GULF ISLAND FABRICATION, INC.
(A LOUISIANA CORPORATION)
COMMON STOCK
UNDERWRITING AGREEMENT
DATED: , 1997
GULF ISLAND FABRICATION, INC.
UNDERWRITING AGREEMENT
April __, 1997
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX RICE & COMPANY L.L.C.
As Representatives of the Several
Underwriters Named in Schedule A hereto
c/o Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
Gulf Island Fabrication, Inc., a Louisiana corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A
(collectively, the "Underwriters") an aggregate of 2,000,000 shares of Common
Stock, no par value per share (the "Common Stock"), of the Company (the "Firm
Shares"). The Firm Shares are to be sold to each Underwriter, acting severally
and not jointly, in such amounts as are set forth in Schedule A opposite the
name of such Underwriter.
The Company also grants to the Underwriters the option described in Section
2 to purchase, on the same terms as the Firm Shares, up to 300,000 additional
shares of Common Stock (the "Option Shares") solely to cover over-allotments.
The Firm Shares, together with all or any part of the Option Shares, are
collectively herein called the "Shares."
Section 1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-21863) with respect
to the Shares, including a preliminary form of prospectus, has been prepared by
the Company in conformity with the requirements of the Securities Act of 1933,
as amended (the "1933 Act"), and the applicable rules and regulations (the "1933
Act Regulations") of the Securities and Exchange Commission (the "Commission"),
and has been filed with the Commission; and such amendments to such registration
statement as may have been required prior to the date hereof have been filed
with the Commission, and such amendments have been similarly prepared. Copies
of such registration statement and amendment or amendments and of each related
preliminary prospectus, and the exhibits, financial statements and schedules, as
amended and revised, have been delivered to you. The Company has prepared in
the same manner, and proposes so to file with the Commission, one of the
following: (i) prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, (ii) if the Company
does not rely on Rule 434 of the 1933 Act, a final prospectus in accordance with
Rules 430A and 424(b) of the 1933 Act Regulations or (iii) if the Company relies
on Rule 434 of the 1933 Act, a term sheet relating to the Shares that shall
identify the preliminary prospectus that it supplements containing such
information as is required or permitted by Rules 434, 430A and 424(b) of the
1933 Act. The Company also may file a related registration statement with the
Commission pursuant to Rule 462(b) of the 1933 Act for the purpose of
registering certain additional shares of Common Stock, which registration
statement will be effective upon filing with the Commission. As filed, such
amendment, any registration statement filed pursuant to Rule 462(b) of the 1933
Act and any term sheet and form of final prospectus, or such final prospectus,
shall include all Rule 430A Information (as defined below) and, except to the
extent that you shall agree in writing to a modification, shall be in all
respects in the form furnished to you prior to the date and time that this
Agreement was executed and delivered by the parties hereto, or, to the extent
not completed at such date and time, shall contain only such specific additional
information and other changes (beyond that contained in the latest preliminary
prospectus) as the Company shall have previously advised you in writing would be
included or made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes effective
and, in the event any post-effective amendment thereto becomes effective prior
to the Closing Time (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall also include
all Rule 430A Information contained in any Prospectus and any Term Sheet (as
hereinafter defined) and deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the 1933 Act Regulations. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean (a) if the Company relies on Rule 434 of the
1933 Act Regulations, the Term Sheet relating to the Shares that is first filed
pursuant to Rule 424(b)(7) of the 1933 Act Regulations, together with the
Preliminary Prospectus identified therein that such Term Sheet supplements or
(b) if the Company does not rely on Rule 434 of the 1933 Act Regulations, the
prospectus relating to the Shares in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations or, if no
filing pursuant to Rule 424(b) of the 1933 Act Regulations is required, shall
mean the form of final prospectus included in the Registration Statement at the
time such Registration Statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted pursuant to Rule 430A of the 1933 Act Regulations to be
omitted from the Registration Statement when it becomes effective. The term
"462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the 1933 Act
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(including the Registration Statement and any Preliminary Prospectus or
Prospectus incorporated therein at the time such registration statement becomes
effective). The term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 of the 1933 Act Regulations. Any reference to the
"date" of a Prospectus that includes a Term Sheet shall mean the date of such
Term Sheet.
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and no proceedings for that purpose have been
instituted or threatened by the Commission or the state securities or blue sky
authority of any jurisdiction, and each Preliminary Prospectus and any amendment
or supplement thereto, at the time of filing thereof, conformed in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations, and
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter expressly
for use in the Registration Statement or any 462(b) Registration Statement.
(c) When the Registration Statement and any 462(b) Registration Statement
shall become effective, when any Term Sheet that is part of the Prospectus is
filed with the Commission pursuant to Rule 434, when any Prospectus is first
filed pursuant to Rule 424(b) of the 1933 Act Regulations, when any amendment to
the Registration Statement or any 462(b) Registration Statement becomes
effective, and when any supplement to the Prospectus or any Term Sheet is filed
with the Commission and at the Closing Time and Date of Delivery (as hereinafter
defined), (i) the Registration Statement, the 462(b) Registration Statement, the
Prospectus, the Term Sheet and any amendments thereof and supplements thereto
will conform in all material respects with the applicable requirements of the
1933 Act and the 1933 Act Regulations, and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term Sheet nor
any amendment or supplement thereto will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter expressly for use in the
Registration Statement or any 462(b) Registration Statement.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Louisiana with all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions in which the
ownership or leasing of its properties or the nature or conduct of its
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business as described in the Registration Statement and the Prospectus requires
such qualification, except where the failure to do so would not have a material
adverse effect on the condition (financial or other), business, properties, net
worth or results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole.
(e) All of the Company's subsidiaries are named on an exhibit to the
Registration Statement (each a "Subsidiary" and collectively the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the state
of its incorporation with all requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement and the Prospectus. Each such entity is duly qualified to
do business and is in good standing as a foreign corporation in each other
jurisdiction in which the ownership or leasing of its properties or the nature
or conduct of its business as described in the Registration Statement and the
Prospectus conducted requires such qualification, except where the failure to do
so would not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of such
Subsidiaries.
(f) The Company has full corporate right, power and authority to enter into
this Agreement, to issue, sell and deliver the Shares as provided herein and to
consummate the transactions contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws of general applicability
relating to or affecting creditors' rights, or by general principles of equity
whether considered at law or at equity and except to the extent enforcement of
the indemnification provisions set forth in Section 6 of this Agreement may be
limited by federal or state securities laws or the public policy underlying such
laws.
(g) Each consent, approval, authorization, order, license, certificate,
permit, registration, designation or filing by or with any governmental agency
or body necessary for the valid authorization, issuance, sale and delivery of
the Shares, the execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby has been
made or obtained and is in full force and effect, except as may be required
under applicable state securities laws.
