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EXHIBIT 1
MITCHAM INDUSTRIES, INC.
(A TEXAS CORPORATION)
1,820,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
December________, 1997
Xxxxxxxxx & Company, Inc.
Xxxxxxxx Xxxxxx Refsnes, Inc.
Xxxxxx, Xxxxxxx Inc.
As Representatives of
the Several Underwriters
c/x Xxxxxxxxx & Company, Inc.
Attn: Syndicate Department
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Mitcham Industries, Inc., a Texas corporation (the "Company"), and
certain selling shareholders (the "Selling Shareholders") of the Company named
in Schedule I hereto, hereby confirm their agreement with you as
representatives (the "Representatives") of the underwriters named in Schedule
II hereto (the "Underwriters"), with respect to the issuance and sale by the
Company of an aggregate of 1,800,000 shares (the "Primary Shares") and the sale
by the Selling Shareholders of 20,000 shares (the "Shareholders' Shares") of
the Company's Common Stock, $.01 par value (the "Common Stock"), and the
purchase of the Primary Shares and the Shareholders' Shares by the
Underwriters, acting severally and not jointly. The Company also has agreed to
sell up to 273,000 shares (the "Additional Shares") of Common Stock to cover
over-allotments, if any. The Primary Shares, the Shareholders' Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares."
You have advised us that you desire to purchase the Shares and that
you propose to make a public offering of the Shares as soon as you deem
advisable after the Registration Statement referred to below becomes effective
upon the terms set forth in the Prospectus referred to below.
The terms that follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the date hereof on which
a document incorporated by reference in the Registration Statement is filed.
"Preliminary
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Prospectus" shall mean any preliminary prospectus referred to in Section
1(a)(i) below and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information (as defined
below). "Registration Statement" shall mean the registration statement
referred to in Section 1(a)(i) below, including incorporated documents,
exhibits and financial statements, as amended at the Representation Date (as
defined below) (or, if not effective at the Representation Date, in the form in
which it shall become effective) and, in the event any post- effective
amendment thereto becomes effective prior to the Closing Date (as defined in
Section 2 hereof), shall also mean such registration statement as so amended.
Such term shall include Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A (as defined below). If the Company
files an additional registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) (defined below) (the "Additional
Registration Statement"), all references in this Underwriting Agreement to
"Registration Statement" shall mean the Additional Registration Statement, as
amended at the Effective Date, including the contents of the initial
registration statement incorporated by reference therein and including all
information (if any) deemed to be a part of the Additional Registration
Statement as of its effective time pursuant to Rule 430A(b). The prospectus
constituting a part of the Registration Statement (including the Rule 430A
Information), as from time to time amended or supplemented, is hereinafter
referred to as the "Prospectus", except that if any revised prospectus shall be
provided to the Underwriters by the Company that differs from the prospectus on
file at the Securities and Exchange Commission (the "Commission") at the
Effective Date (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424 of the Act Regulations), the term
"Prospectus" shall refer to each such revised prospectus from and after the
time it is first provided to the Underwriters for such use. "Rule 158", "Rule
415", "Rule 424", "Rule 430A", "Rule 462" and "Regulation S-K" refer to such
rules or regulation under the Securities Act of 1933, as amended (the "Act";
and the rules and regulations under the Act, the "Act Regulations"). "Rule
430A Information" means information with respect to the Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Exchange Act" refers to the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder. Any reference herein to the Registration
Statement, a Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriters as of
the date hereof (such date being referred to as the "Representation Date") and
as of the Closing Date, as follows:
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(i) the Company meets the requirements for use of Form
S-3 under the Act and has filed with the Commission a registration
statement on such Form (Registration No. 333-40507), including a
related preliminary prospectus, and one or more amendments thereto,
including the related preliminary prospectus, each of which has
previously been furnished to the Underwriters, for the registration
under the Act of the offering and sale of the Shares. Such
registration statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, have been declared effective
by the commission in such form. No other document with respect to
such registration statement has heretofore been filed with the
Commission and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission. The
Company will file with the Commission (A) prior to effectiveness of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus), (B) after
effectiveness of such registration statement, if applicable, an
additional registration statement pursuant to Rule 462(b) or (C) after
effectiveness of such registration statement or such additional
registration statement, a final prospectus in accordance with Rules
430A and 424(b)(1) or (4) or Rule 434 of the Act Regulations. The
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information in
the case of clause (B)) required by the Act and the Act Regulations to
be included in the Prospectus with respect to the Shares and the
offering thereof. As filed, such amendment and form of final
Prospectus, or such final Prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Shares and the offering thereof and, except to the
extent the Underwriters shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to the
Underwriters prior to the date hereof;
(ii) on the Effective Date, the Representation Date and
the Closing Date, the Registration Statement did and will, and when
the Prospectus is first filed (if required) in accordance with Rule
424(b) the Prospectus will, comply in all material respects with the
applicable requirements of the Act and the Act Regulations and the
Exchange Act; on the Effective Date, the Representation Date and the
Closing Date, the Registration Statement did not and will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Representation Date and the Closing Date, and on the date of any
filing pursuant to Rule 424(b), the Prospectus did not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, that the Company makes no
representation or warranty as to the information provided in writing
to the Company by or on behalf of the Selling Shareholders or the
Underwriters, expressly for use in the Registration Statement or
Prospectus. The Company agrees that the only information provided in
writing by or on behalf of the Underwriters to the Company, expressly
for use in the Registration Statement or the Prospectus, is that
information contained in the table and the second, fifth, sixth,
seventh and eighth paragraphs following the table in the section of
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the Prospectus entitled "Underwriting" and the last paragraph on the
cover page of the Prospectus;
(iii) no order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Securities Act and
the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Selling Shareholders or the
Underwriters through Xxxxxxxxx & Company, Inc. expressly for use
therein;
(iv) the Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Texas, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify
would not have a Material Adverse Effect. As used herein, the term
"Material Adverse Effect" shall mean an adverse effect on the
financial condition, business, properties, net worth or results of
operations of the Company or its Subsidiary (as hereinafter defined)
that would be, singly or in the aggregate, material to the Company and
the Subsidiary, taken as a whole, whether or not occurring in the
ordinary course of business (a "Material Adverse Effect");
(v) the only significant Subsidiary (as defined in the
Act Regulations) of the Company is the Subsidiary listed on Schedule
III hereto (the "Subsidiary"). The Subsidiary is a corporation duly
organized and validly existing in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority
to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and in the Prospectus, and
is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction where the nature or location of its
properties (owned or leased) or the conduct of its business requires
such registration or qualification, except where the failure so to
register or qualify would not have a Material Adverse Effect;
(vi) each of the Company and the Subsidiary has all
necessary authorizations, approvals, orders, licenses, rights-of-way,
operating rights, easements, certificates and permits of and from, and
has made all declarations and filings with, all regulatory or
governmental officials and bodies, all self-regulatory organizations
and all courts and other tribunals ("Permits"), to own or lease its
respective properties and to conduct its respective businesses
described in the Prospectus and the Registration Statement, except
where failure
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to have obtained or made the same would not have a Material Adverse
Effect, and neither the Company nor the Subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such Permits, if the failure to be so licensed or approved or if
the subject of an unfavorable decision, ruling or finding, would have
a Material Adverse Effect; the Company and the Subsidiary has
fulfilled and performed all its current material obligations with
respect to such Permits and no event has occurred that allows, or
after notice or lapse of time, or both, would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such Permit except where the
