of the Commission that the
Registration Statement has become
effective under the Act and, to the
knowledge of such counsel no stop
order suspending the effectiveness
of the Registration Statement has
been issued and no proceedings for
that purpose have been instituted or
are pending or contemplated under
the Act.
(iv) The Registration Statement and the
Prospectus, and each amendment or
supplement thereto, as of their
respective effective or issue dates,
comply as to form and appear on
their face to be appropriately
responsive in all material respects
to the requirements of the Act and
the applicable rules and regulations
(except that such counsel need
express no opinion as to the
financial statements or other
financial data).
(v) The descriptions in the Registration
Statement and Prospectus of
contracts and other documents filed
as exhibits to the Registration
Statement are accurate in all
material respects; all other
material agreements between the
Company and third parties expressly
referenced in the Prospectus are
legal, valid and binding obligations
of the Company.
(vi) No authorization, approval, consent,
order, registration or qualification
of or with of any court or
governmental body, authority or
agency is required with respect to
the Company in connection with the
transactions contemplated by this
Agreement, except such as may be
required under the Act or the Rules
and Regulations or as may be
required by the NASD or under state
securities laws in connection with
the purchase and distribution of the
Shares by the Underwriters.
(vii) The filing of the Registration
Statement has been duly authorized
by the Board of Directors of the
Company. This Agreement has been
duly authorized, executed and
delivered by the Company. The
performance of this Agreement and
the consummation of the transactions
herein contemplated will not result
in a violation of the Company's
Articles of Incorporation or
Bylaws or result in a breach or
violation of any of the terms and
provisions of, or constitute a
default under, or result in the
creation or imposition of any lien,
charge or encumbrance upon any
properties or assets of the Company,
any statute, or under any indenture,
mortgage, deed of trust, note, loan
agreement, sale and leaseback
arrangement, or any other agreement
or instrument known to such counsel
to which the Company is a party or
by which its bound or to which any of
15
16
the properties or assets of the
Company is subject, or any order,
rule or regulation known to such
counsel of any court or governmental
agency or body having jurisdiction
over the Company or its properties,
except, in the case of any such
violation, breach, default, creation
or imposition, to such extent as
does not materially adversely affect
the business of the Company.
(viii) To the knowledge of such counsel,
(a) there are no material
(individually, or in the aggregate)
legal, governmental or regulatory
proceedings pending or threatened to
which the Company is a party or of
which the business or properties of
the Company is the subject which are
not disclosed in the Registration
Statement and Prospectus; (b) there
are no contracts or documents of a
character required to be described
in the Registration Statement or the
Prospectus or to be filed as an
exhibit to the Registration
Statement which are not described or
filed as required; and (c) there are
no statutes or regulations required
to be described in the Registration
Statement or Prospectus which are
not described as required.
(ix) To the knowledge of such counsel,
the Company holds all licenses,
certificates, permits and approvals
from all state, federal and other
regulatory authorities, and has
satisfied in all material respects
the requirements imposed by
regulatory bodies, administrative
agencies or other governmental
bodies, agencies or officials, that
are required for the Company
lawfully to own, lease and operate
its properties and conduct its
business as described in the
Prospectus, and, to the knowledge of
such counsel, the Company is
conducting its business in
compliance in all material respects
with all of the laws, rules and
regulations of each jurisdiction in
which it conducts its business.
(x) The statements made in the
Registration Statement under the
captions "Dividend Policy",
"Capitalization" and "Description of
Capital Stock" to the extent that they
constitute summaries of documents
referred to therein or matters of
law or legal conclusions, have been
reviewed by such counsel and are
accurate summaries and fairly
present the information disclosed
therein.
(xi) The Company is not, and will not
become as a result of the
consummation of the transactions
contemplated by this Agreement and
application of the net proceeds
therefrom as described in the
Prospectus, required to register as
an investment company under the
Investment Company Act of 1940.
(xii) Except as described in the
Registration Statement, there are no
contracts, agreements or
understanding known to such counsel
between the Company and any person
granting such person the right to
require the Company to file a
registration statement under the Act
with respect to any securities of
the Company owned or to be owned by
such person or to require the
Company to include such securities
in the securities registered
pursuant to the Registration
Statement or in any securities being
registered pursuant to any other
registration statement filed by the
Company under the Act.
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Such counsel also shall confirm that in the course
of its duties in connection with the preparation of the
Registration Statement and Prospectus, nothing came to such
counsel's attention that would lead them to believe that either the
Registration Statement or Prospectus or any amendment or supplement
thereto (other than the financial statements or other financial
data as to which such counsel need express no opinion) contains any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering the foregoing opinion, such counsel may
rely, provided that the opinion shall state that you and they are
entitled to so rely, (a) as to matters involving laws of any
jurisdiction other than -------------- or the United States, upon
opinions addressed to the Underwriters of other counsel
satisfactory to them and Peper, Martin, Xxxxxx, Xxxxxxx and
Xxxxxxx, and (b) as to all matters of fact, upon certificates and
written statements of the executive officers of, and accountants
for, the Company.