(h) Neither the issuance, sale and delivery by the Company of the Shares,
nor the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby will conflict with or
result in a breach or violation of any of the terms and provisions of, or (with
or without the giving of notice or the passage of time or both) constitute a
default under the charter or bylaws of the Company or the Subsidiaries,
respectively, or under any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which the Company or the
Subsidiaries, respectively, is a party or to which the Company or the
Subsidiaries, respectively, any of their respective
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properties or other assets is subject; or any applicable statute, judgment,
decree, order, rule or regulation of any court or governmental agency or body
applicable to any of the foregoing or any of their respective properties; or
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or the Subsidiaries, respectively.
(i) The Shares to be issued and sold to the Underwriters hereunder have been
validly authorized by the Company. When issued and delivered against payment
therefor as provided in this Agreement, the Shares will be duly and validly
issued, fully paid and nonassessable. No preemptive rights of shareholders
exist with respect to any of the Shares which have not been satisfied or waived.
No person or entity holds a right to require or participate in the registration
under the 1933 Act of the Shares pursuant to the Registration Statement which
has not been satisfied or waived; and, except as set forth in the Prospectus, no
person holds a right to require registration under the 1933 Act of any shares of
Common Stock of the Company at any other time which has not been satisfied or
waived.
(j) The Company's authorized, issued and outstanding capital stock is as
disclosed in the Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Company's capital stock
contained in the Prospectus.
(k) All of the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and are owned directly or indirectly through another Subsidiary by the Company
free and clear of all liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever. Other than the Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
other corporation or any ownership interest in any partnership, joint venture or
other association.
(l) Except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of its Subsidiaries convertible
into or exchangeable for any capital stock of the Company or any such
Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from
the Company or any such Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (iii) obligations of
the Company or any such Subsidiary to issue any shares of capital stock, any
such convertible or exchangeable securities or obligation, or any such warrants,
rights or options.
(m) The Company and the Subsidiaries have good and marketable title to all
real property, if any, and good title to all personal property owned by them, in
each case free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in the
Prospectus or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company and the Subsidiaries; and any real property and
buildings held
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under lease by the Company or any Subsidiary are held under valid, existing and
enforceable leases, with such exceptions as are disclosed in the Prospectus or
are not material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company or such Subsidiary.
(n) The financial statements of the Company and its consolidated
Subsidiaries included in the Registration Statement and Prospectus present
fairly the financial position of the Company and its consolidated Subsidiaries
as of the dates indicated and the results of operations and cash flows for the
Company and its consolidated Subsidiaries for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statements of Dolphin Services, Inc., Dolphin Sales and
Rentals, Inc. and Dolphin Steel Sales, Inc. (collectively, "Dolphin Services")
included in the Registration Statement and Prospectus present fairly the
financial position of Dolphin Services as of the dates indicated and the results
of operations and cash flows for Dolphin Services for the periods specified, all
in conformity with generally accepted accounting principles applied on a
consistent basis. The financial statement schedules included in the
Registration Statement and the historical financial amounts in the Prospectus
under the captions "Prospectus Summary -- Summary Financial and Operating Data",
"Capitalization" and "Selected Financial and Operating Data" fairly present the
information shown therein and have been compiled on a basis consistent with the
historical financial statements included in the Registration Statement and the
Prospectus. The unaudited pro forma financial information (including the
related notes) included in the Prospectus or any Preliminary Prospectus complies
as to form in all material respects to the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations, and management of the Company
believes that the assumptions underlying the pro forma adjustments are
reasonable. Such pro forma adjustments have been properly applied to the
historical amounts in the compilation of the information and such information
fairly presents with respect to the Company and the Subsidiaries, the financial
position, results of operations and other information purported to be shown
therein at the respective dates and for the respective periods specified.
(o) Price Waterhouse LLP, who have examined and are reporting upon the
audited financial statements and schedules of the Company and Dolphin Services
included in the Registration Statement, are, and were during the periods covered
by their reports included in the Registration Statement and the Prospectus,
independent public accountants within the meaning of the 1933 Act and the 1933
Act Regulations.
(p) None of the Company or the Subsidiaries has sustained, since December
31, 1996, any material loss or interference with its business from fire,
explosion, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or arbitrators' or court or governmental
action, order or decree; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as
otherwise stated in the Registration Statement and Prospectus, there has not
been (i) any material change in the capital stock, long-term debt, obligations
under capital leases or short-
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term borrowings of the Company, or the Subsidiaries, or (ii) any material
adverse change, or any development which could reasonably be seen as involving a
prospective material adverse change, in or affecting the business, prospects,
properties, assets, results of operations or condition (financial or other) of
the Company, or the Subsidiaries.
(q) Neither the Company nor its Subsidiaries is in violation of its
respective charter, or by-laws, and no default exists, and no event has
occurred, nor state of facts exists, which, with notice or after the lapse of
time to cure or both, would constitute a default in the due performance and
observance of any obligation, agreement, term, covenant, consideration or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any such entity is a party
or to which any such entity or any of its properties is subject. None of the
Company or its Subsidiaries is in violation of, or in default with respect to,
any statute, rule, regulation, order, judgment or decree, except as may be
properly described in the Prospectus or such as in the aggregate do not now have
and will not in the future have a material adverse effect on the financial
position, results of operations or business of each such entity, respectively.
(r) There is not pending or threatened any action, suit, proceeding, inquiry
or investigation against the Company, the Subsidiaries or any of their
respective officers and directors or to which the properties, assets or rights
of any such entity are subject, before or brought by any court or governmental
agency or body or board of arbitrators that is required to be described in the
Registration Statement or the Prospectus but is not described as required.
(s) The descriptions in the Registration Statement and the Prospectus of the
contracts, leases and other legal documents therein described present fairly the
information required to be shown, and there are no contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required.
(t) The Company owns, possesses or has obtained all material permits,
licenses, franchises, certificates, consents, orders, approvals and other
authorizations of governmental or regulatory authorities or other entities as
are necessary to own or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted, or as contemplated in the
Prospectus to be conducted, and the Company has not received any notice of
proceedings relating to revocation or modification of any such licenses,
permits, franchises, certificates, consents, orders, approvals or
authorizations.
(u) The Company owns or possesses adequate license or other rights to use
all patents, trademarks, service marks, trade names, copyrights, software and
design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively "Intangibles") necessary to entitle
the Company to conduct its business as described in the Prospectus, and the
Company has not received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others
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with respect to any Intangibles which could materially and adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and, none of the Company, the Subsidiaries, or any employee or
agent thereof, has made any payment of funds of the Company or the Subsidiaries,
or received or retained any funds and no funds of the Company or the
Subsidiaries have been set aside to be used for any payment, in each case in
violation of any law, rule or regulation.
