1
EXHIBIT 1.1
================================================================================
THE XXXX GROUP INC.
(a Louisiana corporation)
2,500,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: , 1999
================================================================================
2
TABLE OF CONTENTS
SECTION 1. Representations and Warranties .......................................3
(a) Representations and Warranties by the Company ........................3
(i) Compliance with Registration Requirements ...................3
(ii) Incorporated Documents ......................................4
(iii) Independent Accountants .....................................4
(iv) Financial Statements ........................................4
(v) No Material Adverse Change in Business ......................4
(vi) Good Standing of the Company ................................5
(vii) Good Standing of Subsidiaries ...............................5
(viii) Capitalization ..............................................5
(ix) Authorization of Agreement ..................................5
(x) Authorization and Description of Securities .................5
(xi) Absence of Defaults and Conflicts ...........................6
(xii) Absence of Labor Dispute ....................................6
(xiii) Absence of Proceedings ......................................6
(xiv) Accuracy of Exhibits ........................................7
(xv) Possession of Intellectual Property .........................7
(xvi) Absence of Further Requirements .............................7
(xvii) Possession of Licenses and Permits ..........................7
(xviii) Title to Property ...........................................8
(xix) Compliance with Cuba Act ....................................8
(xx) Investment Company Act ......................................8
(xxi) Environmental Laws ..........................................8
(b) Officer's Certificates ...............................................9
SECTION 2. Sale and Delivery to Underwriters; Closing ...........................9
(a) Initial Securities ...................................................9
(b) Option Securities ....................................................9
(c) Payment .............................................................10
(d) Denominations; Registration .........................................10
SECTION 3. Covenants of the Company ............................................10
(a) Compliance with Securities Regulations and Commission Requests ......10
(b) Filing of Amendments ................................................11
(c) Delivery of Registration Statements .................................11
(d) Delivery of Prospectuses ............................................11
(e) Continued Compliance with Securities Laws ...........................12
(f) Blue Sky Qualifications .............................................12
(g) Rule 158 ............................................................12
(h) Use of Proceeds .....................................................12
(i) Listing .............................................................12
(j) Restriction on Sale of Securities ...................................13
(k) Reporting Requirements ..............................................13
-i-
3
SECTION 4. Payment of Expenses .................................................13
(a) Expenses ............................................................13
(b) Termination of Agreement ............................................14
SECTION 5. Conditions of Underwriters' Obligations .............................14
(a) Effectiveness of Registration Statement .............................14
(b) Opinion of Counsel for Company ......................................14
(c) Opinion of Counsel for Underwriters .................................14
(d) Officers' Certificate ...............................................15
(e) Accountant's Comfort Letter .........................................15
(f) Bring-down Comfort Letter ...........................................15
(g) Approval of Listing .................................................15
(h) No Objection ........................................................15
(i) Lock-up Agreements ..................................................15
(j) Conditions to Purchase of Option Securities .........................15
(i) Officers' Certificate ......................................15
(ii) Opinion of Counsel for Company .............................16
(iii) Opinion of Counsel for Underwriters ........................16
(iv) Bring-down Comfort Letter ..................................16
(k) Additional Documents ................................................16
(l) Termination of Agreement ............................................16
SECTION 6. Indemnification .....................................................16
(a) Indemnification of Underwriters .....................................16
(b) Indemnification of Company, Directors and Officers ..................17
(c) Actions against Parties; Notification ...............................18
(d) Settlement without Consent if Failure to Reimburse ..................18
SECTION 7. Contribution ........................................................19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery ......20
SECTION 9. Termination of Agreement ............................................20
(a) Termination; General ................................................20
(b) Liabilities .........................................................20
SECTION 10. Default by One or More of the Underwriters ..........................21
SECTION 11. Default by the Company ..............................................21
SECTION 12. Notices .............................................................22
SECTION 13. Parties .............................................................22
SECTION 14. GOVERNING LAW AND TIME ..............................................22
SECTION 15. Effect of Headings ..................................................22
SCHEDULES
Schedule A - List of Underwriters Sch A-1
Schedule B - Pricing Information Sch B-1
Schedule C - List of Subsidiaries Sch C-1
Schedule D - List of Persons and Entities Subject to Lock-up Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Xxxxxx & Xxxxxx, L.L.P. A-1
Exhibit B - Form of Opinion of Kantrow, Spaht, Xxxxxx
and Blitzer, a professional corporation B-1
Exhibit C - Form of Lock-up Letter C-1
ii
4
DRAFT OF OCTOBER 11, 1999
THE XXXX GROUP INC.
(A Louisiana corporation)
2,500,000 Shares of Common Stock
(No Par Value Per Share)
PURCHASE AGREEMENT
November , 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxx & Company, Inc.