nonfulfillment or non- performance or event would not have a Material
Adverse Effect; and the Company and the Subsidiary is in compliance
with all applicable laws, rules, regulations, orders and consents, the
violation of which would have a Material Adverse Effect. The property
and business of the Company and the Subsidiary conform in all material
respects to the descriptions thereof contained in the Prospectus and
the Registration Statement;
(vii) the Company has the authorized capitalization set
forth in the Prospectus under the heading "Description of Capital
Stock," and
(viii) all of the Company's authorized and outstanding
capital stock has been duly authorized, validly issued and is fully
paid and nonassessable and the capitalization of the Company conforms
to the descriptions thereof and the statements made with respect
thereto in the Registration Statement and the Prospectus as of the
date set forth therein. There are no outstanding securities
convertible into or exchangeable for, and no outstanding options,
warrants or other rights to purchase, any shares of the capital stock
of the Company, nor any agreements or commitments to issue any of the
same, except as described in the Registration Statement and the
Prospectus, and there are no preemptive or other rights to subscribe
for or to purchase, and no restrictions upon the voting or transfer
of, any capital stock of the Company pursuant to the Company's Amended
and Restated Certificate of Incorporation or Amended and Restated
By-laws or any agreement or other instrument to which the Company is a
party, except as described in the Registration Statement and the
Prospectus;
(ix) all the outstanding shares of capital stock of the
Subsidiary have been duly authorized and are validly issued, fully
paid and nonassessable and were not issued in violation of or subject
to any preemptive or similar rights. There are no outstanding
securities convertible into or exchangeable for, and no outstanding
options, warrants or other rights to purchase, any shares of the
capital stock of any Subsidiary, nor any agreements or commitments to
issue any of the same. Except as otherwise set forth in the
Registration Statement and the Prospectus, all outstanding shares of
capital stock of the Subsidiary are owned by the Company, directly or
indirectly through another Subsidiary, free and clear of any security
interests, liens, encumbrances, equities or other claims;
(x) each of the Company and the Subsidiary has good and
indefeasible title to all real property and good and marketable title
to all personal property owned by it, including those properties
described in the Registration Statement and Prospectus, in each case
free and
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clear of all liens, charges, encumbrances and restrictions, except
such as are described in the Registration Statement and Prospectus or
such as would not have a Material Adverse Effect. Each of the Company
and the Subsidiary has valid, subsisting and enforceable leases for
the properties described in the Registration Statement and the
Prospectus as leased by it with such exceptions as are described in
the Registration Statement and the Prospectus or that in the aggregate
would not have a Material Adverse Effect;
(xi) the Company has all requisite power, authority,
authorizations, approvals, orders, licenses, certificates and permits
to enter into this Agreement and to carry out the provisions and
conditions hereof, and to issue and deliver the Shares to the
Underwriters as provided herein. This Agreement has been duly
authorized, executed and delivered by the Company;
(xii) the Shares to be issued and sold by the Company have
been duly and validly authorized for issuance by the Company, and the
Company has full corporate power and authority to issue, sell and
deliver the Shares; and, when such Shares are issued and delivered
against payment therefor as provided by this Agreement, the Shares
will have been validly issued, fully paid and nonassessable, and the
issuance of such Shares will not be subject to any statutory
preemptive rights or similar statutory rights or any other preemptive
or similar rights. All corporate action required to be taken by the
Company for the authorization, issuance and sale of the Shares has
been duly and validly taken;
(xiii) Xxxx + Associates LLP are independent accountants
with respect to the Company and the Subsidiary as required by the Act;
(xiv) the consolidated financial statements and related
notes and schedules included in the Registration Statement or in the
Prospectus present fairly the financial position of the Company and
the Subsidiary, on the basis stated in the Registration Statement, as
of the respective dates thereof and the consolidated statements of
income, shareholders' equity and cash flows of the Company and the
Subsidiary, for the respective periods covered thereby, in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise
disclosed in the Registration Statement and the Prospectus. The
selected financial information included in the Registration Statement
or the Prospectus presents fairly the information shown therein and has
been compiled on a basis consistent with that of the audited financial
statements of the Company included therein. The pro forma financial
information in the Registration Statement or in the Prospectus complies
in all material respects with the applicable accounting requirements of
Article 11 of Regulation S-X promulgated by the Commission and presents
fairly the information shown therein; the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein. No other financial statements or schedules
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of the Company and the Subsidiary are required by the Exchange Act,
the Act or the Act Regulations to be included in the Registration
Statement or Prospectus;
(xv) the Shares conform in all material respects to the
descriptions thereof in the Registration Statement and Prospectus;
(xvi) since the respective dates as of which information is
provided in the Registration Statement and Prospectus, except as
otherwise specifically stated therein, there has been no change or
development with respect to the condition (financial or otherwise) or
business of the Company and the Subsidiary, taken as a whole, whether
or not arising in the ordinary course of business, that would have a
Material Adverse Effect;
(xvii) neither the Company nor any Subsidiary is in
violation of its certificate of incorporation or by-laws or other
organizational documents. Neither the Company nor any Subsidiary is,
nor with the passage of time or the giving of notice or both would be,
in violation of any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or the Subsidiary, or of
any judgment, order or decree of any court or governmental agency or
body or of any arbitrator having jurisdiction over the Company or the
Subsidiary, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
mortgage, loan agreement, note, bond, debenture, credit agreement or
any other evidence of indebtedness or in any agreement, contract,
indenture, lease or other instrument to which the Company or the
Subsidiary is a party or by which it may be bound, or to which any of
the property or assets of the Company or the Subsidiary is subject,
the effect of which violation or default in performance or observance
would have a Material Adverse Effect;
(xviii) there is no action, suit or proceeding pending before
or by any court, arbitrator or governmental agency or body or, to the
Company's knowledge, threatened against the Company or the Subsidiary
or to which any of their respective property is subject (A) that is
required to be described in the Registration Statement or the
Prospectus but is not described as required or (B) that, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect. There is no agreement, contract, indenture, lease or other
document or instrument that is required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement that is not described or filed as required;
(xix) except for the Selling Shareholders, no person has
any right to the registration of any security of the Company by reason
of the filing of the Registration Statement with the Commission or the
consummation of the transactions contemplated hereby, which right has
not been waived or lapsed;
(xx) other than as set forth in the Registration Statement
and the Prospectus, there are no legal or governmental proceedings
pending to which the Company or the Subsidiary
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is a party or of which any property of the Company or subsidiary is
the subject; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency
or threatened by others;
(xxi) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940 and is not subject to
registration under such Act;
(xxii) as of the date of the Prospectus, neither the Company
nor the Subsidiary currently is planning any probable acquisitions for
which disclosure of pro forma financial information would be required
by the Act;
(xxiii) except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), since the
respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
except as otherwise stated therein, (A) neither the Company nor the
Subsidiary (1) has issued any securities other than in connection with
the exercise of any outstanding options, (2) incurred any material
liability or obligations, direct or contingent, for borrowed money,
(3) entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiary, taken as
a whole, (4) entered into any transaction with an affiliate of the
Company (as the term "affiliate" is defined in Rule 405 of the Act
Regulations) that would otherwise be required to be disclosed in the
Prospectus or the Registration Statement, or (5) declared or paid any
dividend on its capital stock, or made any other distribution to its
equity holders, (B) there has not been any material change in the
capital stock or other equity, or material increase in the short-term
or long-term debt, of the Company or the Subsidiary and (C) there has
been no change or development with respect to the condition (financial
or otherwise) or business of the Company and the Subsidiary, taken as
a whole, whether or not arising in the ordinary course of business,