(w) Each of the Company and the Subsidiaries has filed on a timely basis all
necessary federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown as
due thereon; and no tax deficiency has been asserted against any such entity,
nor does any such entity know of any tax deficiency which is likely to be
asserted against any such entity which if determined adversely to any such
entity, could materially adversely affect the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of any such
entity, respectively. All tax liabilities are adequately provided for on the
respective books of such entities.
(x) The Company and its Subsidiaries maintain insurance (issued by insurers
of recognized financial responsibility) of the types and in the amounts
generally deemed adequate for their respective businesses and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(y) Each of the Company, the Subsidiaries, and their officers, directors or
affiliates has not taken and will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in or
constitute the stabilization or manipulation of any security of the Company or
to facilitate the sale or resale of the Shares.
(z) The Company is not, will not become as a result of the transactions
contemplated hereby, or will not conduct its respective businesses in a manner
in which the Company would become, "an investment company," or a company
"controlled" by an
8
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 2. Sale and Delivery of the Shares to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the Closing Time (as
defined below), the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A (the proportion which each Underwriter's share of the
total number of the Firm Shares bears to the total number of Firm Shares is
hereinafter referred to as such Underwriter's "underwriting obligation
proportion"), at a purchase price of $__________ per share.
(b) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters to purchase, severally and not
jointly, up to an additional 300,000 Option Shares at the same purchase price as
shall be applicable to the Firm Shares. The option hereby granted will expire if
not exercised within the thirty (30) day period after the date of the
Prospectus by giving written notice to the Company. The option granted hereby
may be exercised in whole or in part (but not more than once) by you, as
representatives of the Underwriters, only for the purpose of covering over-
allotments that may be made in connection with the offering and distribution of
the Firm Shares. The notice of exercise shall set forth the number of Option
Shares as to which the several Underwriters are exercising the option, and the
time and date of payment therefore and of issuance and delivery thereof. Such
time and date of payment, issuance and delivery (the "Date of Delivery") shall
be determined by you but shall not be later than three full business days after
the exercise of such option, nor in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option Shares, the Option
Shares as to which the option is exercised shall be purchased by the
Underwriters, severally and not jointly, in their respective underwriting
obligation proportions.
(c) Payment of the purchase price for and delivery of certificates in
definitive form representing the Firm Shares shall be made at the offices of
Xxxxxx Xxxxxx & Company, Inc., 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 or at
such other place as shall be agreed upon by the Company and you, at 10:00 a.m.,
either (i) on the third full business day after the execution of this Agreement,
or (ii) at such other time not more than ten full business days thereafter as
you and the Company shall determine (unless, in either case, postponed pursuant
to the term hereof), (such date and time of payment and delivery being herein
called the "Closing Time"). In addition, in the event that any or all of the
Option Shares are purchased by the Underwriters, payment of the purchase price
for and delivery of certificates in definitive form representing the Option
Shares shall be made at the offices of Xxxxxx Xxxxxx & Company, Inc. in the
manner set forth above, or at such other place as the Company and you shall
determine, on the Date of Delivery as specified in the notice from you to the
9
Company. Payment for the Firm Shares and the Option Shares shall be made to the
Company by wire transfer in same-day funds to the accounts designated to the
Underwriters in writing by the Company against delivery to you for the
respective accounts of the Underwriters of the Shares to be purchased by them.
(d) The certificates representing the Shares to be purchased by the
Underwriters shall be in such denominations and registered in such names as you
may request in writing at least two full business days before the Closing Time
or the Date of Delivery, as the case may be. The certificates representing the
Shares will be made available at the offices of Xxxxxx Xxxxxx & Company, Inc. or
at such other place as Xxxxxx Xxxxxx & Company, Inc. may designate for
examination and packaging not later than 10:00 a.m. at least one full business
day prior to the Closing Time or the Date of Delivery, as the case may be.
(e) After the Registration Statement becomes effective, you intend to offer
the Shares to the public as set forth in the Prospectus, but after the initial
public offering of such Shares you may in your discretion vary the public
offering price.
Section 3. Certain Covenants of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (if not yet effective at the date and time that
this Agreement is executed and delivered by the parties hereto). If the Company
elects to rely upon Rule 430A of the 1933 Act Regulations or the filing of the
Prospectus is otherwise required under Rule 424(b) of the 1933 Act Regulations,
the Company will comply with the requirements of Rule 430A and will file the
Prospectus, properly completed, pursuant to the applicable provisions of Rule
424(b), or a Term Sheet pursuant to and in accordance with Rule 434, within the
time period prescribed. If the Company elects to rely upon Rule 462(b), the
Company shall file a 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time on the date of
this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee. The Company will notify
you immediately, and confirm the notice in writing, (i) when the Registration
Statement, 462(b) Registration Statement or any post-effective amendment to the
Registration Statement, shall have become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission to
amend the Registration Statement or 462(b) Registration Statement or amend or
supplement the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any 462(b) Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or
of the institution or threatening of any proceeding for any such purposes. The
Company will use every reasonable effort to prevent the issuance of any such
stop order
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or of any order preventing or suspending such use and, if any such order is
issued, to obtain the withdrawal thereof at the earliest possible moment.
(b) The Company will not at any time file or make any amendment to the
Registration Statement, or any amendment or supplement (i) to the Prospectus, if
the Company has not elected to rely upon Rule 430A, (ii) if the Company has
elected to rely upon Rule 430A, to either the Prospectus included in the
Registration Statement at the time it becomes effective or to the Prospectus
filed in accordance with Rule 424(b) or any Term Sheet filed in accordance with
Rule 434, or (iii) if the Company has elected to rely upon Rule 462(b), to any
462(b) Registration Statement in any case if you shall not have previously been
advised and furnished a copy thereof a reasonable time prior to the proposed
filing, or if you or counsel for the Underwriters shall object to such amendment
or supplement.
(c) The Company has furnished or will furnish to you, at its expense, as
soon as available, four copies of the Registration Statement as originally filed
and of all amendments thereto, whether filed before or after the Registration
Statement becomes effective, copies of all exhibits and documents filed
therewith and signed copies of all consents and certificates of experts, as you
may reasonably request, and has furnished or will furnish to each Underwriter,
one conformed copy of the Registration Statement as originally filed and of each
amendment thereto.