(d) On the Closing Date (and, if applicable, the
Option Closing Date), you shall have
received the opinion of counsel to the
Selling Shareholders, addressed to you and
dated the Closing Date (and, if applicable,
the Option Closing Date), to the effect
that:
(i) Each Selling Shareholder has duly
authorized, executed and delivered
the Custody Agreement and Power of
Attorney, appointing
------------------ and
------------------ as such Selling
Shareholder's Custodians with
authority to take custody of and
deliver the Shares as represented by
certificates on behalf of such
Selling Shareholder in connection
with the transactions contemplated
by this Agreement and the Custody
Agreement and appointing
------------------ and -------------
as such Selling Shareholder's
attorneys-in-fact with authority to
execute and deliver this Agreement
on behalf of such Selling
Shareholder and otherwise to act on
behalf of such Selling Shareholder
in connection with the transactions
contemplated by this Agreement and
the Power of Attorney.
(ii) This Agreement has been duly
authorized, executed and delivered
on behalf of the Selling
Shareholders.
(iii) Each Selling Shareholder has full
legal right, power and authority to
sell, assign, transfer and deliver
the Shares to be sold by such
Selling Shareholder.
(iv) Each Selling Shareholder has good
and valid title to the Shares being
sold by such Selling Shareholder
hereunder, free and clear of all
liens, mortgages, pledges,
encumbrances, claims, equities and
security interests, and (assuming
the underwriters are bona fide
purchasers within the meaning of the
Uniform Commercial Code) has
transferred to the Underwriters good
and valid title to the Shares being
sold by such Selling Shareholder on
the Closing Date (and, if
applicable, the Option Closing
Date), free and clear of all liens,
mortgages, pledges, encumbrances,
claims, equities and security
interests whatsoever.
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In rendering the foregoing opinion, such counsel may
rely, provided that the opinion shall state that you and they are
entitled to so rely, (a) as to matters involving laws of any
jurisdiction other than --------------- or the United States, upon
opinions addressed to the Underwriters of other counsel
satisfactory to them and Peper, Martin, Xxxxxx, Xxxxxxx and
Hetlage, and (b) as to all matters of fact, upon certificates and
written statements of the Selling Shareholders.
(e) You shall have received on the Closing Date
(and, if applicable, the Option Closing
Date), from Peper, Martin, Xxxxxx, Xxxxxxx
and Hetlage, counsel to the Underwriters,
such opinion or opinions, dated the Closing
Date (and, if applicable, the Option Closing
Date) with respect to the incorporation of
the Company, the validity of the Shares, the
Registration Statement, the Prospectus and
other related matters as you may reasonably
require; the Company and Selling
Shareholders shall have furnished to such
counsel such documents as they reasonably
request for the purpose of enabling them to
pass on such matters.
(f) You shall have received at or prior to the
Closing Date from Peper, Martin, Xxxxxx,
Xxxxxxx and Xxxxxxx a memorandum or
memoranda, in form and substance
satisfactory to you, with respect to the
qualification for offering and sale by the
Underwriters of the Shares under state
securities laws of such jurisdictions as the
Underwriters may have designated to the
Company.
(g) On the date of this Agreement and on the
Closing Date (and, if applicable, the Option
Closing Date), you shall have received from
Xxxxxx Xxxxxxxx LLP, a letter or letters,
dated the date of this Agreement and the
Closing Date (and, if applicable, the Option
Closing Date), respectively, in form and
substance satisfactory to you, confirming
that they are independent public accountants
with respect to the Company within the
meaning of the Act and the published Rules
and Regulations, and the answer to Item 509
of Regulation S-K set forth in the
Registration Statement is correct insofar as
it relates to them, and addressing the
matters set forth in Schedule III hereto.
(h) Except as contemplated in the Prospectus,
(i) the Company shall not have sustained
since the date of the latest audited
financial statements included in the
Prospectus any loss or interference with its
business from fire, explosion, flood or
other calamity, whether or not covered by
insurance, or from any labor dispute or
court or governmental action, order or
decree; and (ii) subsequent to the
respective dates as of which information is
given in the Registration Statement and the
Prospectus, the Company shall not have
incurred any liability or obligation, direct
or contingent, or entered into transactions,
and there shall not have been any change in
the capital stock or long-term debt of the
Company or any change in the condition
(financial or other), net worth, business,
affairs, management, prospects or results of
operations of the Company, the effect of
which, in any such case described in clause
(i) or (ii), is in your judgment so material
or adverse as to make it impracticable or
inadvisable to proceed with the public
offering or the delivery of the Shares being
delivered on such Closing Date (and, if
applicable, the Option Closing Date) on the
terms and in the manner contemplated in the
Prospectus.