that would have a Material Adverse Effect;
(xxiv) each of the Company and the Subsidiary, directly or
indirectly, maintains insurance covering its properties, operations,
personnel and businesses; in the Company's reasonable judgment, such
insurance provides coverage against such losses and risks as is
adequate in accordance with customary industry practice to protect the
Company and its businesses; neither the Company nor the Subsidiary has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance; all such insurance is
outstanding and duly in force;
(xxv) the Company has not distributed and, prior to the
later to occur of (A) the Closing Date and (B) completion of the
distribution of the Shares, will not distribute without your prior
consent any offering material in connection with the offering and sale
of the Shares other than the Registration Statement, the Prospectus or
other materials, if any, permitted by the Act;
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(xxvi) prior to the Closing Date, the Shares will be duly
authorized for listing on the Nasdaq National Market upon official
notice of issuance;
(xxvii) neither the Company nor the Subsidiary is involved in
any labor dispute or, to the knowledge of the Company, is any dispute
threatened, other than disputes that would not have a Material Adverse
Effect;
(xxviii) neither the Company nor the Subsidiary nor,
to the best of either of their knowledge, any employee or agent of the
Company or the Subsidiary, has made any payment of funds of the
Company or the Subsidiary or received or retained any funds of a
character required to be disclosed in the Prospectus;
(xxix) the Company and the Subsidiary have filed (or have
obtained extensions thereto) all federal, state and local or foreign
tax returns that are required to be filed, which returns are complete
and correct in all material respects, and have paid all taxes shown on
such returns and all assessments with respect thereto to the extent
that the same have become due, except those taxes that are being
contested or protested in good faith by the Company or its Subsidiary
or which the failure to file or pay would not have a Material Adverse
Effect;
(xxx) except for the shares of capital stock of the
Subsidiary and the Company's other subsidiary listed on Schedule III,
neither the Company nor the Subsidiary owns any shares of stock or any
other securities of any corporation or has any equity interest in any
firm, partnership, association or other entity other than as reflected
in the consolidated financial statements included in the Registration
Statement and the Prospectus;
(xxxi) neither the execution or delivery of this Agreement,
the offer, issuance, sale or delivery of the Shares nor the
consummation by the Company of the terms of this Agreement (A)
requires the consent, approval, authorization or order of any court or
governmental agency or body, except such as have been obtained under
the Act and such as may be required under the state securities or blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters or such as may be
required by the National Association of Securities Dealers, Inc. (the
NASD") and such other approvals as have been obtained, (B) will
conflict with, result in a breach of, or constitute a default under
the terms of any indenture, agreement, lease or other instrument to
which the Company or the Subsidiary is a party or by which any of them
or any of their respective properties may be bound, or will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Subsidiary pursuant to the
terms of any agreement or instrument to which any of them is a party
or by which any of them may be bound or to which any of the property
or assets of any of them is subject, (C) will conflict with or violate
any law, order, statute, regulation, consent or memorandum of
understanding applicable to the Company or the Subsidiary of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or the Subsidiary (in
the case of (B) or (C) above, where such conflict, breach, default or
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violation, individually or in the aggregate, would have a Material
Adverse Effect), or (D) will conflict with or violate the certificate
of incorporation or by-laws or other organizational documents of the
Company or any subsidiary;
(xxxii) the Company has not taken, directly or indirectly, any
action designed to cause or result in or that has constituted or that
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares;
(xxxiii) the Company and the Subsidiary (A) are in
compliance with any and all applicable federal, state, local and
foreign laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (B) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their business and (C)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not have a Material Adverse
Effect; and
(xxxiv) there are no costs or liabilities, to the Company's
knowledge after due inquiry, associated with the effect of
Environmental Laws on the business, operations and properties of the
Company and its Subsidiary that would have a Material Adverse Effect.
(b) Each Selling Shareholder, severally and not jointly,
represents and warrants to the Underwriters as of the Representation Date and
as of the Closing Date, as follows:
(i) Such Selling Shareholder now has, and on the Closing
Date will have, valid title to the Shares to be sold by the Selling
Shareholder pursuant to this Agreement, free and clear of any security
interests, liens, encumbrances, equities or other claims, including,
without limitation, any restrictions or transfer (except for
restrictions imposed by applicable federal or state securities laws)
other than as specified on the certificate(s) representing such
Shares.
(ii) Such Selling Shareholder now has, and on the Closing
Date will have, full legal right, power and authorization, and any
approval required by law (except such as may be required under the Act
or such as may be required by the NASD or under state securities of
blue sky laws governing the purchase and distribution of the Shares),
to sell, assign, transfer and deliver the Shares to be sold by the
Selling Shareholders pursuant to this Agreement in the manner provided
in this Agreement, and upon delivery of and payment for such Shares
hereunder, the several Underwriters will acquire valid title to such
Shares free and clear of any adverse claims, assuming that the
Underwriters have acquired such Shares for value, in good faith and
without notice of any adverse claim.
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(iii) This Agreement, the Power of Attorney and the Custody
Agreement referred to in (vii) below have been duly authorized,
executed and delivered by or on behalf of such Selling Shareholder.
(iv) Neither the execution and delivery of this Agreement,
the Power of Attorney or the Custody Agreement by or on behalf of the
Selling Shareholder nor the consummation of the transactions herein
contemplated by or on behalf of such Selling Shareholder requires any
consent, approval, authorization or order of, or filing or
registration with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may be
required under the Act or such as may be required by the NASD or under
state securities or blue sky laws governing the purchase and
distribution of the Shares) or conflicts or will conflict with or
constitutes or will constitute a breach of, or default under, or
violates or will violate, any agreement, indenture or other instrument
to which the Selling Shareholder is a party or by which the Selling
Shareholder is or may be bound or to which any of the Selling
Shareholder's property or assets is subject, or any statute, law,
rule, regulation, ruling, judgment, injunction, order or decree
applicable to the Selling Shareholder or to any property or assets of
the Selling Shareholder, which breach, default or violation would
impair the Selling Shareholder's ability to perform under this
Agreement and would have any adverse impact on the Company or the
Underwriters under this Agreement.
(v) The information with respect to the Selling
Shareholder contained in the section entitled "Selling Shareholders"
in the Prospectus does not and will not on the Closing Date contain
an 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, in light of the circumstances under which they were made, not
misleading.
(vi) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the
Shares, except for the lock-up arrangements described in the
Prospectus.
(vii) Certificates in negotiable form representing all of
the Shares to be sold by such Selling Shareholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and
delivered by such Selling Stockholder to Norton, Jacobs, Xxxx &
McTopy, L.L.P. ("NJKM"), as custodian (the "Custodian"), and such
Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
attorney"), appointing Xxxxx X. Xxxxxxx, Xx. and Xxxxxx Xxxx and each
of them as such Selling Shareholder's attorney-in- fact (the
"Attorney-in-Fact") with 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, to authorize the delivery of the Shares to be sold by
such Selling Shareholder hereunder and otherwise to act on behalf
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of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the 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; the
arrangements made by such Stockholder for such custody, and the
appointment by such Selling Shareholder of the Attorney-in-Fact by the
Power of Attorney, are to that extent irrevocable except as otherwise
provided herein and therein; the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling
Shareholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Shareholder
or any such executor or trustee should die or become incapacitated, or
if any such estate or trust should be terminated, or if any such
partnership or corporation should be dissolved, 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 the Selling Shareholder in accordance with the terms and
conditions of this Agreement and of the Custody Agreement; and actions
taken by the Attorney-in-Fact pursuant to the Powers of Attorney shall
be as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Custodian, the Attorney-in-Fact, or either of them, shall have
received notice of such death, incapacity, termination, dissolution or
other event.