(d) The Company will deliver to each Underwriter, at the Company's expense,
from time to time, as many copies of each Preliminary Prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will deliver
to each Underwriter, at the Company's expense, as soon as the Registration
Statement shall have become effective and thereafter from time to time as
requested during the period when the Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Prospectus (as supplemented or
amended) as each Underwriter may reasonably request. The Company will comply to
the best of its ability with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue of the
Prospectus or any Term Sheet in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which
the Prospectus or any Term Sheet as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made when such Prospectus or any Term Sheet is delivered,
not misleading, or, if for any reason it shall be necessary during such same
period to amend or supplement the Prospectus or any Term Sheet in order to
comply with the 1933 Act or the rules and regulations thereunder, the Company
will notify you and upon your request prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus or any Term Sheet or a
supplement to the Prospectus or any Term
11
Sheet or an amendment or supplement to any such incorporated document which will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of issue of the
Prospectus or any Term Sheet, upon your request but at the expense of such
Underwriter, the Company will prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus or any Term
Sheet complying with Section 10(a)(3) of the 1933 Act.
(e) The Company will use its best efforts to qualify the Shares for offering
and sale under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications in effect
for as long as may be necessary to complete the distribution of the Shares;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to make any undertakings in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be required by
the laws of each jurisdiction in which the Shares have been qualified as above
provided.
(f) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the 1933 Act
Regulations), an earnings statement (in reasonable detail but which need not be
audited) complying with the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder.
(g) The Company will use the net proceeds received by it from the sale of
the Shares in the manner specified in the Prospectus under the caption "Use of
Proceeds."
(h) During a period of five years after the date hereof, the Company will
furnish to you: (i) concurrently with furnishing to its securityholders,
statements of operations of the Company for each of the first three quarters in
the form furnished to the Company's securityholders; (ii) concurrently with
furnishing to its securityholders, a balance sheet of the Company as of the end
of such fiscal year, together with statements of operations, of cash flows and
of securityholders' equity of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent public accountants;
(iii) as soon as they are available, copies of all reports (financial or
otherwise) mailed to securityholders; (iv) as soon as they are available, copies
of all reports and financial statements furnished to or filed with the
Commission, any securities exchange or the National Association of Securities
Dealers, Inc. (the "NASD"); (v) every material press release in respect of the
Company or its affairs which is released by the Company; and (vi) any additional
information of a public nature concerning the Company or its business that you
may reasonably request. During such five-year period, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company are consolidated with any subsidiaries, and shall be
12
accompanied by similar financial statements for any significant subsidiary that
is not so consolidated.
(i) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, the Company will
not, without the prior written consent of Xxxxxx Xxxxxx & Company, Inc., offer,
pledge, issue, sell, contract to sell, grant any option for the sale of, or
otherwise dispose of, or announce any offer, pledge, sale, grant of any option
to purchase or other disposition of, directly or indirectly, any shares of
Common Stock or securities convertible into, exercisable for or exchangeable for
shares of Common Stock, except as provided in Section 2 of this Agreement and
other than pursuant to the Company's Long-Term Incentive Plan.
(j) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Stock.
(k) The Company will cause the Shares to be listed, subject to notice of
issuance, on the Nasdaq Stock Market and will use commercially reasonable best
efforts to maintain the listing of the Shares on the Nasdaq Stock Market.
(l) The Company is familiar with the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder, and has in the past conducted
its affairs, and will in the future conduct its affairs, in such a manner so as
to ensure that the Company was not and will not be an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(m) The Company will not, and will use its best efforts to cause its
officers, directors and affiliates not to, (i) take, directly or indirectly
prior to termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares or (iii) pay or agree to pay
to any person any compensation for soliciting any order to purchase any other
securities of the Company.
(n) If at any time during the 30-day period after the Registration Statement
becomes effective, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your reasonable opinion the market
price of the Common Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus) and after written notice from you
advising the Company to the effect set forth above, the Company agrees to
consult
13
with you concerning the substance and dissemination of a press release or other
public statement responding to or commenting on such rumor, publication or
event.
(o) The Company will file timely and accurate reports on Form SR with the
Commission in accordance with Rule 463 of the 1933 Act Regulations or any
successor provision.
Section 4. Payment of Expenses. The Company will pay and bear all
costs, fees and expenses incident to the performance of its obligations under
this Agreement (excluding fees and expenses of counsel for the Underwriters,
except as specifically set forth below), including (a) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Preliminary Prospectuses, the
Prospectus and any Term Sheet and any amendments or supplements thereto, and the
cost of furnishing copies thereof to the Underwriters, (b) the preparation,
printing and distribution of this Agreement, the certificates representing the
Shares, the memoranda relating to compliance with state securities laws ("Blue
Sky Memoranda") and any instruments relating to any of the foregoing, (c) the
issuance and delivery of the Shares to the Underwriters, including any transfer
taxes payable upon the sale of the Shares to the Underwriters (other than
transfer taxes on resales by the Underwriters), (d) the fees and disbursements
of the Company's counsel and accountants, (e) the qualification of the Shares
under the applicable state securities laws in accordance with the terms of this
Agreement, including filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Memoranda, (f) all costs, fees and expenses in connection with the
notification to the Nasdaq Stock Market of the proposed issuance of the Shares,
(g) filing fees relating to the review of the offering by the NASD, (h) the
transfer agent's and registrar's fees and all miscellaneous expenses referred to
in Part II of the Registration Statement, (i) costs related to travel and
lodging incurred by the Company and its representatives relating to meetings
with and presentations to prospective purchasers of the Shares reasonably
determined by the Underwriters to be necessary or desirable to effect the sale
of the Shares to the public, and (j) all other costs and expenses incident to
the performance of the Company's obligations hereunder (including costs incurred
in closing the purchase of the Option Shares, if any) that are not otherwise
specifically provided for in this section. The Company, upon your request, will
provide funds in advance for filing fees in connection with "blue sky"
qualifications.
If the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 5 hereof
is not satisfied, because of any termination pursuant to Section 8 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of default by any of the Underwriters, the Company will reimburse the
Underwriters severally on demand for all reasonable out-of-pocket expenses,
including fees and disbursements of Underwriters' counsel, reasonably incurred
by the Underwriters in reviewing the Registration Statement and the Prospectus,
and in investigating and making preparations for the marketing of the Shares.