(i) There shall not have occurred any of the
following: (i) a suspension or material
limitation in trading in securities
generally on the New York Stock Exchange or
the American Stock Exchange or the
establishing on such exchanges by the Commission
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or by such exchanges of minimum
or maximum prices which are not in force and
effect on the date hereof; (ii) a general
moratorium on commercial banking activities
declared by either federal or state
authorities; (iii) the outbreak or
escalation of hostilities involving or
affecting the United States or the
declaration by the United States of a
national emergency or war, if the effect of
any such event specified in this clause
(iii) in your judgment makes it
impracticable or inadvisable to proceed with
the public offering or the delivery of the
Shares in the manner contemplated in the
Prospectus; (iv) any calamity or crisis,
change in national, international or world
affairs, act of God, change in the
international or domestic markets, or change
in the existing financial, political or
economic conditions in the United States or
elsewhere, if the effect of any such event
specified in this clause (iv) makes it
impracticable or inadvisable to proceed with
the public offering or the delivery of the
Shares in the manner contemplated in the
Prospectus; or (v) the enactment,
publication, decree, or other promulgation
of any federal or state statute, regulation,
rule, or order of any court or other
governmental authority, or the taking of any
action by any federal, state or local
government or agency in respect of fiscal or
monetary affairs, if the effect of any such
event specified in this clause (v) in your
judgment makes it impracticable or
inadvisable to proceed with the public
offering or the delivery of the Shares in
the manner contemplated in the Prospectus.
(j) You shall have received certificates, dated
the Closing Date (and, if applicable, the
Option Closing Date) and signed by the
President and the Chief Financial Officer of
the Company stating that (i) they have
carefully examined the Registration
Statement and the Prospectus as amended or
supplemented and nothing has come to their
attention that would lead them to believe
that either the Registration Statement or
the Prospectus, or any amendment or
supplement thereto as of their respective
effective or issue dates, contained, and the
Prospectus as amended or supplemented at
such Closing Date, contains any untrue
statement of a material fact, or omits to
state a material fact required to be stated
therein or necessary in order to make the
statements therein, in light of the
circumstances under which they were made,
not misleading, and, that (ii) all
representations and warranties made herein
by the Company are true and correct in all
material respects at such Closing Date, with
the same effect as if made on and as of such
Closing Date, and all agreements herein to
be performed by the Company on or prior to
such Closing Date have been duly performed
in all material respects.
(k) The Company and each of the Selling
Shareholders shall not have failed, refused,
or been unable, at or prior to the Closing
Date (and, if applicable, the Option Closing
Date) to have performed in all material
respects any agreement on their part to be
performed or any of the conditions herein
contained and required to be performed or
satisfied by them at or prior to such
Closing Date.
(l) The Company and the Selling Shareholders
shall have furnished to you at the Closing
Date (and, if applicable, the Option Closing
Date) such other certificates as you may
have reasonably requested as to the
accuracy, on and as of such Closing Date, of
the representations and warranties of the
Company and the Selling Shareholders herein
and as to the performance by the Company and
the Selling Shareholders of their
obligations hereunder.
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(m) The Shares shall have been approved for
trading upon official notice of issuance on
the NNM.
(n) The NASD shall not have raised any objection
with respect to the fairness and
reasonableness of the underwriting terms and
arrangements.
(o) The agreements mentioned in Section 5(m)
shall be in full force and effect.
All such opinions, certificates, letters and
documents will be in compliance with the provisions hereof only if
they are reasonably satisfactory to you and to Peper, Martin,
Xxxxxx, Xxxxxxx and Xxxxxxx, counsel for the several Underwriters.
The Company and Selling Shareholders will furnish you with such
conformed copies of such opinions, certificates, letters and
documents as you may request.
If any of the conditions specified above in this
Section 6 shall not have been satisfied at or prior to the Closing
Date (and, if applicable, the Option Closing Date) or waived by you
in writing, this Agreement may be terminated by you on notice to
the Company and the Selling Shareholders.