(ix) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions
herein contemplated, such Selling Shareholder will deliver to you
prior to or at the First Time of Delivery (as hereinafter defined) a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(c) Any certificate signed by any officer of the Company or the
Selling Shareholders delivered to the Underwriters or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Company or the Selling Shareholders, as the
case may be, to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) Subject to the terms and conditions set forth herein, and
subject to adjustments as you may determine to avoid fractional shares:
(i) the Company agrees to sell to each Underwriter,
severally and not jointly, and, on the basis of the representations
and warranties herein contained and subject to the terms and
conditions herein set forth, each Underwriter, severally and not
jointly, agrees to
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purchase from the Company, at a purchase price of _____________ per
share (the "Initial Price"), the aggregate number of Primary Shares
that bears that same proportion to the aggregate number of Primary
Shares to be issued and sold by the Company as the number of shares set
forth opposite the name of such Underwriter in Schedule II (or such
number of Primary Shares increased as provided in Section 9 hereof)
bears to the aggregate number of Shares to be sold by the Company and
the Selling Shareholders. The Company will have no obligation to sell
to the Underwriters any of such Primary Shares that are being issued
and sold by the Company hereunder unless the Underwriters purchase all
of the Primary Shares hereunder; and
(ii) the Selling Shareholders agree, severally and not
jointly, to sell to each Underwriter, severally and not jointly, and,
on the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, each Underwriter,
severally and not jointly, agrees to purchase from the Selling
Shareholders at the Initial Price, the aggregate number of
Shareholders' Shares that bears the same proportion to the aggregate
number of Shareholders' Shares to be sold by the Selling Shareholder as
the number of Shareholders' Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Shareholders'
Shares increased as provided in Section 9 hereof) bears to the
aggregate number of Shares to be sold by the Company and the Selling
Shareholders, and the Selling Shareholders will have no obligation to
sell to the Underwriters any of the Shareholders' Shares to be sold by
the Selling Shareholders hereunder unless the Underwriters purchase all
of such Shareholders' Shares hereunder.
(b) The Company grants to the Underwriters an option to purchase
all or any part of the Additional Shares at the Initial Price. Additional
Shares shall be purchased from the Company, severally and not jointly, for the
accounts of the Underwriters in proportion to the number of Primary Shares set
forth in Schedule II hereto opposite the name of such Underwriter. Such option
may be exercised only to cover over-allotments in the sale of the Primary
Shares by the Underwriters and may be exercised in whole or in part at any time
on or before 12:00 noon, New York City time, on the business day before the
Primary Shares Closing Date (as hereinafter defined), and only once thereafter
within 30 days after the date of the Prospectus, in each case upon written or
telegraphic notice, or oral or telephonic notice confirmed by written or
facsimile notice, by the Underwriters to the Company no later than 12:00 noon,
New York City time, on the business day before the Primary Shares Closing Date
or at least two business days before the Additional Shares Closing Date (as
hereinafter defined), as the case may be, setting forth the number of
Additional Shares to be purchased and the time and date (if other than the
Primary Shares Closing Date) of such purchase.
(c) Payment of the purchase prices for, and delivery of, the
Primary Shares and the Shareholders Shares to be purchased by the Underwriters
shall be made at the offices of Xxxxxxxxx & Company, Inc., 00 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon by the
Underwriters and the Company, at 10:00 A.M., New York City time, on the third
or fourth business day following the date of the Registration Statement becomes
effective (or, if the Company elected to rely upon Rule 430A, the fourth
business day after the date of execution of this
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Page 14
Agreement), or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriters and the Company ( such time and
date of payment and delivery being herein called the "Primary Shares Closing
Date"). Payment shall be made to the Company and the Selling Shareholders, as
the case may be, by wire transfer in same day funds payable to the order of the
Company or the Selling Shareholders, as applicable, against delivery to the
Underwriters of the Primary Shares or Shareholders' Shares.
(d) Payment of the purchase price for, and delivery of, the
Additional Shares to be purchased by the Underwriters shall be made at the
office as set forth above or at such other place as shall be agreed upon by the
Underwriters and the Company at the time and on the date (which may be the same
as, but in no event shall be earlier than, the Primary Shares Closing Date)
specified in the notice referred to in Section 2(b) (such time and date of
delivery and payment being herein called the "Additional Shares Closing Date").
The Primary Shares Closing Date and the Additional Shares Closing Date are
called, individually, the "Closing Date" and together, the "Closing Dates."
Payment shall be made to the Company by wire transfer in same day funds payable
to the order of the Company against delivery to the Underwriters of the
Additional Shares.
(e) Certificates representing the Shares shall be issued in such
denominations and registered in such names as the Underwriters may request in
writing at least two business days before the Primary Shares Closing Date or,
in the case of Additional Shares, on the day of notice of exercise of the
option as described in Section 2(b). The certificates representing the Shares
will be made available for examination and packaging by the Underwriters not
later than 1:00 P.M., New York City time, on the last business day prior to the
Primary Shares Closing Date (or the Additional Shares Closing Date in the case
of the Additional Shares) at such place as is designated by the Underwriters.
SECTION 3. Covenants of the Company. The Company covenants with each of the
Underwriters as follows:
(a) the Company will use its best efforts to cause the
Registration Statement, if not effective at the Representation Date, and any
amendment thereof, to become effective, as promptly as possible after the
filing thereof. The Company will not file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus to which the
Underwriters shall reasonably object in writing after a reasonable opportunity
to review such amendment or supplement. Subject to the foregoing sentences in
this clause (a), if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus or supplement to the
Prospectus is otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, or such supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the Underwriters of
such timely filing. The Company will promptly advise the Underwriters (i) when
the Registration Statement, if not effective at the Representation Date, and
any amendment thereto, shall have become effective, (ii) when the Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (iii) when any amendment to the
Registration Statement shall have been filed or become effective, (iv) of any
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Page 15
request by the Commission for any amendment of the Registration Statement or
supplement to any Prospectus or for any additional information, (v) of the
receipt by the Company of any notification of, or if the Company otherwise has
knowledge of, the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening
of any proceeding for that purpose and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the lifting thereof;
(b) if, at any time when a Prospectus relating to the Shares is
required to be delivered under the Act or the Act Regulations, any event occurs
as a result of which the Prospectus as then amended or supplemented would
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,
in the light of the circumstances under which they were made, not misleading,
or if it shall be necessary to amend the Registration Statement or amend or
supplement the Prospectus to comply with the Act or the Act Regulations, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 3, an amendment or supplement
that will correct such statement or omission or effect such compliance;
(c) the Company consents to the use of the Prospectus in
accordance with the provisions of the Act and with the securities or blue sky
laws of the jurisdictions in which the Shares are offered by the Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in connection with the sales
by any Underwriter or dealer. The Company will comply with all requirements
imposed upon it by the Act, as now and hereafter amended, so far as necessary
to permit the continuance of sales of or dealing in the Shares in accordance
with the provisions hereof and the Prospectus;
(d) as soon as practicable, the Company will make generally
available to its security holders and to the Underwriters a consolidated
earnings statement or statements of the Company and the Subsidiary covering a
twelve-month period beginning after the Effective Date that will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act Regulations;
(e) the Company will furnish to the Representatives, without
charge, four signed copies of the Registration Statement (including exhibits
thereto and all documents incorporated by referenced therein) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, or the Act Regulations, as many copies of the Prospectus and all
amendments and supplements thereto as the Underwriters may reasonably request;
(f) during the period of five years hereafter, the Company will
furnish to you, as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year; and the Company will
furnish to you (i) as soon as available, a copy of each report or definitive
proxy statement of the Company filed with the Commission under the Exchange Act
or mailed to
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Page 16
the shareholders, and (ii) from time to time, such other information concerning
the Company as you may reasonably request, provided that prior to the Company's
furnishing any such other information that is non-public, you shall enter into
an agreement, in such form as the Company shall reasonably request, with
respect to the confidentiality of such information;
(g) the Company will not, and will cause each of its executive
officers and directors to enter into agreements with the Underwriters in the
form set forth in Exhibit A to the effect that they will not, for a period of
180 days following the date of the Prospectus, without prior written consent of
Xxxxxxxxx & Company, Inc., offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any shares of
Common Stock or any securities convertible into, or exchangeable for, shares of
Common Stock; provided, however, that the Company may issue and sell Common
Stock pursuant to any stock bonus plan, stock grant plan or stock option plan
in effect as of the date of the Prospectus;
(h) the Company will comply with all the provisions of any
undertakings contained in the Registration Statement;
(i) the Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in accordance with the description
set forth in the "Use of Proceeds" section of the Prospectus;
(j) the Company will cooperate with the Underwriters and their
counsel in connection with endeavoring to obtain and maintain the qualification
or registration, or exemption from qualification, of the Shares for offer and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate; provided,
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action that
would subject it to taxation or general service of process in any jurisdiction
where it is not now so subject; and
(k) the Company will cause the Shares to be duly listed on the
Nasdaq National Market.