14
Section 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for (i) the Firm Shares that they have
respectively agreed to purchase pursuant to this Agreement (and any Option
Shares as to which the option granted in Section 2 has been exercised and the
Date of Delivery determined by you is the same as the Closing Time) at the
Closing Time and (ii) the Option Shares at the Date of Delivery of the Option
Shares, are subject to the accuracy of the representations and warranties of the
Company contained herein as of the Closing Time or the Date of Delivery, as the
case may be, and to the accuracy of the representations and warranties of the
Company contained in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date of this Agreement or, with your consent, at a later time
and date not later, however, than 5:30 p.m. on the first business day following
the date hereof, or at such later time or on such later date as you may agree to
in writing; if the Company has elected to rely upon Rule 462(b), the 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement or any 462(b)
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or,
to your knowledge or the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the satisfaction of counsel for the
Underwriters. If the Company has elected to rely upon Rule 430A, a Prospectus or
a Term Sheet containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a favorable opinion of
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., counsel for the
Company, dated as of the Closing Time, together with signed or reproduced copies
of such opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Louisiana with the
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus. The Company is qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions in which the
ownership or leasing of the Company's properties or the nature or conduct of its
business requires such qualification, except where the failure to do so would
not have
15
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(ii) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the state
of its incorporation. Each such entity has all requisite corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus. Each such entity is
duly qualified to do business and is in good standing as a foreign corporation
in each other jurisdiction in which the ownership or leasing of its properties
or the nature or conduct of its business requires such qualification, except
where the failure to do so would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(iii) The Company has the corporate power and authority to
enter into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This Agreement
has been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Underwriters, constitutes a
valid and binding agreement of the Company, enforceable in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws affecting creditors' rights
or by general principles of equity whether considered at law or in equity,
except to the extent that enforcement of the indemnification provisions set
forth in Section 6 of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws and except that no
opinion need by expressed as to the effect of the first sentence of Section 13
of this Agreement as to the laws of the State of Tennessee.
(iv) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby, has been made or obtained and is in full force and effect, except such
as may be necessary under state securities laws or required by the NASD in
16
connection with the purchase and distribution of the Shares by the Underwriters,
as to which such counsel need express no opinion.
(v) Neither the issuance, sale and delivery by the Company of the
Shares, nor the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby will conflict with or
result in a breach or violation of any of the terms and provisions of, or (with
or without the giving notice or the passage of time or both) constitute a
default under, the charter or by-laws of the Company or the Subsidiaries,
respectively, or, to such counsel's knowledge after due inquiry, under any
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or the Subsidiaries, respectively,
is a party or to which the Company or the Subsidiaries, respectively, any of
their respective properties or other assets, is subject; or, to such counsel's
knowledge, any applicable statute, judgment, decree, order, rule or regulation
of any court or governmental agency or body; or to such counsel's knowledge,
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or the Subsidiaries, respectively.
(vi) The Common Stock conforms in all material respects as to legal
matters to the description thereof contained in the Registration Statement and
the Prospectus under the heading "Description of Capital Stock."
(vii) The Shares to be issued and sold to the Underwriters hereunder
have been validly authorized by the Company. When issued and delivered against
payment therefor as provided in this Agreement, such shares will be validly
issued, fully paid and nonassessable. To such counsel's knowledge, no preemptive
rights of shareholders exist with respect to any of the Shares which have not
been satisfied or waived. To such counsel's knowledge, no person or entity holds
a right to require or participate in the registration under the 1933 Act of the
Shares pursuant to the Registration Statement which has not been satisfied or
waived and, except as set forth in the Prospectus, no person holds a right to
require registration under the 1933 Act of any shares of Common Stock of the
Company at any other time which has not been satisfied or waived. The form of
certificates evidencing the Shares complies with all applicable requirements of
Louisiana law.
(viii) The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization." All of the issued
17
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable. None of the issued shares of capital
stock of the Company has been issued or is owned or held in violation of any
preemptive rights of shareholders.
(ix) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, to such counsel's knowledge after due inquiry, are owned
directly, or indirectly through another Subsidiary, by the Company free and
clear of all liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any nature
whatsoever except security interests disclosed in the Prospectus. To such
counsel's knowledge after due inquiry, other than the Subsidiaries, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association.
(x) Except as disclosed in the Prospectus, to such counsel's knowledge
after due inquiry, there are no outstanding (i) securities or obligations of the
Company or any of its Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options.
(xi) Neither the Company nor its Subsidiaries is in violation of their
respective charter or by-laws, and, to such counsel's knowledge after due
inquiry, no material default exists, and no event has occurred nor state of
facts exist which, with notice or after the lapse of time to cure or both, would
constitute a material default in the due performance and observance of any
obligation, agreement, term, covenant, or condition contained in any indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which any such entity is a party or to which any such entity or
any of its properties is subject.
(xii) To such counsel's knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation against the
18
Company, the Subsidiaries or any of their respective officers and directors or
to which the properties, assets or rights of any such entity are subject, before
or brought by any court or governmental agency or body or board of arbitrators,
that is required to be described in the Registration Statement or the Prospectus
but is not described as required.
(xiii) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein described
present fairly the information required to be shown and there are no contracts,
leases or other documents known to such counsel of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or filed as
required.
(xiv) The Common Stock has been approved for trading on the
Nasdaq Stock Market.
(xv) The Registration Statement and any 462(b) Registration Statement
have become effective under the 1933 Act and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement or any
462(b) Registration Statement has been issued and no proceeding for that purpose
has been instituted or is pending or contemplated under the 1933 Act. Other than
financial statements and other financial and operating data and schedules
contained therein, as to which counsel need express no opinion, the Registration
Statement, any 462(b) Registration Statement, all Preliminary Prospectuses, the
Prospectus and any amendment or supplement thereto, appear on their face to
conform as to form in all material respects with the requirements of the 1933
Act and the rules and regulations thereunder.
(xvi) The Company is not, or solely as a result of the consummation of
the transactions contemplated hereby will not become, an "investment company,"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(xvii) The descriptions in the Prospectus of statutes, regulations,
legal or governmental proceedings are accurate and present fairly a summary of
the information required to be shown under the 1933 Act and the 1933 Act
Regulations. The information in the Prospectus under the caption "Shares
Available for Future Sale" to the extent that it
19
constitutes matters of law or legal conclusions, has been reviewed by such
counsel, is correct and presents fairly the information required to be disclosed
therein under the 1933 Act and the 1933 Act Regulations.
Such counsel also shall state that they have no reason to believe that the
Registration Statement, any 462(b) Registration Statement or any further
amendment thereto made prior to the Closing Time or the Date of Delivery, as the
case may be, on its effective date and as of the Closing Time or the Date of
Delivery, as the case may be, contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, or any amendment or supplement thereto made prior to the
Closing Time or the Date of Delivery, as the case may be, as of its issue date
and as of the Closing Time or the Date of Delivery, as the case may be,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that such counsel need express no belief regarding the
financial statements and related schedules and other financial data contained in
the Registration Statement, any 462(b) Registration Statement, any amendment
thereto, or the Prospectus, or any amendment or supplement thereto).
In rendering the opinions set forth in Section 5(b), such counsel may rely
on the following:
(A) as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in such opinion,
upon an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel familiar with the applicable laws, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and certificates or other
written statements of officers or departments of various jurisdictions having
custody of documents respecting the existence or good standing of the Company,
provided that copies of all such opinions, statements or certificates shall be
delivered to Underwriters' counsel. The opinion of counsel for the Company shall
state that the opinion of any other counsel, or certificate or written
statement, on which such counsel is relying is in form satisfactory to such
counsel and their belief that you and they are justified in relying thereon.