RBC Dominion Securities Corporation
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The Xxxx Group Inc., a Louisiana corporation (the "Company"), confirms
its agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx is acting as representative (in such capacity,
the "Representative"), with respect to (i) the sale by the Company, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, no par value per share, of the
Company ("Common Stock") set forth in Schedule A hereto and (ii) the grant by
the Company to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 375,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 2,500,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 375,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities".
1
5
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333- ) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus"
shall refer to the preliminary prospectus dated ________, 1999 together with
the Term Sheet and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any
2
6
document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The
Company represents and warrants to each Underwriter as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically
3
7
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus
was issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows
of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Louisiana
4
8
and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none
of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the
Company are (a) the subsidiaries listed on Schedule C hereto and (b)
certain other subsidiaries which, considered in the aggregate as a
single Subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus). The shares of issued and
outstanding capital stock, have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock, was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the
Company
5
9
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectus and such description conforms to
the rights set forth in the instruments defining the same; no holder
of the Securities will be subject to personal liability by reason of
being such a holder; and the issuance of the Securities is not subject
to the preemptive or other similar rights of any securityholder of the
Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in
the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Prospectus under the caption "Use of Proceeds")
and compliance by the Company with its obligations hereunder have been
duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements
and Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or
6
10
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary, which is required
to be disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement or
the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described
in the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(xvii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Governmental
7
11
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither
the Company nor any subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company
or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xvix) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes,
8
12
toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the Initial
Securities, set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities, subject, in each case, to such
adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. 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, severally and not jointly, to purchase up to an additional
375,000 shares of Common Stock, as set forth in Schedule A, at the price per
share set forth in Schedule B. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not
9
13
jointly, will purchase that proportion of the total number of Option Securities
then being purchased which the number of Initial Securities set forth in
Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial Securities shall be made at the offices of
Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the Representatives may request
in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as
10
14
applicable, and will notify the Representatives immediately, and confirm the
notice in writing, when any post-effective amendment to the Registration
Statement shall 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 for any amendment
to the Registration Statement or any amendment or supplement to 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 of
any order preventing or suspending the use of any preliminary prospectus, or of
the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be
11
15
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement and in the Prospectus. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; 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 or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any
Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
12
16
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the prior
written consent of Xxxxxxx Xxxxx, directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus or (D) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of their obligations under this Agreement,
including the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon
the sale, issuance or delivery of the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
13
17
Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is
terminated by the Representatives in accordance with the provisions of Section
5, Section 9(a)(i) or Section 11 hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
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) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance with
Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of each of Xxxxxx & Xxxxxx, LLP and Kantrow, Spaht, Xxxxxx and Blitzer, a
professional corporation, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letters for each of the other Underwriters to the
effect set forth in Exhibits A and B hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time,
the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (i), (ii), (iii)
and (iv) (solely as to the information in the Prospectus under "Description of
Capital Stock--Common Stock") and the penultimate paragraph of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
14
18
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that there has been no
such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Representatives shall have received from Xxxxxx Xxxxxxxx
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as
of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit D hereto signed by the persons listed on Schedule D hereto.
(j) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company, any subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting
15
19
officer of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(e) hereof remains true and
correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
each of Xxxxxx & Xxxxxx LLP and Kantrow, Spaht, Xxxxxx and Blitzer, a
professional corporation, counsel for the Company, each in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Xxxxxx
Xxxxxxxx, LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(g) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(i), (ii) and (iii) below as follows:
16
20
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission made
in any preliminary prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss,
liability claim, damage or expense purchased shares from such Underwriter but
was not sent or given a copy of the Prospectus (as amended or supplemented) at
or prior to the written confirmation of the sale of such shares to such person
in any case where the delivery of Prospectus (as amended or supplemented) is
required by the Act, and where the Company has delivered the Prospectus to the
several Underwriters in requisite quantity and on a timely basis to permit such
delivery.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the
17
21
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Xxxxxxx Xxxxx expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse. If
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
18
22
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 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 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities 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 any such untrue or
alleged untrue statement or omission or alleged omission.
19
23
No person guilty of fraudulent misrepresentation (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.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 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 or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company, as the case may be.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section
20
24
4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 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 herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either (i) the Representatives or (ii)
the Company and any Selling Shareholder shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, 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.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at
Closing Time or at the Date of Delivery to sell the number of Securities that
it is obligated to sell hereunder, then this Agreement shall terminate without
any liability on the part of any nondefaulting party; provided, however, that
the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect. No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
21
25
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Xxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of ;
notices to the Company shall be directed to it at , attention
of .
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
22
26
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the Attorney-in-Fact
for the Selling Shareholders a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters and the Company in accordance with its terms.
Very truly yours,
THE XXXX GROUP INC.
By
-------------------------------
Title:
----------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX & COMPANY, INC.
XXXXXX XXXXXX & COMPANY, INC.