SECTION 4. Covenants of the Selling Shareholders. The Selling Shareholders
covenant with each of the Underwriters as follows:
(a) The Selling Shareholders shall cooperate to the extent
reasonably necessary to cause the Registration Statement, if not effective at
the Representation Date, and any amendment thereof, to become effective, as
promptly as possible after the filing thereof.
(b) Without prejudice to any rights the Selling Shareholders may
have against the Company, the Selling Shareholders shall pay all federal and
other taxes, if any, on the transfer or sale of the Shares being sold by the
Selling Shareholders to the Underwriters.
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Page 17
(c) The Selling Shareholders shall do or perform all things
required to be done or performed by the Selling Shareholders prior to the
Primary Shares Closing Date to satisfy all conditions precedent to delivery of
and the payment for the Shares to be sold by the Selling Shareholders pursuant
to this Agreement.
(d) The Selling Shareholders will not at any time, directly or
indirectly, take any action intended, or that might reasonably be expected, to
cause or result in, or that will cause, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(e) The Selling Shareholders will advise the Representatives
promptly, and if requested by the Representatives will confirm such advice in
writing, of any change in the information relating to the Selling Shareholders
contained in the Registration Statement under the caption "Selling
Shareholders."
SECTION 5. Payment of Expenses. The Company will pay, or reimburse if paid
by the Underwriters, all actual and reasonable costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
under this Agreement, including (i) the fees, disbursements and expenses of
counsel and accountants for the Company and the Selling Shareholders and all
other expense in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the mailing and delivery of copies
thereof to the Underwriters and dealers; (ii) the cost of reproducing the
Agreement Among Underwriters, this Agreement, the Selling Agreement, any Dealer
Agreements, the Underwriters' Questionnaire and the Blue Sky Memorandum (in
both preliminary and final form); (iii) all expenses in connection with
qualification of the Shares for offering and sale under state securities laws
as provided in Section 3(j) hereof, including filing and registration fees and
the fees, disbursements and expenses of counsel for the Underwriters in
connection with such qualification and in connection with Blue Sky surveys;
(iv) the filing fees incident to securing any required review by the NASD; (v)
the cost of preparing stock certificates; (vi) all fees of the Company's
transfer agent and registrar; (vii) any fees for including the Shares on the
Nasdaq National Market; and (viii) all other costs and expenses incident to the
performances of its obligations hereunder that are not otherwise specifically
provided for in this Section.
If this Agreement is terminated by the Underwriters because of any
failure or refusal on the part of the Company or the Selling Shareholders to
comply with the terms or fulfill any of the conditions of this Agreement, the
Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters. The Company shall not in any event be liable to
any of the Underwriters for consequential damages including loss of anticipated
profits from the transactions covered by this Agreement.
SECTION 6. Conditions of the Underwriters' Obligation. The obligation of the
Underwriters to purchase the Shares hereunder is subject to the continued
accuracy of the representations and warranties of the Company and the Selling
Shareholders herein contained, to the accuracy of the
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statements of the Company and the Selling Shareholders made in any certificates
pursuant to the provision hereof, to the performance by the Company and the
Selling Shareholders of its obligations hereunder and to the following further
conditions:
(a) the Registration Statement shall have come effective, and you
shall have received notice thereof, not later than _____ p.m., Washington D.C.
time, on the date hereof, or such later time and date as shall be approved by
the Representatives and the Company and shall remain effective at the Closing
Date. No stop order suspending the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings therefor initiated or
threatened by the Commission. No order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Shares under
the securities or blue sky laws of any jurisdiction shall be in effect or
proceedings therefor initiated or threatened by the Commission or the
authorities of any such jurisdiction. If the Company has elected to rely upon
Rule 430A, the price of the Shares and any price-related or other information
previously omitted from the effective Registration Statement pursuant to Rule
430A shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period, and, prior to the Closing Date, the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirement of Rule 430A;
(b) subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business, properties,
condition (financial or other) or results of operations of the Company and the
Subsidiary, taken as a whole, which, in the reasonable judgment of the
Underwriters, materially impairs the investment quality of the Shares and
constitutes a Material Adverse Effect; (ii) any material loss or interference
with the business or properties of the Company or the Subsidiary from fire,
explosion, flood or other casualty, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental
action, order or decree, that is not set forth in the Registration Statement
and the Prospectus, if in the reasonable judgment of the Underwriters any such
development makes it impracticable or inadvisable to proceed with completion of
the sale of and payment for the Shares; (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or The Nasdaq
National Market, or any setting or minimum prices for trading on such exchange
or system, or any suspension of trading of any securities of the Company on any
exchange or system or in the over-the-counter market; (iv) any banking
moratorium declared by federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Shares;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted
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against the Company or the Subsidiary or any of their respective officers or
directors in their capacities as such, before or by any federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, or arbitrator, in which litigation or proceeding an
unfavorable ruling, decision or finding would have a Material Adverse Effect;
(d) each of the representations and warranties of each Selling
Shareholder contained herein shall be true and correct at the Closing Date, as
if made at the Closing Date, and all covenants and agreements contained herein
to be performed on the part of each Selling Shareholder, and all conditions
contained herein to be fulfilled or complied with by each Selling Shareholder
at or prior to the Closing Date, shall have been duly performed, fulfilled or
complied with, and the Representatives shall have received a certificate to
such effect, dated the Closing Date and signed by or on behalf of the Selling
Shareholders;
(e) the Underwriters shall have received an opinion from Norton,
Jacobs, Xxxx & XxXxxx, L.L.P., counsel for the Company, satisfactory in form
and substance to counsel for the Underwriters, dated as of each Closing Date,
to the effect set forth in Exhibit B;
(f) the Underwriters shall have received a favorable opinion,
dated as of each Closing Date, of Xxxxxx & Xxxxxx L.L.P., counsel for the
Underwriters, with respect to such matters as may be reasonably requested by
the Underwriters, and you shall have provided such counsel with such papers and
information as they may reasonably request to enable them to provide such
opinion;
(g) on the Primary Shares Closing Date, the Underwriters shall
have received an opinion from legal counsel for the Selling Shareholders,
satisfactory in form and substance to counsel for the Underwriters, dated as of
the Primary Shares Closing Date, to the effect set forth in Exhibit C;
(h) the following conditions contained in clauses (i), (ii) and
(iii) of this Section 6(h) shall have been satisfied on and as of each Closing
Date and the Company shall have furnished to the Underwriters a certificate of
the Company, signed by the President and the principal financial or accounting
officer of the Company, dated such Closing Date to the effect that the signers
or such certificate have carefully examined the Registration Statement, the
Prospectus, any supplement or amendment to the Prospectus, and this Agreement
and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions under this Agreement on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
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Page 20
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no change to the
financial condition of the Company that would have a Material Adverse
Effect.