20
(c) At the Closing Time, you shall have received a favorable opinion
from Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated as of the
Closing Time, with respect to the incorporation of the Company, the issuance and
sale of the Shares, the Registration Statement, the Prospectus and other related
matters as the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass on such matters.
(d) At the Closing Time, (i) the Registration Statement, any 462(b)
Registration Statement, and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations; the Company shall have complied in all material respects with Rule
430A (if it shall have elected to rely thereon) and neither the Registration
Statement, any 462(b) Registration Statement, nor the Prospectus, as they may
then be amended or supplemented, shall contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) there shall not have been,
since the respective dates as of which information is given in the Registration
Statement, any material adverse change in the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business, (iii) no
action, suit or proceeding at law or in equity shall be pending or, to the best
of Company's knowledge, threatened against the Company that would be required to
be set forth in the Prospectus other than as set forth therein and no
proceedings shall be pending or, to the best knowledge of the Company,
threatened against the Company before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding could materially adversely affect the business, prospects,
assets, results of operations or condition (financial or otherwise) of the
Company, other than as set forth in the Prospectus, (iv) the Company shall have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied pursuant to this Agreement at or prior to the Closing
Time, and (v) the representations and warranties of the Company set forth in
Section 1 shall be accurate as though expressly made at and as of the Closing
Time. At the Closing Time, you shall have received a certificate executed by the
President and Chief Financial Officer of the Company dated as of the Closing
Time, to such effect and with respect to the following additional matters: (A)
the Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of the Prospectus has been issued, and no proceedings for
that purpose have been instituted or are pending or, to the best of their
knowledge, threatened under the 1933 Act; and (B) they have reviewed the
Registration Statement and the Prospectus and, when the Registration Statement
and any 462(b) Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the Registration
Statement, any 462(b) Registration Statement and the Prospectus and any
amendments or supplements thereto contained all statements and information
required to be included therein or necessary to make the statements therein not
misleading and neither the Registration Statement, any 462(b)
21
Registration Statement, nor the Prospectus nor any amendment or supplement
thereto included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an amended or
supplemented Prospectus that has not been so set forth.
(e) You shall have received from Price Waterhouse LLP letters dated,
respectively, the date hereof (or, if the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement, dated
such effective date and the date of this Agreement) and the Closing Time and the
Date of Delivery, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto. In the event that the letters referred to in this
subsection set forth any changes, decreases or increases in the items specified
in paragraph (iii) of Annex I, it shall be a further condition to the
obligations of the Underwriters that (i) such letters shall be accompanied by a
written explanation by the Company as to the significance thereof, unless the
Underwriters deem such explanation unnecessary, and (ii) such changes, decreases
or increases do not, in your sole judgment, make it impracticable or inadvisable
to proceed with the purchase, sale and delivery of the Shares as contemplated by
the Registration Statement, as amended as of the date of such letter.
(f) At the Closing Time, you shall have received from Price Waterhouse
LLP a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) above, except that the specified date
referred to shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may request
for the purpose of enabling them to pass upon the issuance and sale of the
Shares as contemplated in this Agreement and the matters referred to in Section
5(c) and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the performance of any
of the covenants of the Company, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company at or prior to the
Closing Time in connection with the authorization, issuance and sale of the
Shares as contemplated in this Agreement shall be reasonably satisfactory in
form and substance to you and to counsel for the Underwriters. The Company will
furnish you with such number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
(h) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
22
(i) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions the effect on the financial markets of the
United States is such as to make it, in your judgment, impracticable to market
the Shares or enforce contracts for the sale of the Shares, or (ii) trading in
any securities of the Company has been suspended by the Commission or by the
Nasdaq Stock Market, or if trading generally on the New York Stock Exchange or
in the over-the-counter market has been suspended, or limitations on prices for
trading (other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or the NASD or by order of the Commission or any other
governmental authority, or (iii) there has been any downgrading in the rating of
any of the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act), or (iv) a banking moratorium has been declared by
federal or New York or Tennessee authorities, or (v) any federal or state
statute, regulation, rule or order of any court or other governmental authority
has been enacted, published, decreed or otherwise promulgated which in your
reasonable opinion materially adversely affects or will materially adversely
affect the business or operations of the Company, or (vi) any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States.
(j) Prior to the date of the execution of this Agreement, the Company
shall have furnished to the Representatives a letter substantially in the form
of Exhibit A hereto from each officer and director of the Company and from each
person who beneficially owns five percent or more of the Company's outstanding
Common Stock, addressed to the Representatives, in which each such person agrees
not to offer, pledge, sell, contract to sell, grant any option for the sale of,
or otherwise dispose of, or announce any offer, pledge, sale, grant of any
option to purchase or other disposition of, directly or indirectly, any shares
of Common Stock beneficially owned by such person or any securities convertible
into, exercisable for or exchangeable for shares of Common Stock for a period of
180 days after the date of the Prospectus without the prior written consent of
Xxxxxx Xxxxxx & Company, Inc.; provided, however, that the foregoing
restrictions shall not apply to any gift of Common Stock to a donee who agrees
in writing for the benefit of the Underwriters to be bound by the foregoing
restrictions with respect to such shares of Common Stock.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Section 6 shall remain in effect.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery for
Option Shares of the conditions set forth in
23
this Section 5, except that, if any Date of Delivery for Option Shares is other
than the Closing Time, the certificates, opinions and letters referred to in
paragraphs (b), (c) and (d) shall be revised to reflect the sale of Option
Shares.
Section 6. Indemnification and Contribution.
