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EXHIBIT 1.1
[_____________] Shares
HASTINGS ENTERTAINMENT, INC.
Common Stock
UNDERWRITING AGREEMENT
[_____________], 1998
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
As Representatives of the Several Underwriters
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Hastings Entertainment, Inc., a Texas corporation (the "Company"),
proposes to issue and sell an aggregate of [____________] shares of its common
stock, $0.01 par value per share, to the several Underwriters named in Schedule
II hereto (the "Underwriters"), and the person named in Schedule I hereto (the
"Selling Shareholder") proposes to sell to the several Underwriters an
aggregate of [____________] shares of common stock of the Company. The Company
and the Selling Shareholder are hereinafter sometimes referred to as the
"Sellers". The Company's common stock, $0.01 par value, is hereinafter
referred to as the "Common Stock" and the [____________] shares of Common Stock
to be issued and sold to the Underwriters by the Company and the [____________]
shares of Common Stock to be sold to the Underwriters by the Selling
Shareholder are hereinafter referred to as the "Firm Shares". The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth
in Section 2 hereof, up to an additional [____________] shares (the "Additional
Shares") of Common Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares".
The Company and the Selling Shareholder wish to confirm as follows
their respective agreements with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares. The term
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"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, or, if the registration statement became effective
prior to the execution of this Agreement, as supplemented or amended prior to
the execution of this Agreement. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the registration
statement will be filed and must be declared effective before the offering of
the Shares may commence, the term "Registration Statement" as used in this
Agreement means the registration statement as amended by said post-effective
amendment. If an abbreviated registration statement is prepared and filed with
the Commission in accordance with Rule 462(b) under the Act (an "Abbreviated
Registration Statement"), the term "Registration Statement" as used in this
Agreement includes the Abbreviated Registration Statement. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus.
2. Agreements to Sell and Purchase. Subject to such adjustments
as you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Shareholder herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $[________] per Share (the "purchase price per share"), the number of
Firm Shares which bears the same proportion to the aggregate number of Firm
Shares to be issued and sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule II hereto (or such
number of Firm Shares increased as set forth in Section 12 hereof) bears to the
aggregate number of Firm Shares to be sold by the Company and the Selling
Shareholder.
Subject to such adjustments as you may determine in order to avoid
fractional shares, the Selling Shareholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions set
forth herein, each Underwriter, severally and not jointly, agrees to purchase
from the Selling Shareholder at the purchase price per share that number of
Firm Shares which bears the same proportion to the number of Firm Shares set
forth opposite the name of such Selling Shareholder in Schedule I hereto as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Shareholder.
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The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 30th day after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading), up to an aggregate of
[____________] Additional Shares from the Company. Additional Shares may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. Upon any exercise of the over-allotment
option, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments as you
may determine in order to avoid fractional shares) which bears the same
proportion that the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto ( or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Shareholder.
Certificates in transferable form for the Shares which the Selling
Shareholder agrees to sell pursuant to this Agreement have been placed in
custody with [______________] (the "Custodian") for delivery under this
Agreement pursuant to a Custody Agreement and Power of Attorney (the "Custody
Agreement") executed by the Selling Shareholder appointing [______________] and
[______________] as agents and attorneys-in-fact (the "Attorneys-in-Fact").
The Selling Shareholder agrees that (a) the Shares represented by the
certificates held in custody pursuant to the Custody Agreement are subject to
the interests of the Underwriters and the Company, (b) the arrangements made by
the Selling Shareholder for such custody are, except as specifically provided
in the Custody Agreement, irrevocable, and (c) the obligations of the Selling
Shareholder hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Shareholder or by operation of law, whether by the
death or incapacity of the Selling Shareholder or the occurrence of any other
event. If the Selling Shareholder shall die or be incapacitated or if any
other event shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Shareholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of
the Selling Shareholder, to execute this Agreement and any other documents
necessary or desirable in connection with the sale of the Shares to be sold
hereunder by such Selling Shareholder, to make delivery of the certificates for
such Shares, to receive the proceeds of the sale of such Shares, to give
receipts for such proceeds, to pay therefrom any expenses to be borne by such
Selling Shareholder in connection with the sale and public offering of such
Shares, to distribute the balance thereof to such Selling Shareholder, and to
take such other action as may be necessary or desirable in connection with the
transactions contemplated by this Agreement. Each Attorney-in-Fact agrees to
perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon
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after the Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00
A.M., New York City time, on [______________], 1998 (the "Closing Date"). The
place of closing for the Firm Shares and the Closing Date may be varied by
agreement among you, the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company and the
Attorneys-in-Fact of the Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. The place of closing for any
Additional Shares and the Option Closing Date for such Shares may be varied by
agreement among you, the Company and the Attorneys-in-Fact.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.