RBC DOMINION SECURITIES CORPORATION
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
----------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
23
27
SCHEDULE A
Number of Number of
Name of Underwriter Initial Securities Option Securities
------------------- ------------------ -----------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ........................
Xxxxxxxxx & Company, Inc. ........................
Xxxxxx Xxxxxx & Company, Inc. ....................
RBC Dominion Securities Corporation ..............
--------- -------
Total ............................................ 2,500,000 375,000
========= =======
Sch A-1
28
SCHEDULE B
THE XXXX GROUP, INC.
2,500,000 Shares of Common Stock
(No Par Value Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per share; provided that
the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not payable on the
Option Securities.
Sch B-1
29
SCHEDULE C
List of Subsidiaries
X.X. Xxxx, Inc.
Xxxx Sunland Fabricators, Inc.
Xxxx Word Industries Fabricators, Inc.
Xxxx Process Fabricators, Inc.
Xxxx Naptech, Inc.
Xxxx Fronely Engineering and Consulting, Inc.
Xxxx Alloy Piping Products, Inc.
Xxxx Constructors, Inc.
Manufacturas Xxxx South America, C.A.
Xxxx Lancas, C.A.
Xxxx Group U.K. Ltd.
Cojafex B.V.
Sch C-1
30
SCHEDULE D
List of persons and entities
subject to lock-up
[To Come]
Sch D-1
31
Exhibit A
FORM OF OPINION OF XXXXXX & XXXXXX, L.L.P.
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(ii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus, excluding the documents incorporated by
reference therein, and each amendment or supplement to the Registration
Statement and Prospectus, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(iii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws of
the Company and the requirements of the New York Stock Exchange.
(iv) The information in the Prospectus under "Description of
Capital Stock--Common Stock", "Description of Capital Stock--Preferred Stock"
and in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(v) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
(vi) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its subsidiaries are a
party are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated
A-1
32
by reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(vii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Purchase Agreement or for
the offering, issuance, sale or delivery of the Securities.
(viii) The Company is not an "investment company" as such
terms are defined in the 1940 Act.
(ix) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and
will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event
(as defined in Section 1(a)(xi) of the Purchase Agreement) under or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended August 31, 1999 (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their respective properties, assets or operations.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a 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
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we need make no statement), at the time the Prospectus was issued, at the time
any such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
A-2
33
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-3
34
Exhibit B
FORM OF OPINION OF KANTROW, SPAHT, XXXXXX
AND BLITZER, A PROFESSIONAL CORPORATION
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(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.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material
Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to the Purchase
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to
the exercise of convertible securities or options referred to
in the Prospectus); the shares of issued and outstanding
capital stock of the Company, including the Securities to be
purchased by the Underwriters from the Selling Shareholders,
have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder
of the Company.
(v) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when
issued and delivered by the Company pursuant to the Purchase
Agreement against payment of the consideration set forth in
the Purchase Agreement, will be validly issued and fully paid
and
B-1
35
non-assessable and no holder of the Securities is or will be
subject to personal liability by reason of being such a
holder.
(vii) The issuance and sale of the Securities by the Company and
the sale of the Securities by the Selling Shareholders is not
subject to the preemptive or other similar rights of any
securityholder of the Company.
(viii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge, is owned by
the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares
of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of
such Subsidiary. To the best of our knowledge, the Company
does not have any subsidiaries.
(ix) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need
express no opinion), when they were filed with the Commission
complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of
the Commission thereunder.
(x) All descriptions in the Registration Statement of contracts
and other documents to which the Company or its subsidiaries
are a party are accurate in all material respects; to the
best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all
material respects.
(xi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
B-2
36
subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company of its
obligations thereunder.
(xii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in
the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration
Statement.
(xiii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and in the
Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the
caption "Use Of Proceeds") and compliance by the Company with
its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xi) of
the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant
to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any
subsidiary is a party or by which it or any of them may be
bound, or to which any of the property or assets of the
Company or any subsidiary is subject (except for such
conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any
subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or
operations.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data
B-3
37
included or incorporated by reference therein or omitted therefrom, as to which
we need make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a 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 (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
B-4
38
Exhibit C
, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Xxxxxxxxx & Company, Inc.
Xxxxxx Xxxxxx & Company, Inc.