(a) The Company and each of Xxxxx X. Xxxxxxx and Xxxx X. Xxxxxx
(individually, a "Shareholder" and collectively, the "Shareholders"), jointly
and severally, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject under the 1933 Act, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the Registration
Statement, any 462(b) Registration Statement or the Prospectus, or any amendment
or supplement thereto, or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each an "Application"), or (ii) arise out of or are based upon the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement, any 462(b) Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that (i) neither the
Company nor the Shareholders shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, any 462(b)
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter expressly for use therein, (ii) no Shareholder will
be liable to the Underwriters for an amount in excess of $12.6 million and (iii)
no claim may be made by an indemnitee under this Section 6 against the
Shareholders in respect of their indemnification obligations under this Section
6 unless and until a claim by such indemnitee for any such losses, claims,
damages or liabilities has been brought against the Company and pursued for a
period of 90 days without the result of such indemnitee having received
reimbursement for all of its losses, damages and liabilities relating to, and
released unconditionally from, any claims against such indemnitee that are the
subject of such indemnitee's claim against the Company and/or the Shareholders
pursuant to this Section 6. The Company will also indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint and
several, to which such Underwriter may become subject insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any breach of any warranty or covenant of the Company contained
herein. In addition to its other obligations under this
24
Section 6(a), the Company and the Shareholders agree that, as an interim measure
during the pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 6(a), they will
reimburse the Underwriters on a monthly basis for all reasonable legal and other
expenses incurred by the Underwriters in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligations of the Company and the Shareholders to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction; provided, however, that the obligation of the Company to make any
such reimbursements shall be subject to receipt from the Underwriters of an
undertaking to return any such reimbursements to the extent that is determined
by a court of competent jurisdiction or an arbitrator appointed in accordance
with Section 6(d) that such indemnification of the Underwriters by the Company
is not permitted. Any such interim reimbursement payments that are not made to
an Underwriter within 30 days of a request for reimbursement shall bear interest
at the prime rate (or reference rate or other commercial lending rate for
borrowers of the highest credit standing) published from time to time by The
Wall Street Journal (the "Prime Rate") from the date of such request. This
indemnity agreement shall be in addition to any liabilities that the Company
and the Shareholders may otherwise have. Neither the Company nor the
Shareholders will, without the prior written consent of each Underwriter,
settle or compromise or consent to the entry of any judgment in any pending or
threatened action or claim or related cause of action or portion of such cause
of action in respect of which indemnification may be sought hereunder (whether
or not such Underwriter is a party to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter from all liability arising out of such action or claim (or related
cause of action or portion thereof).
The indemnity agreement in this Section 6(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter within the meaning of the 1933 Act to the same
extent as such agreement applies to the Underwriters.
(b) Each Underwriter, severally but not jointly, will indemnify and
hold harmless the Company and the Shareholders against any losses, claims,
damages or liabilities to which the Company may become subject, under the 1933
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any breach of any
warranty or covenant by such Underwriter herein contained or any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was
25
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Underwriter expressly
for use therein; and will reimburse the Company and the Shareholders for any
legal or other expenses reasonably incurred by the Company or the Shareholders
in connection with investigating or defending any such loss, claim, damage,
liability or action. In addition to its other obligations under this Section
6(b), the Underwriters agree that, as an interim measure during the pendency of
any such claim, action, investigation, inquiry or other proceeding arising out
of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(b), they will reimburse the Company on a
monthly basis for all reasonable legal and other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of their obligation to reimburse the Company
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement shall be in addition to any liabilities
that the Underwriters may otherwise have. No Underwriter will, without the prior
written consent of the Company and the Shareholders, settle or compromise or
consent to the entry of judgment in any pending or threatened action or claim or
related cause of action or portion of such cause of action in respect of which
indemnification may be sought hereunder (whether or not the Company or the
Shareholders are parties to such action or claim), unless such settlement,
compromise or consent includes an unconditional release of the Company and the
Shareholders from all liability arising out of such action or claim (or related
cause of action or portion thereof).
The indemnity agreement in this Section 6(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer
and director of the Company and each person, if any, who controls the Company
within the meaning of the 1933 Act to the same extent as such agreement applies
to the Company.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; no indemnification provided for in
subsection (a) or (b) shall be available to any party who shall fail to give
notice as provided in this subsection (c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but the omission so to notify
the indemnifying party will not relieve the indemnifying party from any
liability that it may have to any indemnified party otherwise than under Section
6. In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other
26
indemnifying party similarly notified, to assume the defense thereof with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party (which consent shall not be unreasonably
withheld), be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, except that if the indemnified party has
been advised by counsel in writing that there are one or more defenses available
to the indemnified party which are different from or additional to those
available to the indemnifying party, then the indemnified party shall have the
right to employ separate counsel and in that event the reasonable fees and
expenses of such separate counsel for the indemnified party shall be paid by the
indemnifying party; provided, however, that if the indemnifying party is the
Company, the Company shall only be obligated to pay the reasonable fees and
expenses of a single law firm (and any reasonably necessary local counsel)
employed by all of the indemnified parties. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Section 6(a) and (b) hereof,
including the amounts of any requested reimbursement payments, the method of
determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the National
Association of Securities Dealers, Inc. Any such arbitration must be commenced
by service of a written demand for arbitration or a written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 6(a) and (b) hereof
and will not resolve the ultimate propriety or enforceability of the obligation
to indemnify for expenses that is created by the provisions of Sections 6(a) and
(b).
(e) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 6 is for
any reason judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the right of appeal) to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Shareholders, on the one hand, and the Underwriters, on the other hand, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity incurred by the Company and the
Shareholders, and one or more of the Underwriters, as incurred, in such
proportions that (a) the Underwriters are responsible pro rata for that portion
27
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the public offering price (before
deducting expenses) appearing thereon, and (b) the Company and the Shareholders
are responsible for the balance, provided, however, that no person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation; provided, further, that if the allocation
provided above is not permitted by applicable law, the Company and the
Shareholders, on the one hand, and the Underwriters, on the other hand, shall
contribute to the aggregate losses in such proportion as is appropriate to
reflect not only the relative benefits referred to above but also the relative
fault of the Company and the Shareholders, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Shareholders, on the one hand, or by
the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Shareholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(e) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 6(e). The amount paid or payable by a party as a
result of the losses, claims, damages or liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending such action or claim.
Notwithstanding the provisions of this Section 6(e), (i) no Shareholder shall be
required to contribute any amount in excess of the aggregate amount of cash
distributions received by such Shareholder from the Company from and after
January 1, 1997 through and including the Closing Time and (ii) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this Section 6(e) to contribute are several in proportion to
their respective underwriting obligations and not joint. For purposes of this
Section 6(e), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company, within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
Section 7. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other statements of
the Company or its officers set forth in or made pursuant to this Agreement will
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Company, or any Underwriter or
28
controlling person, and with respect to an Underwriter or the Company will
survive delivery of and payment for the Shares or termination of this Agreement.
Section 8. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to Sections 4
and 6 and, as to all other provisions, (i) if at the time of execution of this
Agreement the Registration Statement has not become effective, at 10:00 a.m. on
the first full business day following the effectiveness of the Registration
Statement, or (ii) if at the time of execution of this Agreement the
Registration Statement has been declared effective, at 10:00 a.m. on the first
full business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Shares for sale to the public. For
the purposes of this Section 8, the Shares shall be deemed to have been so
released upon the release of publication of any newspaper advertisement relating
to the Shares or upon the release by you of telegrams (i) advising the
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first. By giving
notice before the time this Agreement becomes effective, you, as representative
of the several Underwriters, or the Company, may prevent this Agreement from
becoming effective, without liability of any party to any other party, except
that the Company shall remain obligated to pay costs and expenses to the extent
provided in Section 4 hereof and except that the provisions of Section 6 shall
remain in effect.