(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any request by
the Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or the Prospectus or for additional information; (ii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the period
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of time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge,
three signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits thereto, and will also furnish to you, without charge, such number
of conformed copies of the registration statement as originally filed and of
each amendment thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such quantities
as you have requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the
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judgment of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Prospectus to comply with the Act or
any other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto, and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies thereof. In the event
that the Company and you, as Representatives of the several Underwriters, agree
that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the
Company will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to stockholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 12 hereof or by notice given by you
terminating this Agreement pursuant to Section 12 or Section 13 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Company or the Selling Shareholder to comply with
the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
in connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
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(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.
(m) During the period of 180 days from the date of the
Prospectus, the Company will not, without your prior written consent, issue,
sell, offer or agree to sell, pledge, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer, directly or indirectly, any
shares of Common Stock or other capital stock of the Company (or any securities
convertible into or exercisable or exchangeable for shares of Common Stock or
such other capital stock) or publicly disclose the intention to make any such
disposition or transfer, other than the Company's sale of Shares hereunder and
the Company's issuance of Common Stock upon the exercise of presently
outstanding stock options.
(n) The Company has obtained and delivered to you
agreements executed and delivered by each of its officers and directors and
such of its shareholders as have been heretofore designated by you and listed
on Schedule III attached hereto to the effect that during the period of 180
days from the date of the Prospectus, such persons will not, without your prior
written consent (i) issue, sell, offer or agree to sell, pledge, grant any
option, right or warrant for the sale of, or otherwise dispose of or transfer,
directly or indirectly, any shares of Common Stock or other capital stock of
the Company (or any securities convertible into or exercisable or exchangeable
for shares of Common Stock or such other capital stock) or publicly disclose
the intention to make any such disposition or transfer or (ii) enter into any
hedging, swap or other arrangement that transfers all or a portion of the
economic consequences associated with the beneficial ownership of any Common
Stock or other capital stock of the Company.
(o) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor will it
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the
Common Stock listed, subject to notice of issuance, on the Nasdaq National
Market concurrently with the effectiveness of the registration statement.
6. Agreements of the Selling Shareholder. The Selling
Shareholder agrees with the several Underwriters as follows:
(a) Such Selling Shareholder will cooperate to the extent
necessary to cause the registration statement or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Such Selling Shareholder will pay all Federal and
other taxes, if any on the transfer or sale of the Shares being sold by the
Selling Shareholder to the Underwriters.
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(c) Such Selling Shareholder will do or perform all
things required to be done or performed by the Selling Shareholder prior to the
Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
(d) Such Selling Shareholder has executed or will execute
a "lock-up" letter as provided in Section 5(n) above and, except for the sale
of Shares to the Underwriters pursuant to this Agreement, without your prior
written consent, will not issue, sell, offer or agree to sell, pledge, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer, directly or indirectly, any shares of Common Stock or other capital
stock of the Company (or any securities convertible into or exercisable or
exchangeable for shares of Common Stock or such other capital stock) or
publicly disclose the intention to make any such disposition or transfer.
(e) Except as stated in this Agreement and in the
Prepricing Prospectus and the Prospectus, such Selling Shareholder will not
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(f) Such Selling Shareholder will advise you promptly,
and if requested by you, will confirm such advice in writing, within the period
of time referred to in Section 5(f) hereof, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations or of any change in information relating to such Selling
Shareholder or the Company or any new information relating to the Company or
relating to any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of such Selling Shareholder that suggests
that any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented, if amended or supplemented) is or may be untrue
in any material respect or that the Registration Statement or Prospectus (as
then amended or supplemented, if amended or supplemented) omits or may omit to
state a material fact or a fact necessary to be stated therein in order to make
the statements therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act or
any other law.