RBC Dominion Securities Corporation
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by The Xxxx Group Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of The
Xxxx Group Inc., a Louisiana corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx") Xxxxxxxxx & Company, Inc., Xxxxxx Xxxxxx & Company, Inc. And
RBC Dominion Securities Corporation proposes to enter into a Purchase Agreement
(the "Purchase Agreement") with the Company and the Selling Shareholders
providing for the public offering of shares (the "Securities") of the Company's
common stock, no par value per share (the "Common Stock"). In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder [and an officer and/or director] of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 180 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
-------------------------------
Print Name:
------------------------------
C-1
39
Annex A
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(g)]
We are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations
(i) in our opinion, the audited financial statements [and the
related financial statement schedules] included or incorporated by
reference in the Registration Statement and the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim [consolidated] financial statements
of the Company for the [three month periods ended _________, 19___ and
_________, 19___ , the three and six month periods ended _________,
19___ and _________, 19___ and the three and nine month periods ended
_________, 19___ and _________, 19___, included or incorporated by
reference in the Registration Statement and the Prospectus
(collectively, the "10-Q Financials")] [, a reading of the unaudited
interim [consolidated] financial statements of the Company for the
_____-month periods ended _________, 19___ and _________, 19___,
included in the Registration Statement and the Prospectus (the
"____-month financials")] [, a reading of the latest available
unaudited interim [consolidated] financial statements of the Company],
a reading of the minutes of all meetings of the stockholders and
directors of the Company [and its subsidiaries] and the ____________
and ____________ Committees of the Company's Board of Directors [and
any subsidiary committees] since [day after end of last audited
period], inquiries of certain officials of the Company [and its
subsidiaries] responsible for financial and accounting matters, a
review of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the [description of relevant
periods] and such other inquiries and procedures as may be specified
in such letter, nothing came to our attention that caused us to
believe that:
[(A) the 10-Q Financials incorporated by reference
in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the
1934 Act Regulations applicable to unaudited financial
statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials
incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally
accepted accounting principles;]
[( ) the _____-month financials included in the
Registration Statement and the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations
applicable
Annex A-1
40
to unaudited interim financial statements included in
registration statements or any material modifications should
be made to the _____-month financials included in the
Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;]
( ) at [_________, 19___ and at] a specified date
not more than five days prior to the date of this Agreement,
there was any change in the ___________ of the Company [and
its subsidiaries] or any decrease in the __________ of the
Company [and its subsidiaries] or any increase in the
__________ of the Company [and its subsidiaries,] in each
case as compared with amounts shown in the latest balance
sheet included in the Registration Statement, except in each
case for changes, decreases or increases that the
Registration Statement discloses have occurred or may occur;
or
( ) [for the period from _________, 19___ to
_________, 19___ and ] for the period from _________, 19___
to a specified date not more than five days prior to the date
of this Agreement, there was any decrease in _________,
__________ or ___________, in each case as compared with the
comparable period in the preceding year, except in each case
for any decreases that the Registration Statement discloses
have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii)
above and a reading of the [Selected Financial Data] included in the
Registration Statement [and a reading of the financial statements from
which such data were derived], nothing came to our attention that
caused us to believe that the [Selected Financial Data] included in
the Registration Statement do not comply as to form in all material
respects with the disclosure requirements of Item 301 of Regulation
S-K of the 1933 Act [, that the amounts included in the [Selected
Financial Data] are not in agreement with the corresponding amounts in
the audited [consolidated] financial statements for the respective
periods or that the financial statements not included in the
Registration Statement from which certain of such data were derived
are not in conformity with generally accepted accounting principles];
(iv) we have compared the information in the Registration
Statement under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures
specified herein. Nothing came to our attention that caused us to
believe that this information does not comply as to form in all
material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
[(v) based upon the procedures set forth in clause (ii)
above, a reading of the unaudited financial statements of the Company
for [the most recent period] that have not been included in the
Registration Statement and a review of such financial statements in
accordance with SAS 71, nothing came to our attention that caused us
to believe that the unaudited amounts for _____________ for the [most
recent period] do not agree with the
Annex A-2
41
amounts set forth in the unaudited consolidated financial statements
for those periods or that such unaudited amounts were not determined
on a basis substantially consistent with that of the corresponding
amounts in the audited [consolidated] financial statements;]
[(vi)] we are unable to and do not express any opinion on the
[Pro Forma Combining Statement of Operations] (the "Pro Forma
Statement") included in the Registration Statement or on the pro forma
adjustments applied to the historical amounts included in the Pro
Forma Statement; however, for purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) performed [an audit] [a review in accordance
with SAS 71] of the financial statements to which the pro
forma adjustments were applied;
(C) made inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters about the basis for their determination of the pro
forma adjustments and whether the Pro Forma Statement
complies as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of
Regulation S-X; and
(D) proved the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the Pro Forma Statement; and
(E) on the basis of such procedures and such other
inquiries and procedures as specified herein, nothing came to
our attention that caused us to believe that the Pro Forma
Statement included in the Registration Statement does not
comply as to form in all material respects with the
applicable 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 those
statements; and
[(vii)] in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement,
which are specified herein, and have compared certain of such items
with, and have found such items to be in agreement with, the
accounting and financial records of the Company; and
[(viii) in addition, we [comfort on a financial forecast that
is included in the Registration Statement].
Annex A-3