7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless
each Underwriter and each person, if any,
who controls any Underwriter within the
meaning of the Act, against any losses,
claims, damages or liabilities, joint or
several, to which such Underwriter or such
controlling person may become subject, under
the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or
are based upon an untrue statement or
alleged untrue statement of a material fact
contained in the Registration Statement, any
Preliminary Prospectus, 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,
in light of the circumstances under which
they were made, not misleading; and will
reimburse each Underwriter and each such
controlling person for any legal or other
expenses reasonably incurred by such
Underwriter or such controlling person 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 the
Registration Statement, such Preliminary
Prospectus or the Prospectus, or such
amendment or supplement, in reliance upon
and in conformity with written information
furnished to the Company by you or by any
Underwriter through you, specifically for
use in the preparation thereof; and
provided, further, that if any Preliminary
Prospectus or the Prospectus contained any
alleged untrue statement or allegedly
omitted to state therein a material fact
required to be stated therein or necessary
to make the statements therein not
misleading and such statement or omission
shall have been corrected in a revised
Preliminary Prospectus or in the Prospectus
or in an amended or supplemented Prospectus,
the Company shall not be liable to any
Underwriter or controlling person under this
subsection (a) with respect to such alleged
untrue statement or alleged omission to the
extent that any such loss, claim, damage or
liability of such Underwriter or controlling
person results from the fact that such
Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to
the written confirmation of such sale, such
revised Preliminary Prospectus or
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Prospectus or amended or supplemented Prospectus.
This indemnity agreement shall be in addition to
any liabilities which the Company may
otherwise have.
(b) Each Selling Shareholder will indemnify and
hold harmless each Underwriter and each
person, if any, who controls any Underwriter
within the meaning of the Act, against any
losses, claims, damages or liabilities,
joint or several, to which such Underwriter
or controlling person may become subject,
under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or
are based upon any untrue statement or
alleged untrue statement of any material
fact contained in the Registration
Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon
the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading, in each
case to the extent, but only to the extent,
that such untrue statement or alleged untrue
statement or omission or alleged omission
was made in the Registration Statement, such
Preliminary Prospectus or the Prospectus, or
such amendment or supplement, in reliance
upon and in conformity with written
information furnished to the Company or any
Underwriter by such Selling Shareholder
specifically for use in the preparation
thereof; and will reimburse any legal or
other expenses reasonably incurred by each
Underwriter and each person, if any, who
controls any Underwriter within the meaning
of the Act, in connection with investigating
or defending any such loss, claim, damage,
liability or action; provided, however, that
the indemnity contained in this subsection
(b) with respect to any Preliminary
Prospectus shall not inure to the benefit of
any Underwriter (or to the benefit of any
person controlling such Underwriter) in
respect of any action or claim asserted by
a person who purchased any Shares from such
Underwriter, if, within the time required by
the Act such person was not sent or given a
copy of the Prospectus, as then amended or
supplemented. In no event, however, shall
the liability of any Selling Shareholder for
indemnification under this Section 7(b)
exceed the proceeds received by such Selling
Shareholder from the Underwriters in the
offering. This indemnity agreement shall
be in addition to any liabilities which the
Selling Shareholders may otherwise have.
(c) Each Underwriter will indemnify and hold
harmless the Company, each of its directors,
each of its officers who have signed the
Registration Statement and, each person, if
any, who controls the Company within the
meaning of the Act, and each Selling
Shareholder, against any losses, claims,
damages or liabilities, joint or several, to
which the Company or any such director,
officer or controlling person or any such
Selling Shareholder may become subject,
under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or
are based upon any untrue statement or
alleged untrue statement of any material
fact contained in the Registration
Statement, any Preliminary Prospectus, the
Prospectus, any amendment or supplement
thereto, or arise out of or are based upon
the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading, in each case to the extent,
but only to the extent, that such untrue
statement or alleged untrue statement or
omission or alleged omission was made in the
Registration Statement, such Preliminary
Prospectus or the Prospectus, such amendment
or supplement, in reliance upon and in
conformity with written information
furnished to the Company
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by any such Underwriter specifically for use in the
preparation thereof; and will reimburse any
legal or other expenses reasonably incurred
by the Company or any such director, officer
or controlling person or any such Selling
Shareholder in connection with investigating
or defending any such loss, claim, damage,
liability or action. The Company and each
Selling Shareholder acknowledge that the
statements set forth under the heading
"Underwriting" in any Preliminary Prospectus
and the Prospectus constitute the only
information relating to the Underwriters
furnished in writing to the Company by the
Underwriters expressly for inclusion in the
Registration Statement, any Preliminary
Prospectus or the Prospectus.