7. Representations and Warranties of the Company and the Selling
Shareholder. The Company and the Selling Shareholder represent and warrant,
jointly and severally, to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The registration statement in the form in which it
became or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the prospectus and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material respects with
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the provisions of the Act and did not or will not at any such times 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, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of Common Stock of the
Company, including the shares of Common Stock to be sold by the Selling
Shareholder, have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares to
be issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; and the capital stock of the Company
conforms to the description thereof in the registration statement and the
prospectus.
(d) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Texas with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company.
(e) The Company does not own any capital stock or other
ownership interests in any corporation, partnership, limited liability company,
joint venture or other legal entity.
(f) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the Company,
or to which the Company or any of its respective properties is subject, that
are required to be described in the Registration Statement or the Prospectus
but are not described as required, and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the
Act.
(g) The Company is not in violation of its articles of
incorporation or by-laws, or other organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or of any decree of any court or governmental agency or body having
jurisdiction over the Company, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Company is a party
or by which it or any of its respective properties may be bound.
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(h) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act and the Exchange Act and compliance
with the securities or Blue Sky laws of various jurisdictions, all of which
have been or will be effected in accordance with this Agreement) or conflicts
or will conflict with or constitutes or will constitute a breach of, or a
default under, the articles of incorporation or bylaws, or other organizational
documents, of the Company or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Company is a party or by
which it or any of its respective properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of its respective properties, or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to the terms of any
agreement or instrument to which it is a party or by which it may be bound or
to which any of its property or assets is subject.
(i) The accountants, KPMG Peat Marwick LLP, who have
certified or shall certify the financial statements included in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.
(j) The financial statements, together with related
schedules and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the financial
position, results of operations and changes in financial position of the
Company on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and the books and records
of the Company.
(k) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.
(l) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
Company has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt,
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of the Company, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, net worth or results
of operations of the Company.
(m) The Company has good and marketable title to all
property (real and personal) described in the Prospectus as being owned by it,
free and clear of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and the Prospectus
or in a document filed as an exhibit to the Registration Statement, and all the
property described in the Prospectus as being held under lease by the Company
is held by it under valid, subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(o) The Company has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its respective properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may be
set forth in the Prospectus; the Company has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such permit, subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the Prospectus,
none of such permits contains any restriction that is materially burdensome to
the Company.
(p) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) To the Company's knowledge, neither the Company nor
any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(r) The Company has filed all tax returns required to be
filed, which returns are complete and correct, and the Company is not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto.
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(s) No holder of any security of the Company has any
right to require registration of shares of Common Stock or any other security
of the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(t) The Company owns or possesses all patents,
trademarks, trademark registrations, service marks, service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by it or necessary for the conduct
of its businesses, and the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the Company with respect to
the foregoing.
(u) The Company is not now, and after sale of the Shares
to be sold by it hereunder and application of the net proceeds from such sale
as described in the Prospectus under the caption "Use of Proceeds" will not be,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
8. Representations and Warranties of the Selling Shareholder.
The Selling Shareholder represents and warrants to each Underwriter that:
(a) Such Selling Shareholder now has, and on the Closing
Date will have, valid and marketable title to the Shares to be sold by such
Selling Shareholder, free and clear of any lien, claim, security interest or
other encumbrance, including, without limitation, any restriction on transfer.
(b) Such Selling Shareholder now has, and on the Closing
Date will have, full legal right, power and authorization, and any approval
required by law, to sell, assign transfer and deliver such Shares in the manner
provided in this Agreement, and upon delivery of and payment for such Shares
hereunder, the several Underwriters will acquire valid and marketable title to
such Shares free and clear of any lien, claim, security interest, or other
encumbrance.
(c) This Agreement and the Custody Agreement have been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder and are the valid and binding agreements of such Selling
Shareholder enforceable against such Selling Shareholder in accordance with
their terms.