(i) At the Representation Date and at each Closing Date, Xxxx +
Associates LLP shall have furnished to the Underwriters and the Company and the
Selling Shareholders a letter or letters, dated respectively as of the date of
this Agreement and each Closing Date, in form and substance satisfactory to the
Underwriters, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial and statistical information
pertaining to the Company and the Subsidiary in the Registration Statement and
the Prospectus.
(j) At the Representation Date, the Company shall have furnished
to the Underwriters a letter substantially in the form of Exhibit A hereto from
each executive officer and director of the Company and the Selling
Shareholders, addressed to the Underwriters, in which each such person agrees
not to offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock beneficially
owned by such person or any securities convertible into, or exchangeable for,
shares of Common Stock for a period of 180 days following the date of the
Prospectus without the prior written consent of Xxxxxxxxx & Company, Inc.
(k) At the Closing Date, counsel for the Underwriters shall have
been furnished with such information, certificates and documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Shares as contemplated herein and related proceedings, or to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, or otherwise in
connection with the offering contemplated hereby; and all opinions and
certificates mentioned above or elsewhere in this Agreement shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
If any condition specified in this Section 6 shall have not been fulfilled in
all material respects when and as required to be fulfilled, this Agreement may
be terminated by the Underwriters by notice to the Company and such termination
shall be without liability of any party to any other party except as provided
in Section 5.
SECTION 7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and its respective officers, shareholders, employees, directors and
agents and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and against any
loss expense, damage, liability or claim (including the reasonable cost of
investigating such claim) that, jointly or severally, any such Underwriter or
any such officer, shareholder, employee, director, agent or controlling person
may incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, damage, liability or
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claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof) or
any omission or alleged omission to state a material fact required to be stated
in such Registration Statement or necessary to make the statements made therein
not misleading or any untrue statement or alleged untrue statement of a
material fact contained in a Prospectus (the term Prospectus for the purpose of
this Section 7 being deemed to include any Preliminary Prospectus, the
Prospectus, the Prospectus as amended or supplemented and any document filed
under the Exchange Act and incorporated by reference into the Prospectus) or
any omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
the Company will not be liable in any such case to the extent any such loss,
expense, damage, liability or claim arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission that has been
made therein or omitted therefrom in reliance upon and in conformity with the
information provided in writing to the Company by or on behalf of the Selling
Shareholders or any Underwriter, expressly for use in the Registration
Statement or the Prospectus; and provided, further that with respect to any
untrue statement or omission or alleged untrue statement or omission made in
any Preliminary Prospectus the indemnity agreement contained in this Section
7(a) shall not inure to the benefit of any such indemnified Underwriter or its
respective officers, shareholders, employees, directors and agents, and the
Company shall not be liable to any such indemnified Underwriter or its
respective officers, shareholders, employees, directors and agents, from whom
the person asserting any such losses, claims, expense, damage, or liabilities
purchased the Shares concerned, to the extent that any such loss, claim,
expense, damage or liability of such indemnified Underwriter or its respective
officers, shareholders, employees, directors, and agents results from the fact
that there was not sent or given to such person at or prior to the written
confirmation of the sale of such shares to such person, a copy of the
Prospectus, as the same may be amended or supplemented, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such Preliminary Prospectus was corrected
in such Prospectus and the Company had previously furnished copies thereof to
such indemnified Underwriter on a timely basis to permit the Prospectus (as the
same may be amended or supplemented) to be sent or given. The Company agrees
that the only such information provided in writing by or on behalf of any
Underwriter to the Company, expressly for use in the Registration Statement or
the Prospectus, is that information contained in the table and the second,
fifth, sixth, seventh and eighth paragraphs following the table in the section
of the Prospectus entitled "Underwriting" and the last paragraph on the cover
page of the Prospectus. The foregoing indemnity agreement shall be in addition
to any liability that the Company may otherwise have.
(b) The Selling Shareholders agree to indemnify, defend and hold
harmless each Underwriter and its respective officers, shareholders, employees
and directors and any person who controls any Underwriter within the meaning of
Section 15 of the Act from and against any loss, expense, liability or claim
(including the reasonable cost of investigating such claim) that, jointly or
severally, any such Underwriter or any such officer, shareholder, employee,
director or controlling person may incur under the Act, the Exchange Act or
otherwise, as such expenses are incurred,
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insofar as such loss, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
supplied by the Selling Shareholders for use in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment
thereof) or any omission or alleged omission to state a material fact required
to be stated in such Registration Statement or necessary to make the statements
made therein not misleading or any untrue statement or alleged untrue statement
of a material fact contained in a Prospectus (the term Prospectus for the
purpose of this Section 7 being deemed to include any Preliminary Prospectus,
the Prospectus, the Prospectus as amended or supplemented and any document
filed under the Exchange Act and incorporated by reference into the Prospectus)
or any omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 7(b) shall not inure to the benefit of any
such indemnified Underwriter or its respective officers, shareholders,
employees and directors, and the Selling Shareholders shall not be liable to
any such indemnified Underwriter or its respective officers, shareholders,
employees and directors, from whom the person asserting any such losses,
claims, damage, or liabilities purchased the Shares concerned, to the extent
that any such loss, claim, damage or liability of such indemnified Underwriter
or its respective officers, shareholders, employees and directors results from
the fact that there was not sent or given to such person at or prior to the
written confirmation of the sale of such shares to such person, a copy of the
Prospectus, as the same may be amended or supplemented, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such Preliminary Prospectus was corrected
in such Prospectus and the Company had previously furnished copies thereof to
such indemnified Underwriter on a timely basis to permit the Prospectus (as the
same may be amended or supplemented) to be sent or given, and provided further,
that the liability of the Selling Shareholders pursuant hereto shall not exceed
an amount equal to the net proceeds received by the Selling Shareholders from
the sale of its Shares hereunder to the Underwriter. The Underwriters agree
that the only information provided in writing by or on behalf of the Selling
Shareholders expressly for use in the Registration Statement is that
information contained in the section of the Prospectus entitled "Selling
Shareholders."
(c) Each Underwriter agrees to indemnify, defend and hold harmless
the Selling Shareholders, the Company and their respective officers,
shareholders, employees and directors and any person who controls either of
them within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act from and against any loss, expense, damage, liability or claim (including
the reasonable cost of investigating such claim) that the Selling Shareholders,
the Company or any such officer, shareholder, employee, director or controlling
person may incur under the Act, the Exchange Act or otherwise to the same
extent as the provisions of Section 7(a) above, but only insofar as such loss,
expense, damage, liability or claim arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission made in reliance
or in conformity with information relating to such Underwriter furnished in
writing to the Company by or on behalf of such Underwriter, expressly for use
in the Registration Statement or the Prospectus. The Selling Shareholders and
the Company agree that the only information provided in writing by or on behalf
23
Page 23
of the Underwriters to the Company, expressly for use in the Registration
Statement or the Prospectus, is that information contained in the table and the
second, fifth, sixth, seventh and eighth paragraphs following the table in the
section of the Prospectus entitled "Underwriting" and the last paragraph on the
cover page of the Prospectus.
(d) If any action is brought against an indemnified party under
this Section 7, the indemnified party or parties shall promptly notify the
indemnifying party in writing of the institution of such action (provided that
the failure to give such notice shall not relieve the indemnifying party of any
liability that it may have pursuant to this Agreement, unless and to the extent
the indemnifying party did not otherwise learn of such action and such failure
has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the indemnifying party shall assume the defense of such
action, including the employment of counsel and payment of reasonable expenses.