(d) Any party which proposes to assert the right
to be indemnified under this Section 7
shall, within ten (10) days after receipt of
notice of commencement of any action, suit
or proceeding against such party in respect
of which a claim is to be made against an
indemnifying party under this Section 7,
notify each such indemnifying party of the
commencement of such action, suit or
proceeding, enclosing a copy of all papers
served, but the omission so to notify such
indemnifying party of any such action, suit
or proceeding shall not relieve such
indemnifying party from any liability which
it may have to any indemnified party
otherwise than under this Section 7. In
case any such action, suit or proceeding
shall be brought against any indemnified
party and it shall notify the indemnifying
party of the commencement thereof, the
indemnifying party shall be entitled to
participate in, and, to the extent that it
shall wish, jointly with any other
indemnifying party, similarly notified, to
assume the defense thereof, with counsel
reasonably satisfactory to such indemnified
party, and after notice from the
indemnifying party to such indemnified party
of its election so to assume the defense
thereof, the indemnifying party shall not be
liable to such indemnified party for any
legal or other expenses, other than
reasonable costs of investigation,
subsequently incurred by such indemnified
party in connection with the defense
thereof. The indemnified party shall have
the right to employ its own counsel in any
such action, but the fees and expenses of
such counsel shall be at the expense of such
indemnified party unless (i) the employment
of counsel by such indemnified party at the
expense of the indemnifying party has been
authorized by the indemnifying party,
(ii) the indemnified party shall have been
advised by such counsel in a written opinion
that there may be a conflict of interest
between the indemnifying party and the
indemnified party in the conduct of the
defense, or certain aspects of the defense,
of such action (in which case the
indemnifying party shall not have the right
to direct the defense of such action with
respect to those matters or aspects of the
defense on which a conflict exists or may
exist on behalf of the indemnified party) or
(iii) the indemnifying party shall not in
fact have employed counsel to assume the
defense of such action, in any of which
events such fees and expenses to the extent
applicable shall be borne by the
indemnifying party. An indemnifying party
shall not be liable for any settlement of
any action or claim effected without its
consent. Each indemnified party, as a
condition of such indemnity, shall cooperate
in good faith with the indemnifying party in
the defense of any such action or claim.
(e) If the indemnification provided for in this
Section 7 is for any reason, other than
pursuant to the terms thereof, 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 last right to
appeal) to be unavailable to an indemnified
party under subsections (a), (b) or (c)
above in respect of any losses, claims,
damages or
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liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party,
contribute to the amount paid or payable by
such indemnified party as a result of such
losses, claims, damages or liabilities (or
actions in respect thereof) in such
proportion as is appropriate to reflect the
relative benefits received by the Company,
the Selling Shareholders and the
Underwriters from the offering of the
Shares. If, however, the allocation
provided by the immediately preceding
sentence is not permitted by applicable law,
then each indemnifying party shall
contribute to such amount paid or payable by
such indemnified party in such proportion as
is appropriate to reflect not only such
relative benefits but also the relative
fault, as applicable, of the Company, the
Selling Shareholders and the Underwriters in
connection with the statements or omissions
which resulted in such losses, claims,
damages or liabilities (or actions in
respect thereof), as well as other relevant
equitable considerations. The relative
benefits received by, as applicable, the
Company, the Selling Shareholders and the
Underwriters shall be deemed to be in the
same proportion as the total net proceeds
from the offering (before deducting
expenses) received by the Company and the
Selling Shareholders bear to the total
underwriting discounts and commissions
received by the Underwriters, in each case
as set forth in the table on the cover page
of the Prospectus. The relative fault shall
be determined by reference to, among other
things, whether the untrue statement of a
material fact or the omission or alleged
omission to state a material fact relates to
information supplied by the Company, the
Selling Shareholders or the Underwriters and
the parties' relative intent, knowledge,
access to information and opportunity to
correct or prevent such statement or
omission. The Company, the Selling
Shareholders and the Underwriters agree that
it would not be just and equitable if
contributions pursuant to this subsection
(e) were determined by pro rata allocation
(even if the Underwriters were treated as
one entity for such purpose) or by any other
method of allocation which does not take
account of the equitable considerations
referred to above in this subsection (e).
The amount paid or payable by an indemnified
party as a result of the losses, claims,
damages or liabilities (or actions in
respect thereof) referred to above in this
subsection (e) shall be deemed to include
any legal or other expenses reasonably
incurred by such indemnified party in
connection with investigating or defending
any such action or claim. Notwithstanding
the provisions of this subsection (e): No
Underwriter shall be required to contribute
any amount in excess of the underwriting
discounts and commissions applicable to the
Shares purchased by such Underwriter; no
Selling Shareholder shall be required to
contribute any amount in excess of the
proceeds received by such Selling
Shareholder from the Underwriters in the
offering; and, no person guilty of
fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person
who was not guilty of such fraudulent
misrepresentation. The Underwriters'
obligations in this subsection (e) to
contribute are several in proportion to
their respective underwriting obligations
and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties, and agreements of the Company and
the Selling Shareholders contained in Sections 7 and 11 herein or
in certificates delivered pursuant hereto, and the agreements of
the Underwriters contained in Section 7 hereof, shall remain
operative and in full force and effect regardless of any
termination or cancellation of this Agreement or any investigation
made by or on behalf of any Underwriter or any controlling person,
the Company or any of its officers, directors or any controlling
persons, or the Selling Shareholders, and shall survive delivery of
the Shares to the Underwriters hereunder.