(b) You may terminate this Agreement, by notice to the Company, at any
time at or prior to the Closing Time (i) in accordance with the penultimate
paragraph of Section 5 of this Agreement, or (ii) if there has been since the
respective dates as of which information is given in the Registration Statement,
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, prospects, management, properties,
assets, results of operations or condition (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business, or (iii) if
there has occurred or accelerated any outbreak of hostilities or other national
or international calamity or crisis or change in economic or political
conditions the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable to market the Shares or
enforce contracts for the sale of the Shares, or (iv) if trading in any
securities of the Company has been suspended by the Commission or by the Nasdaq
Stock Market or if trading generally on the New York Stock Exchange or in the
over-the-counter market has been suspended, or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or by order of the Commission or any other governmental authority,
or (v) if there has been any downgrading in the rating of any of the Company's
debt securities or preferred stock by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the 1933
Act), or (vi) if a banking moratorium has been declared by federal or New York
or Tennessee authorities, or (vii) any
29
federal or state statute, regulation, rule or order of any court or other
governmental authority has been enacted, published, decreed or otherwise
promulgated which in your reasonable opinion materially adversely affects or
will materially adversely affect the business or operations of the Company, or
(viii) any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the United
States.
(c) If this Agreement is terminated pursuant to this Section 8, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Section 6 shall remain in effect.
Section 9. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time to purchase the Shares that it or
they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 36 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 36-hour period, then:
(a) If the aggregate number of Firm Shares which are Defaulted
Securities does not exceed 10% of the aggregate number of Firm Shares to be
purchased pursuant to this Agreement, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligation proportions bear to the underwriting
obligations of all non-defaulting Underwriters, and
(b) If the aggregate number of Firm Shares which are Defaulted
Securities exceeds 10% of the aggregate number of Firm Shares to be purchased
pursuant to this Agreement, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus that
may thereby be made necessary. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
30
Section 10. Default by the Company. If the Company shall fail at the Closing
Time to sell and deliver the aggregate number of Firm Shares that it is
obligated to sell, then this Agreement shall terminate without any liability on
the part of any non-defaulting party, except to the extent provided in Section 4
and except that the provisions of Section 6 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect to such default.
Section 11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Xxxxxx Xxxxxx & Company, Inc.,
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx Xxxxxx (with a copy
sent in the same manner to Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxx); notices to the Company shall
be directed to it at 000 Xxxxxxxx Xxxx, Xxxxx, Xxxxxxxxx 00000, Attention: Xxxxx
X. Xxxxxxx (with a copy of each notice to the Company or to any Shareholder sent
in the same manner to Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx,
L.L.P., 000 Xx. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx X.
Xxxxxxxx); notices to Xxxxx X. Xxxxxxx shall be directed to him at 000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000; and notices to Xxxx X. Xxxxxx shall be
directed to him at Xxxx Xxxxxx Interests, 0000 X. Xxxxxxxx Xxxxxx Xxxx., Xxxxx
000, Xxxxx Xxxxx, Xxxxxxxxx 00000.
Section 12. Parties. This Agreement is made solely for the benefit of and is
binding upon the Underwriters, the Shareholders and the Company and, to the
extent provided in Section 6, any person controlling the Company or any of the
Underwriters, the officers and directors of the Company, and their respective
executors, administrators, successors and assigns. Subject to the provisions of
Section 6, no other person shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include any
purchaser, as such purchaser, from any of the several Underwriters of the
Shares.
All of the obligations of the Underwriters hereunder are several and not
joint.
Section 13. Governing Law and Time. This Agreement shall be governed by the
laws of the State of Tennessee. Specified time of the day refers to United
States Eastern Time. Time shall be of the essence of this Agreement.
Section 14. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by Xxxxxx Xxxxxx & Company, Inc., on behalf of each of the Underwriters,
this instrument will become a binding agreement among the Company and the
several Underwriters in accordance with its terms. It is understood that your
31
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in the Master Agreement among Underwriters, a copy of
which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
GULF ISLAND FABRICATION, INC.
By:________________________________
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
The undersigned, Xxxxx X. Xxxxxxx and Xxxx
X. Xxxxxx, do hereby join in this
Underwriting Agreement solely for purposes
of their agreements set forth in Section 6
hereof.
_____________________________________
Xxxxx X. Xxxxxxx
_____________________________________
Xxxx X. Xxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above:
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX RICE & COMPANY L.L.C.
By: Xxxxxx Xxxxxx & Company, Inc.
By:_________________________________
(Authorized Representative)
On behalf of each of the Underwriters
32
SCHEDULE A
Number of
Firm Shares
to be Purchased
---------------
Underwriter
-----------
Xxxxxx Xxxxxx & Company, Inc. ..........................
Xxxxxxx Xxxxx & Associates, Inc. .......................
Xxxxxxx Rice & Company L.L.C. ..........................
---------
TOTAL................................................... 2,000,000
=========
ANNEX I
Pursuant to Section 5(e) of the Underwriting Agreement, Price Waterhouse LLP
shall furnish letters to the Underwriters to the effect that:
(i) They are independent public accountants with respect to the
Company and its consolidated subsidiaries and with respect to Dolphin Services
within the meaning the 1933 Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus, the Registration
Statement and any 462(b) Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the related published rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus, a reading of the latest available
interim financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material respects with
the applicable accounting requirements of the 1933 Act and the related published
rules and regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior to the date
of such letter, there were any changes in the capital stock (other than the
issuance of capital stock upon exercise of options which were outstanding on the
date of the latest balance sheet included in the Prospectus) or any increase in
inventories or the long-term debt or short-term debt of the Company and its
subsidiaries, or any decreases in net current assets or net assets or other
items specified by the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with amounts shown in the latest
balance sheet included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to in
Clause (B) there were any decreases in net sales or operating income or the
total or per share amounts of net income or other items specified by the
Underwriters, or any increases in any items specified by the Underwriters, in
each case as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the Underwriters, except
in each case for increases or decreases which the Prospectus discloses have
occurred or may occur which are described in such letter; and
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Underwriters
which are derived from the general accounting records of the Company and its
subsidiaries, included in the Registration Statement and the Prospectus, or
which appear in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Underwriters, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in agreement.
(v) On the basis of a reading of the unaudited pro forma consolidated
condensed financial statements included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would not necessarily
reveal matters of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma consolidated
condensed financial statements, nothing came to their attention that caused them
to believe that the unaudited pro forma consolidated condensed financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such statements.
References to the Registration Statement and the Prospectus in this
Annex I shall include any amendment or supplement thereto at the date of such
letter.
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