(d) Neither the execution and delivery of this Agreement
or the Custody Agreement by or on behalf of such Selling Shareholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Shareholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares) or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder is or may be bound or to which any of such
Selling Shareholder's property or assets is subject, or any
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statute, law, rule, regulation, ruling, judgment, injunction, order or decree
applicable to such Selling Shareholder or to any property or assets of such
Selling Shareholder.
(e) The Registration Statement and the Prospectus,
insofar as they relate to such Selling Shareholder, do not and will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(f) Such Selling Shareholder does not have any knowledge
or any reason to believe that the Registration Statement or the Prospectus (or
any amendment or supplement thereto) contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(g) The representations and warranties of such Selling
Shareholder in the Custody Agreement are, and on the Closing Date will be, true
and correct.
(h) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.
9. Indemnification and Contribution. (a) The Company and the
Selling Shareholder, jointly and severally, agree to indemnify and hold
harmless each of you and each other Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition to
any liability which the Company or any Selling Shareholder may otherwise have.
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(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company or the Selling Shareholder,
such Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the indemnifying parties
have agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying parties and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party and
any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, the Selling Shareholder, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Selling Shareholder to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, the Selling Shareholder,
or any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense
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thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, the Selling Shareholder, and any such
controlling person shall have the rights and duties given to the Underwriters
by paragraph (b) above. The foregoing indemnity agreement shall be in addition
to any liability which any Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Shareholder on the one hand and the Underwriters on
the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Shareholder on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Shareholder bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Shareholder or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Shareholder, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Shareholder on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Shareholder on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company, the Selling Shareholder and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by a pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim
or defending any such action,
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suit or proceeding. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 9 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Shareholder or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
9.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your satisfaction.
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(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company not
contemplated by the Prospectus, which in your opinion, as Representatives of
the several Underwriters, would materially, adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Company
or any officer or director of the Company or the Selling Shareholder which
makes any statement made in the Prospectus untrue or which, in the opinion of
the Company and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
your opinion, as Representatives of the several Underwriters, materially
adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (a Professional Corporation), counsel for
the Company and the Selling Shareholder, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws of
the State of Texas with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse
effect on the condition (financial or other), business, properties,
net worth or results of operations of the Company and the Subsidiaries
taken as a whole;
(ii) The authorized and outstanding capital stock
of the Company is as set forth under the caption "Capitalization" in
the Prospectus; and the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(iii) All the shares of capital stock of the
Company outstanding prior to the issuance of the Shares to be issued
and sold by the Company hereunder, have been duly authorized and
validly issued, and are fully paid and nonassessable;
(iv) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor
in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free of any preemptive or similar rights
that entitle or will entitle any person to acquire any Shares upon the
issuance thereof by the Company;
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(v) The form of certificates for the Shares
conforms to the requirements of Texas law;
(vi) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act
and, to the best knowledge of such counsel after reasonable inquiry,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission; and any required
filing of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(vii) The Company has corporate power and authority
to enter into this Agreement and to issue, sell and deliver the Shares
to be sold by it to the Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company and is a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
as enforcement of rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws or principles of public
policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by
general equitable principles;
(viii) The Company is not in violation of its
articles of incorporation or bylaws, or other organizational
documents, or to the best knowledge of such counsel after reasonable
inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other
evidence of indebtedness, except as may be disclosed in the
Prospectus;
(ix) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement,
compliance by the Company with the provisions hereof, nor consummation
by the Company of the transactions contemplated hereby conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, the articles of incorporation or bylaws, or other
organizational documents, of the Company or any agreement, indenture,