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9. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter shall default in its
obligation to purchase the Shares which it
has agreed to purchase hereunder, you may in
your discretion arrange for you or another
party or other parties to purchase such
Shares on the terms contained herein. If
within thirty-six (36) hours after such
default by any Underwriter you do not
arrange for the purchase of such Shares,
then the Company and the Selling
Shareholders shall be entitled to a further
period of thirty-six (36) hours within which
to procure another party or parties
reasonably satisfactory to you to purchase
such Shares on such terms. In the event
that, within the respective prescribed
periods, you notify the Company and the
Selling Shareholders that you have so
arranged for the purchase of such Shares, or
the Company and the Selling Shareholders
notify you that they have so arranged for
the purchase of such Shares, you or the
Company and the Selling Shareholders shall
have the right to postpone the Closing Date
for a period of not more than seven (7)
days, in order to effect whatever changes
may thereby be made necessary in the
Registration Statement or the Prospectus, or
in any other documents or arrangements, and
the Company agrees to file promptly any
amendments to the Registration Statement or
the Prospectus which in your opinion may
thereby be made necessary. The term
"Underwriter" as used in this Agreement
shall include any persons substituted under
this Section 9 with like effect as if such
person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements
for the purchase of the Shares of a
defaulting Underwriter or Underwriters made
by you or the Company and the Selling
Shareholders as provided in subsection (a)
above, the aggregate number of Shares which
remains unpurchased does not exceed one
tenth (1/10) of the total Shares to be sold
on the Closing Date, then the Company and
the Selling Shareholders shall have the
right to require each non-defaulting
Underwriter to purchase the Shares which
such Underwriter agreed to purchase
hereunder and, in addition, to require each
non-defaulting Underwriter to purchase its
pro rata share (based on the number of
Shares which such Underwriter agreed to
purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for
which such arrangements have not been made;
but nothing herein shall relieve a
defaulting Underwriter from liability for
its default.
(c) If, after giving effect to any arrangements
for the purchase of the Shares of a
defaulting Underwriter or Underwriters made
by you or the Company and the Selling
Shareholders as provided in subsection (a)
above, the number of Shares which remains
unpurchased exceeds one tenth (1/10) of the
total Shares to be sold on the Closing Date,
or if the Company and the Selling
Shareholders shall not exercise the right
described in subsection (b) above to require
the non-defaulting Underwriters to purchase
Shares of the defaulting Underwriter or
Underwriters, then this Agreement shall
thereupon terminate, without liability on
the part of any non-defaulting Underwriter
or the Company and the Selling Shareholders
except for the expenses to be borne by the
Company and the Underwriters as provided in
Section 11 hereof and the indemnity and
contribution agreements in Section 7 hereof;
but nothing herein shall relieve a
defaulting Underwriter from liability for
its default.
10. EFFECTIVE DATE AND TERMINATION.
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(a) This Agreement shall become effective at
1:00 p.m., St. Louis time, on the first
business day following the effective date of
the Registration Statement, or at such
earlier time after the effective date of the
Registration Statement as you in your
discretion shall first release the Shares
for offering to the public; provided,
however, that the provisions of Section 7
and 11 shall at all times be effective. For
the purposes of this Section 10(a), the
Shares shall be deemed to have been released
to the public upon release by you of the
publication of a newspaper advertisement
relating to the Shares or upon release of
telegrams, facsimile transmissions or
letters offering the Shares for sale to
securities dealers, whichever shall first
occur.
(b) This Agreement may be terminated by you at
any time before it becomes effective in
accordance with Section 10(a) by notice to
the Company and the Selling Shareholders;
provided, however, that the provisions of
this Section 10 and of Section 7 and Section
11 hereof shall at all times be effective.
In the event of any termination of this
Agreement pursuant to Section 9 or this
Section 10(b) hereof, the Company and the
Selling Shareholders shall not then be under
any liability to any Underwriter except as
provided in Section 7 or Section 11 hereof.
(c) This Agreement may be terminated by you at
any time at or prior to the Closing Date by
notice to the Company and the Selling
Shareholders if any condition specified in
Section 6 hereof shall not have been
satisfied on or prior to the Closing Date.
Any such termination shall be without
liability of any party to any other party
except as provided in Sections 7 and 11
hereof.
(d) This Agreement also may be terminated by
you, by notice to the Company and the
Selling Shareholders, as to any obligation
of the Underwriters to purchase the Option
Shares, if any condition specified in
Section 6 hereof shall not have been
satisfied at or prior to the Option Closing
Date or as provided in Section 9 of this
Agreement.
If you terminate this Agreement as provided in
Sections 10(b), 10(c) or 10(d), you shall notify the Company and
the Selling Shareholders by telephone or telegram, confirmed by
letter.