The indemnified party or parties shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by the indemnifying party
in connection with the defense of such action, (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to take charge of the defense of such action within a reasonable time
after notice of the institution of such action or (iii) the named parties to
any such proceeding (including any impleaded parties) include both an
indemnified party and an indemnifying party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between the named parties (in which case the indemnifying party shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying party and paid as incurred; provided that
the indemnifying party shall only be responsible for the fees and expenses of
one counsel for the indemnified party or parties hereunder. Anything in this
paragraph to the contrary notwithstanding, the indemnifying party shall not be
liable for any settlement of any such claim or action effected without its
written consent, which consent shall not be unreasonably withheld.
(e) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under subsection (a), (b) or (c) of this
Section 7 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as the total proceeds from the offering (net of
underwriting discounts
24
Page 24
and commissions but before deducting expenses) received by the Company and the
Selling Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company, the Selling
Shareholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of
the losses, damages, expenses, liabilities and claims referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any claim or action.
(f) The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in Section 7(e) above. Notwithstanding the provisions of this Section 7,
(i) no Underwriter shall be required to contribute any amount in excess of the
underwriting discount received by it by reason of such untrue statement or
alleged untrue statement or omission or alleged omission, (ii) the Selling
Shareholders shall not be required to contribute any amount in excess of the
gross proceeds received by the Selling Shareholders from the sale of the shares
pursuant to this Agreement, and (iii) 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.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
The respective indemnity and contribution agreements contained in Section 7,
and the covenants, representations and warranties of the Company and the
Selling Shareholders contained in this Agreement or contained in certificates
of officers of the Company and the Selling Shareholders submitted pursuant
hereto, shall remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Underwriter
or any of its respective officers, employees, directors, shareholders, agents
or any person who controls any Underwriters, or by or on behalf of the Company
or the Selling Shareholders or any of the officers or directors or any
controlling person of the Company or the Selling Shareholders, as the case may
be, and will survive delivery of and payment for the Shares.
SECTION 9. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Shares hereunder on either the Primary
Shares Closing Date or the Additional Shares Closing Date and the aggregate
number of Shares that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of Shares that the
Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company and the
Selling Shareholders for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date the non-defaulting Underwriters shall be obligated severally, in
proportion to
25
Page 25
their respective commitments hereunder, to purchase the Shares that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Shares
with respect to which such default or defaults occur exceeds 10% of the total
number of Shares that the Underwriters are obligated to purchase on such
Closing Date and arrangements satisfactory to the Representatives and the
Company and the Selling Shareholders for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Shareholders, except as provided in this Section 9
(provided that if such default occurs with respect to the Additional Shares
after the Primary Shares Closing Date, this Agreement will not terminate as to
the Primary Shares). As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
SECTION 10. Notices. All notices and other communications hereunder will be
in writing and shall be deemed to have been duly given if mailed or transmitted
by standard form of telecommunication. Notices to the Underwriters shall be
directed to the Underwriters in care of:
Jefferies & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
with a copy to: Xxxx X. Xxxxx
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
or, if sent to the Company, directed to:
Mitcham Industries, Inc.
P. O. Box 1175
00000 Xxxxxxx 00 Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx.
with a copy to: Xxxxxxx X. XxXxxx
Norton, Jacobs, Xxxx & XxXxxx, L.L.P.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
or, if sent to the Selling Shareholders, directed to:
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Page 26
00000 Xxxxxxxx Xxxxxx #000
Xxxxxxx, Xxxxx 00000
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company and the Selling Shareholders and
their respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to provide any
person, firm or corporation, other than the Underwriters and the Company and
the Selling Shareholders and their respective successors and legal
representatives and the controlling persons, officers, employees, directors and
shareholders referred to in Sections 7 and 8 and their respective heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Underwriters, the Company and the Selling
Shareholders and their respective successors and legal representatives, and
such controlling persons, shareholders, officers and directors and their
respective heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Shares from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in such State. Specified times of day
refer to New York time, unless otherwise specified.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
27
Page 27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Company and the Underwriters in accordance with its terms.
Very truly yours,
MITCHAM INDUSTRIES, INC.
By:
--------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President, Chief Executive Officer
and Chairman of the Board
SELLING SHAREHOLDERS
By:
--------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: As Attorney-In-Fact Acting On
Behalf of the Selling Shareholders
Xxxxx X. Xxxxxxx III Trust and
Xxxxxxxx X. Xxxxxxx Trust
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
JEFFERIES & COMPANY, INC.
XXXXXXXX XXXXXX REFSNES, INC.
XXXXXX, XXXXXXX INC.
As Representatives of the Several Underwriters
JEFFERIES & COMPANY, INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
28
SCHEDULE I
SELLING SHAREHOLDERS
Xxxxx X. Xxxxxxx III Trust 10,000 Shares
Xxxxxxxx X. Xxxxxxx Trust 10,000 Shares
29
SCHEDULE II
UNDERWRITERS
Number of
Name of Underwriter Primary Shares
to be Purchased
------------------------------------------------------ -----------------
30
SCHEDULE III
SUBSIDIARIES
Significant Subsidiary - Mitcham Canada Ltd.
Other Subsidiary - Mitcham Acquisition Ore, Inc., a Texas corporation wholly
owned by the Company, organized on December __, 1997. For the purpose
of an anticipated tax-free reorganization under Section 368(a)(2)(c)
of the Internal Revenue Code of 1986, as amended, with North American
Western Data System, Inc., as disclosed in the Prospectus under
"Recent Developments."
31
EXHIBIT A
___________________, 1997
Jefferies & Company, Inc.
Xxxxxxxx Xxxxxx Refsnes, Inc.
Xxxxxx, Xxxxxxx Inc.
c/o Jefferies & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
The undersigned understands that Jefferies & Company, Inc., Xxxxxxxx
Xxxxxx Refsnes, Inc., and Xxxxxx, Xxxxxxx Inc., as Representatives of the
several underwriters (the "Underwriters"), are entering into an Underwriting
Agreement with Mitcham Industries, Inc. (the "Company"), providing for the
public offering (the "Public Offering") of the Company's common stock, par
value $0.01 per share (the "Common Stock"), pursuant to the Company's
Registration Statement on Form S-3 (Reg. No. 333-40507) (the "Registration
Statement").
In order that the Company may pursue the Public Offering, the
undersigned, during the period commencing the date hereof and ending ___ days
after the date of the final prospectus relating to the Public Offering:
(i) agrees not to (x) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock which may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations
of the Securities and Exchange Commission by virtue of the
undersigned's power to dispose, or direct the disposition of, such
shares or securities) or (y) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences
associated with the ownership of any Common Stock (regardless of
whether any of the transactions described in clause (x) or (y) is to
be settled by the delivery of Common Stock, or such other securities,
in cash or otherwise), without the prior written consent of Xxxxxxxxx
& Company, Inc., provided that the foregoing restrictions shall not
apply to intra-family transfers and transfers for estate planning
purposes;
(ii) agrees not to make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock
or any securities convertible into
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32
or exercisable or exchangeable for Common Stock, without the prior
written consent of Xxxxxxxxx & Company, Inc.;
(iii) authorizes the Company to cause the transfer agent to
decline to transfer and/or to note stop transfer restrictions on the
transfer books and records of the Company with respect to any shares
of Common Stock and any securities convertible into or exercisable or
exchangeable for Common Stock for which the undersigned is the record
holder and, in the case of any such shares or securities for which the
undersigned is the beneficial but not the record holder by virtue of
the undersigned's power to dispose, or direct the disposition of, such
shares or securities, agrees to use reasonable efforts to cause the
record holder to cause the transfer agent to decline to transfer
and/or to note stop transfer restrictions on such books and records
with respect to such shares or securities.