lease or other instrument to which the Company is a party or by which
it or any of its respective properties is bound that is an exhibit to
the Registration Statement, or is known to such counsel after
reasonable inquiry, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company, nor will any such action result in any violation of any
existing law or regulation, or any violation of any ruling (assuming
compliance with all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such counsel after
reasonable inquiry, applicable to the Company or any of its respective
properties;
(x) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official
is required on the part of the Company (except as have been obtained
under the Act and the Exchange Act or such as may be required under
state securities or Blue
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Sky laws governing the purchase and distribution of the Shares) for
the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement;
(xi) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein, as to which such counsel need
not express any opinion) comply as to form in all material respects
with the requirements of the Act;
(xii) To the best knowledge of such counsel after
reasonable inquiry, (A) other than as described or contemplated in the
Prospectus (or any supplement thereto), there are no legal or
governmental proceedings pending or threatened against the Company, or
to which the Company or any of its property is subject, which are
required to be described in the Registration Statement or Prospectus
(or any amendment or supplement thereto) and (B) there are no
agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or to be filed as
an exhibit to the Registration Statement that are not described or
filed as required, as the case may be;
(xiii) To the best knowledge of such counsel after
reasonable inquiry, the Company is not in violation of any law,
ordinance, or administrative or governmental rule or regulation
applicable to the Company or of any decree of any court or
governmental agency or body having jurisdiction over the Company;
(xiv) The statements in the Registration Statement
and Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents, or refer to statements of law or
legal conclusions, are accurate and present fairly the information
required to be shown;
(xv) This Agreement and the Custody Agreement have
each been duly executed and delivered by or on behalf of the Selling
Shareholder and are valid and binding agreements of the Selling
Shareholder enforceable against the Selling Shareholder in accordance
with their terms;
(xvi) To the knowledge of such counsel, the Selling
Shareholder has full legal right, power and authorization, and any
approval required by law, to sell, assign, transfer and deliver good
and marketable title to the Shares which such Selling Shareholder has
agreed to sell pursuant to this Agreement;
(xvii) The execution and delivery of this Agreement
and the Custody Agreement by the Selling Shareholder and the
consummation of the transactions contemplated hereby and thereby will
not conflict with, violate, result in a breach of or constitute a
default under the terms or provisions of any agreement, indenture,
mortgage or other instrument known to such counsel to which the
Selling Shareholder is a party or by which it or any of its assets or
property is bound, or any court order or decree or any law,
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rule, or regulation applicable to the Selling Shareholder or to any of
the property or assets of the Selling Shareholder;
(xviii) Upon delivery of the Shares pursuant to this
Agreement and payment therefor as contemplated herein the Underwriters
will acquire good and marketable title to the Shares free and clear of
any lien, claim, security interest, or other encumbrance, restriction
on transfer or other defect in title; and
(xix) The Company has full corporate power and
authority, and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the failure
so to have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the aggregate,
would not have a material adverse effect on the business, properties,
operations or financial condition of the Company), to own its
properties and to conduct its business as now being conducted, as
described in the Prospectus;
(xx) The Company does not own any capital stock or
other ownership interests in any corporation, partnership, limited
liability company, joint venture or other legal entity.
(xxi) The Company owns all patents, trademarks,
trademark registrations, service marks, service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by it or necessary
for the conduct of its business, and such counsel is not aware of any
claim to the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing;
(xxii) Except as described in the Prospectus, there
are no outstanding options, warrants or other rights calling for the
issuance of, and such counsel does not know of any commitment, plan or
arrangement to issue, any shares of capital stock of the Company or
any security convertible into or exchangeable or exercisable for
capital stock of the Company; and
(xxiii) Except as described in the Prospectus, there
is no holder of any security of the Company or any other person who
has the right, contractual or otherwise, to cause the Company to sell
or otherwise issue to them, or to permit them to underwrite the sale
of, the Shares or the right to have any Common Stock or other
securities of the Company included in the registration statement or
the right, as a result of the filing of the registration statement, to
require registration under the Act of any shares of Common Stock or
other securities of the Company.
(xxiv) Although counsel has not undertaken, except
as otherwise indicated in their opinion, to determine independently,
and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such
counsel has participated in the preparation of the Registration
Statement and the Prospectus, including review and discussion of the
contents thereof, and nothing has come to the attention of such
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counsel that has caused it to believe that the Registration Statement
at the time the Registration Statement became effective, or the
Prospectus, as of its date and as of the Closing Date or the Option
Closing Date, as the case may be, 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 any amendment or supplement to the Prospectus, as
of its respective date, and as of the Closing Date or the Option
Closing Date, as the case may be, contained any untrue statement of a
material fact or omitted 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 (it being understood that
such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial
and statistical data included in the Registration Statement or the
Prospectus).