11. COSTS AND EXPENSES. The Company and the Selling
Shareholders will bear and pay the costs and expenses incident to
the registration of the Shares and public offering thereof,
including, without limitation, (a) the fees and expenses of the
Company's accountants and the fees and expenses of counsel for the
Company, (b) the preparation, printing, filing, delivery and
shipping of the Registration Statement, each Preliminary
Prospectus, the Prospectus and any amendments or supplements
thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement,
the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaires and Powers of Attorney and Blue Sky
Memoranda, (c) the furnishing of copies of such documents (except
as otherwise expressly provided in Section 5(d) hereof) to the
Underwriters, (d) the qualification of the Shares for offering and
sale under the securities laws of the various states and in
connection with qualification under NASD regulations, including the
reasonable fees and disbursements of Underwriters' counsel relating
to such qualifications, (e) the fees payable to the NASD and the
Commission in connection with their review of the proposed offering
of the Shares, (f) all printing and engraving costs related to
preparation of the certificates for the Shares, including transfer
agent and registrar fees, (g) all initial transfer taxes, if any,
(h) all fees and expenses relating to the authorization of the
Shares for trading on NNM, (i) all travel expenses,
including air fare and accommodation expenses, of representatives
of the Company in connection with the offering of the Shares and
(j) all of the other costs and expenses incident to the performance
by the Company and Selling Shareholders of the registration and
offering of the Shares; provided, however, that the
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Underwriters will bear and pay the fees and expenses of the Underwriters'
counsel (other than fees and disbursements relating to the
qualification of the Shares for offering and sale under the
securities laws of the various states and qualifications under NASD
regulations), the Underwriters' out-of-pocket expenses, and any
advertising costs and expenses incurred by the Underwriters
incident to the public offering of the Shares; and provided,
further, that the Selling Shareholders will bear and pay the fees
and expenses of the Selling Shareholders' counsel.
If this Agreement is terminated by you in accordance
with the provisions of Section 10(c), the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel to the
Underwriters.
12. DEFAULT OF SELLING SHAREHOLDERS. Failure or refusal
by any of the Selling Shareholders to sell and deliver on the
Closing Date the Shares agreed to be sold and delivered by such
Selling Shareholder shall in no manner relieve the other Selling
Shareholders or the Company of their respective obligations under
this Agreement. If any Selling Shareholder should fail or refuse
to sell and deliver his Shares, the remaining Selling Shareholders
shall have the right hereby granted to increase, pro rata or
otherwise, the number of Shares to be sold by them hereunder to the
total number of Shares to be sold by all Selling Shareholders as
set forth in Schedule I. If the remaining Selling Shareholders do
not fully exercise the right to increase the number of Shares to be
sold by them, the Underwriters, at your option, will have the right
to elect to purchase or not to purchase the Shares to be sold by
the Company and the remaining Selling Shareholders. In the event
the Underwriters purchase the Shares of the Company and such other
Selling Shareholders pursuant to this Section 12, the Closing Date
shall be postponed for a period of not more than seven days in
order that the Registration Statement and Prospectus or other
documents may be amended or supplemented to the extent necessary
under the provisions of the Act and the Rules and Regulations or
under the securities laws of any jurisdiction. If the Underwriters
determine not to purchase the Shares of the Company and the other
Selling Shareholders, if any, this Agreement shall terminate and
neither the Company nor the Underwriters nor any other Selling
Shareholder shall be under any obligation under this Agreement
except as provided in Section 7 hereof and except for the
obligation of the Company to pay for such expenses as are set forth
in Section 11 hereof. Nothing herein shall relieve a defaulting
Selling Shareholder from liability for his default or from
liability under Section 7 hereof or for expenses imposed by this
Agreement upon such Selling Shareholder.
13. NOTICES. All notices or communications hereunder,
except as herein otherwise specifically provided, shall be in
writing and if sent to the Underwriters shall be mailed, delivered,
sent by facsimile transmission, or telegraphed and confirmed c/o
X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Syndicate, facsimile number (000) 000-0000,
or if sent to the Company shall be mailed, delivered, sent by
facsimile transmission, or telegraphed and confirmed to the Company
at 00 00xx Xxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx 00000, Attention:
Xxxxxxxx X. Xxxxx, facsimile number (000) 000-0000, or if sent to
any Selling Shareholder shall be mailed, delivered, sent by
facsimile transmission or telegraphed and confirmed to such Selling
Shareholder, c/o the Attorney-in-Fact at --------------------------.
Notice to any Underwriter pursuant to Section 7 shall be
mailed, delivered, sent by facsimile transmission, or telegraphed
and confirmed to such Underwriter's address as it appears in the
Underwriters' Questionnaire furnished in connection with the
offering of the Shares or as otherwise furnished to the Company and
the Selling Shareholder.
14. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Underwriters and the Selling
Shareholders, and the Company and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, corporation or
other entity, other than the parties hereto and their respective
successors and assigns and the controlling persons, officers and
directors referred to in Section 7, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any
provision herein contained; this Agreement and all conditions and
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provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person,
corporation or other entity. No purchaser of any of the Shares
from any Underwriter shall be construed a successor or assign by
reason merely of such purchase.