It is understood and agreed that the restrictions set forth herein are
not applicable to the shares of Common Stock being sold by the undersigned in
the Public Offering, if any.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into the agreements set forth herein, and
that, upon request, the undersigned will execute any additional documents
necessary or desirable in connection with the enforcement hereof. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned and any obligations of the undersigned shall be
binding upon the heirs, personal representatives, successors, and assigns of
the undersigned.
Very truly yours,
----------------------------------------
(Name)
---------------------------
---------------------------
---------------------------
(Address)
---------------------------
(Social Security No.)
Number of shares of Common Stock owned:
----------------
Certificate Numbers:
----------------
----------------
Number of shares of Common Stock issuable upon exercise of stock options:
-------
A-2
33
EXHIBIT B
(i) each of the Company and the Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Texas and the province of Alberta, Canada,
respectively, with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus;
(ii) each of the Company and the Subsidiary is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
where the nature or location of its properties (owned or leased) or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify would not have a Material Adverse Effect;
(iii) each outstanding share of Common Stock has been duly and
validly authorized and issued and is fully paid and nonassessable, and has not
been issued and is not owned or held in violation of any preemptive right of
shareholders. The Company owns all of the shares of capital stock of the
Subsidiary and such shares have been duly and validly authorized and issued,
are fully paid and non-assessable, and to such counsel's knowledge are owned
directly or indirectly by the Company, free and clear of all liens, claims,
security interests, restrictions, shareholders' agreements, voting trusts and
any other encumbrances whatsoever. There is no commitment, plan or arrangement
to issue, and no outstanding option, warrant or any security or other
instrument which by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company, except as described in the
Prospectus. There is outstanding no security or other instrument which by its
terms is convertible into, exercisable for or exchangeable for capital stock of
the Company or the Subsidiary, except as described in the Prospectus;
(iv) to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority
or body or any arbitrator involving the Company or the Subsidiary required to
be disclosed in the Prospectus that is not adequately disclosed in the
Prospectus;
(v) to such counsel's knowledge, there is no contract or other
document of a character which is required to be filed as an exhibit to the
Registration Statement which has not been filed or incorporated by reference as
an exhibit as required;
(vi) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no proceedings
for that purpose have been instituted or threatened;
(vii) the statements in the Registration Statement and Prospectus,
insofar as they are descriptions of contracts, agreements or other legal
documents, are accurate in all material respects and present fairly the
information required to be shown;
B-1
34
(viii) this Agreement has been duly authorized, executed and
delivered by the Company and the Company has full corporate power and authority
to enter into this Agreement; no consent, approval, authorization or order of
any court or governmental agency or body is required in connection with the
execution and delivery of this Agreement or for the issuance and sale by the
Company of the Shares, except such as have been obtained under the Act;
(ix) neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, will result in a breach
of, or constitute a default under, (a) the terms of any indenture or other
agreement or instrument (i) to which the Company or the Subsidiary is a party
or by which either is bound and (ii) that is either filed as an exhibit to the
Registration Statement or is identified to such counsel as being material to
the Company and the Subsidiary, taken as a whole, and listed on a schedule to
such counsel's opinion, (b) any law, statute, rule, order, regulation or decree
of any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any Subsidiary of which such
counsel is aware and that is known by such counsel to be applicable to the
Company or any Subsidiary (in any case under (a) or (b) where such conflict,
breach or default would have a Material Adverse Effect and other than Federal
or state securities or blue sky laws, as to which such counsel need not express
an opinion in this subparagraph) or (c) the certificate of incorporation or
by-laws of the Company;
(x) the Shares have been duly and validly authorized by the
Company for issuance, and the Company has full corporate power and authority to
issue, sell and deliver the Shares; and, when the Shares are issued and
delivered against payment therefor as provided by this Agreement, the Shares
will have been validly issued and will be fully paid and nonassessable, and the
issuance of such Shares will not be subject to any statutory preemptive rights
or similar statutory rights; the certificates for the Shares are in due and
proper form under Texas law and the by-laws of the Company and conform with the
form of certificates duly authorized by the Board of Directors of the Company;
the Shares, when issued, will conform in all material respect to the
description thereof contained in the Prospectus and the Registration Statement
under the caption "Description of Capital Stock";
(xi) neither the Company nor the Subsidiary is an "investment
company" as defined under the Investment Company Act or subject to registration
under such Act; and
(xii) the Registration Statement and the Prospectus (except the
financial statements, supporting schedules and other information of a financial
nature included therein, as to which such counsel does not express any opinion)
comply as to form in all material respects with the requirements of the Act and
the applicable Act Regulations.
In passing upon the form of the Registration Statement and the
Prospectus, such counsel has necessarily assumed the correctness and
completeness of the statements made therein. Such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except to the extent set forth in subparagraph (vi) and the last
sentence of subparagraph (ix)), and such counsel has not independently verified
the accuracy, completeness or fairness of such statements (except as
aforesaid). Without limiting the foregoing, such counsel assumes no
responsibility for and has not independently verified the accuracy,
completeness or fairness of the financial statements and other
B-2
35
financial data included in the Registration Statement and has not examined the
financial or reserve records from which such statements and data are derived.
Such counsel notes that, although certain portions of the Registration
Statement have been included therein on the authority of "experts" within the
meaning of the Act, such counsel is not an expert with respect to any portion
of the Registration Statement. However, such counsel shall state that such
counsel has participated in conferences with officers and other representatives
of the Company, representatives of the independent accountants of the Company,
and with the underwriters' representatives and counsel, at which the contents
of the Registration Statement and Prospectus and related matters were
discussed. Such counsel has also reviewed certain corporate documents
furnished to them by the Company. Based on such participation and review
(relying as to materiality to a certain extent upon the officers and the other
representatives of the Company), and subject to the limitations described
above, such counsel shall state that no information has come to such counsel's
attention that causes them to believe that the Registration Statement, at the
time it became effective or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date or as of the Closing
Date, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Texas and the federal
laws of the United States of America, to the extent applicable.
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36
EXHIBIT C
(i) the Agreement has been duly executed and delivered by or on
behalf of the Selling Shareholder;
(ii) to such counsel's knowledge, the Selling Shareholder has full
power and authority to sell, assign, transfer and deliver the Shares;
(iii) to such counsel's knowledge, the execution and delivery of the
Agreement by or on behalf of the Selling Shareholder and the sale of the Shares
pursuant to the terms thereof will not conflict with or violate, result in a
breach of or constitute a default under the terms or provisions of any
agreement, indenture, mortgage or other instrument to which the Selling
Shareholder is a party or by which it or any of its assets or property is bound
and which has been identified to such counsel as being material to the Selling
Shareholder and its subsidiaries, taken as a whole, or any court order or
decree or any laws, rule, or regulation (except such as may be required under
the Act or such as may be required by the NASD or under state securities or
blue sky laws governing the purchase and distribution of the Shares) applicable
to the Selling Shareholder or to any of the property or assets of the Selling
Shareholder, which breach, default or violation would impair the Selling
Shareholder's ability to sell the Shares pursuant to the terms of the
Agreement; and
(iv) upon delivery of the Shares that the Selling Shareholder has
agreed to sell pursuant to the Agreement and payment therefor as contemplated
therein and assuming the Underwriters are acquiring the Shares in good faith
without notice of any adverse claims, the Underwriters will acquire valid title
to such Shares free and clear of any adverse claims.
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