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of Texas, provided that (A) each such local counsel is acceptable
to the Representatives, (B) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is delivered to the
Representatives and is in form and substance satisfactory to them and their
counsel, and (C) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Underwriters, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, with respect to the matters referred to in clauses (iv), (vi),
(vii), (xi) and (xxiv) of the foregoing paragraph (c) and such other related
matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from KPMG Peat Marwick LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company; (iv)
the Company shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company other than those reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (v) all the
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representations and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(g) and in
Section 10(h) hereof.
(g) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(h) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by the Selling Shareholder to the effect set forth in this Section
10(i) and in Section 10(j) hereof.
(i) The Selling Shareholder shall not have failed at or
prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(j) The Shares shall have been listed or approved for
listing upon notice of issuance on the Nasdaq National Market.
(k) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
any Attorney-in-Fact or the Selling Shareholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company or the Selling
Shareholder, as the case may be, to each Underwriter as to the statements made
therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 10, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (i) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c) and (d) shall be revised to reflect the sale of Additional Shares.
11. Expenses. The Sellers (in proportion to the number of Shares
being offered by each of them, including any Additional Shares which the
Underwriters shall have elected to purchase) agree to pay the following costs
and expenses and all other costs and expenses incident to the performance by
them of their obligations hereunder: (a) the preparation, printing or
reproduction,
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and filing with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectus, and each amendment or supplement to any of them; (b) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectus, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Shares; (c) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the
Shares; (d) the printing (or reproduction) and delivery of this Agreement, the
Blue Sky Memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (e)
the registration of the Shares under the Exchange Act and the listing of the
Shares on the Nasdaq National Market; (f) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to
the preparation, printing or reproduction, and delivery of the Blue Sky
Memorandum and such registration and qualification); (g) the filing fees and
the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc.; (h) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (i) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and the Selling Shareholder.
12. Effective Date of Agreement. This Agreement shall become
effective: (a) upon the execution and delivery hereof by the parties hereto;
or (b) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Company and the Selling Shareholder.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such
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Shares by one or more non-defaulting Underwriters or other party or parties
approved by you and the Company are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any such default of any such Underwriter under
this Agreement. The term "Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule II hereto who,
with your approval and the approval of the Company, purchases Shares which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or the Selling Shareholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (a) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (b) a general moratorium on commercial banking
activities in New York or Texas shall have been declared by either federal or
state authorities, or (c) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first, third and [________]
paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in
the Prospectus, constitute the only information furnished by or on behalf of
the Underwriters through you as such information is referred to in Sections
7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (a) if to the Company, at the office of
the Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and Chief Executive Officer; or (b) if
to the Selling Shareholder, at [___________________________], Attention:
[___________________], or (c) if to you, as Representatives of the several
Underwriters, care of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Investment Banking Division.
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This Agreement has been and is made solely for the benefit of the
several Underwriters, the Selling Shareholder, the Company, its directors and
officers, and the other controlling persons referred to in Section 9 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several Underwriters.
Very truly yours,
HASTINGS ENTERTAINMENT, INC.
By:
---------------------------------------
Chairman of the Board
The Selling Shareholder named in Schedule I
By:
---------------------------------------
Confirmed as of the date first above
mentioned on behalf of themselves and the
other several Underwriters named in
Schedule II hereto.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
As Representatives of the Several
Underwriters
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
---------------------------------------
Managing Director
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SCHEDULE I
HASTINGS ENTERTAINMENT, INC.
SELLING STOCKHOLDERS NUMBER OF FIRM SHARES
-------------------- ---------------------
Estate of ▇▇▇ ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . ______________
Total . . . . . . . . . . . . . . . . . . . ______________
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SCHEDULE II
HASTINGS ENTERTAINMENT, INC.
NUMBER OF
UNDERWRITER FIRM SHARES
----------- -----------
▇▇▇▇▇ ▇▇▇▇▇▇, Inc. . . . . . . . . . . . . . . . . . . . . . .
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. . . . . . . . . . . . . . . . . . . .
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SCHEDULE III
NAMES OF SHAREHOLDERS SUBJECT TO THE LOCK-UP PROVISION
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