In all dealings with the Company and the Selling
Shareholders under this Agreement you shall act on behalf of each
of the several Underwriters. The Company and the Selling
Shareholders shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of the Underwriters, made or
given by you on behalf of the Underwriters, as if the same shall
have been made or given in writing by the Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any
one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
16. PRONOUNS. Whenever a pronoun of any gender or
number is used herein, it shall, where appropriate, be deemed to
include any other gender and number.
17. APPLICABLE LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Missouri.
If the foregoing is in accordance with your
understanding, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding
agreement among the Company, each of the Selling Shareholders and
the Underwriters.
VALLEY NATIONAL GASES, INC.
By:---------------------------------------------
Title: President
Selling Shareholders Named in Schedule I Hereto
By:--------------------------------------------
Attorney-in-Fact
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule II hereto.
X.X. XXXXXXX & SONS, INC.
XXXXXXXXXXX & CO., INC.
By: X.X. Xxxxxxx & Sons, Inc.
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By:-----------------------------
Title: Senior Vice President
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SCHEDULE I
Number of
Selling Shareholders Firm Shares
-------------------- -----------
Xxxxxxxx X. Xxxxx 37,000
Xxxx X. Buchwack 15,000
Xxxxxxx X. Xxxxxxxxxx 30,000
Total 82,000
======
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SCHEDULE II
Name Number of Shares
---- ----------------
X.X. Xxxxxxx & Sons, Inc. _________
Xxxxxxxxxxx & Co., Inc. __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
________________________ __________
Total __________
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SCHEDULE III
Pursuant to Section 6(g) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx LLP shall furnish letters to the Underwriters to the
effect that:
1. In their opinion, the financial statements and any
supplementary financial information and schedules audited
(including pro forma financial information examined) by them and
included in the Prospectus or the Registration Statement comply as
to form in all material respects with the applicable accounting
requirements of the Act and the applicable Rules and Regulations
thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited interim financial
statements, selected financial data, pro forma financial
information, or condensed financial statements derived from audited
financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which
have been furnished to the Representatives of the Underwriters (the
"Representatives").
2. On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, performing the procedures
specified by the AICPA for a review of interim financial
information as discussed in SAS No. 71, Interim Financial
Information, on the latest available interim financial statements
of the Company and Weldco, Inc., inspection of the minute books of
the Company and Weldco, Inc. since the date of the latest audited
financial statements included in the Prospectus, inquiries of
officials of the Company and Weldco, Inc. responsible for financial
and 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) any material modifications should be made to the
unaudited balance sheet statements of operations,
statements of cash flows, and statements of changes
in Shareholder's equity included in the Prospectus
for them to be in conformity with generally
accepted accounting principles, or such unaudited
statements, included in the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the Act and
the related published Rules and Regulations
thereunder.
(b) any other unaudited income statement data and
balance sheet items included in the Prospectus do
not agree with the corresponding items in the
unaudited consolidated financial statements from
which such data and items were derived, and any
such unaudited data and items were not determined
on a basis substantially consistent with the basis
for the corresponding amounts in the audited
consolidated financial statements included in the
Prospectus.
(c) the unaudited financial statements which were not
included in the Prospectus but from which were
derived any unaudited condensed financial
statements referred to in Clause (a) and any
unaudited income statement data and balance sheet
items included in the Prospectus and referred to in
Clause (b) were not determined on a basis
substantially consistent with the basis for the
audited consolidated financial statements included
in the Prospectus.
(d) any unaudited pro forma condensed financial
statements included in the Prospectus do not comply
as to form in all material respects with the
applicable accounting
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requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of those statements.
(e) as of a specified date not more than five (5) days
prior to the date of such letter, there have been
any changes in the capital stock or any increase in
the long-term debt of the Company, or any decreases
in working capital, net current assets or net
assets or other items specified by the
Representatives, or any changes in any items
specified by the Representatives, in each case as
compared with amounts shown in the latest balance
sheet included in the Prospectus, except in each
case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter.
(f) for the period from the date of the latest
financial statements included in the Prospectus to
the specified date referred to in Clause (e) there
were any decreases in net sales or income from
operations or the total or pro forma per share
amounts of net income or any other changes in any
other items specified by the Representatives, in
each case as compared with the comparable period of
the preceding year and with any other period of
corresponding length specified by the
Representatives, except in each case for changes,
decreases or increases which the Prospectus
discloses have occurred or may occur or which are
described in such letter.
3. 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 (3) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the
Representatives, which are derived from the general accounting
records of the Company for the periods covered by their reports and
any interim or other periods since the latest period covered by
their reports, which appear in the Prospectus, or in Part II of, or
in exhibits and schedules to, the Registration Statement specified
by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and have found them to be in agreement.
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