EXHIBIT 1.1
GULF ISLAND FABRICATION, INC.
(A LOUISIANA CORPORATION)
COMMON STOCK
UNDERWRITING AGREEMENT
DATED: NOVEMBER , 1997
GULF ISLAND FABRICATION, INC.
UNDERWRITING AGREEMENT
November, 1997
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX RICE & COMPANY L.L.C.
As Representatives of the Several
Underwriters Named in Schedule A hereto
c/o Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
The selling shareholders named in Schedule B (the "Selling Shareholders")
of Gulf Island Fabrication, Inc., a Louisiana corporation (the "Company"),
propose to issue and sell to the underwriters named in Schedule A (collectively,
the "Underwriters") an aggregate of 2,000,000 shares of Common Stock, no par
value per share (the "Common Stock"), of the Company (the "Firm Shares"). The
Firm Shares are to be sold to each Underwriter, acting severally and not
jointly, in such amounts as are set forth in Schedule A opposite the name of
such Underwriter.
The Selling Shareholders also grant to the Underwriters the option
described in Section 3 to purchase, on the same terms as the Firm Shares, up to
300,000 additional shares of Common Stock (the "Option Shares") solely to cover
over-allotments. The Firm Shares, together with all or any part of the Option
Shares, are collectively herein called the "Shares."
Section 1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333- ) with
respect to the Shares, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the applicable
rules and regulations (the "1933 Act Regulations") of the Securities and
Exchange Commission (the "Commission"), and has been filed with the
Commission; and such amendments to such registration statement as may have
been required prior to the date hereof have been filed with the Commission,
and such amendments have been similarly prepared. Copies of such
registration statement and amendment or amendments and of each related
preliminary prospectus, and the exhibits, financial statements and
schedules, as amended and revised, have been delivered to you. The Company
has prepared in the same
manner, and proposes so to file with the Commission, one of the following:
(i) prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, (ii) if the
Company does not rely on Rule 434 of the 1933 Act, a final prospectus in
accordance with Rules 430A and 424(b) of the 1933 Act Regulations or (iii)
if the Company relies on Rule 434 of the 1933 Act, a term sheet relating to
the Shares that shall identify the preliminary prospectus that it
supplements containing such information as is required or permitted by
Rules 434, 430A and 424(b) of the 1933 Act. The Company also may file a
related registration statement with the Commission pursuant to Rule 462(b)
of the 1933 Act for the purpose of registering certain additional shares of
Common Stock, which registration statement will be effective upon filing
with the Commission. As filed, such amendment, any registration statement
filed pursuant to Rule 462(b) of the 1933 Act and any term sheet and form
of final prospectus, or such final prospectus, shall include all Rule 430A
Information (as defined below) and, except to the extent that you shall
agree in writing to a modification, shall be in all respects in the form
furnished to you prior to the date and time that this Agreement was
executed and delivered by the parties hereto, or, to the extent not
completed at such date and time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest preliminary prospectus) as the Company shall have previously advised
you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Time (as hereinafter
defined), shall also mean such registration statement as so amended;
provided, however, that such term shall also include all Rule 430A
Information contained in any Prospectus and any Term Sheet (as hereinafter
defined) and deemed to be included in such registration statement at the
time such registration statement becomes effective as provided by Rule 430A
of the 1933 Act Regulations. The term "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time
it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean (a) if the Company relies
on Rule 434 of the 1933 Act Regulations, the Term Sheet relating to the
Shares that is first filed pursuant to Rule 424(b)(7) of the 1933 Act
Regulations, together with the Preliminary Prospectus identified therein
that such Term Sheet supplements or (b) if the Company does not rely on
Rule 434 of the 1933 Act Regulations, the prospectus relating to the Shares
in the form in which it is first filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations or, if no filing pursuant to Rule 424(b)
of the 1933 Act Regulations is required, shall mean the form of final
prospectus included in the Registration Statement at the time such
Registration Statement becomes effective. The term "Rule 430A Information"
means information with respect to the Shares and the offering thereof
permitted pursuant to Rule 430A of the 1933 Act Regulations to be omitted
from the Registration Statement when it becomes effective. The term "462(b)
Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the 1933 Act (including the
Registration Statement and any Preliminary Prospectus or Prospectus
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incorporated therein at the time such registration statement becomes
effective). The term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 of the 1933 Act Regulations. Any reference to the
"date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and no proceedings for that
purpose have been instituted or threatened by the Commission or the state
securities or blue sky authority of any jurisdiction, and each Preliminary
Prospectus and any amendment or supplement thereto, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933
Act and the 1933 Act Regulations, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter expressly
for use in the Registration Statement or any 462(b) Registration Statement.
(c) When the Registration Statement and any 462(b) Registration
Statement shall become effective, when any Term Sheet that is part of the
Prospectus is filed with the Commission pursuant to Rule 434, when any
Prospectus is first filed pursuant to Rule 424(b) of the 1933 Act
Regulations, when any amendment to the Registration Statement or any 462(b)
Registration Statement becomes effective, and when any supplement to the
Prospectus or any Term Sheet is filed with the Commission and at the
Closing Time and Date of Delivery (as hereinafter defined), (i) the
Registration Statement, the 462(b) Registration Statement, the Prospectus,
the Term Sheet and any amendments thereof and supplements thereto will
conform in all material respects with the applicable requirements of the
1933 Act and the 1933 Act Regulations, and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term
Sheet nor any amendment or supplement thereto will contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter expressly for use in the Registration Statement or any 462(b)
Registration Statement.
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Louisiana
with all requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus. The Company is duly qualified to transact
business as a foreign corporation and is in good standing in each of the
jurisdictions in which the ownership or leasing of its properties or the
nature or conduct of its
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business as described in the Registration Statement and the Prospectus
requires such qualification, except where the failure to do so would not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
the Subsidiaries (as hereinafter defined) taken as a whole.
(e) All of the Company's subsidiaries are named on an exhibit to
the Registration Statement (each a "Subsidiary" and collectively the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
state of its incorporation with all requisite corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus. Each such
entity is duly qualified to do business and is in good standing as a
foreign corporation in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business as
described in the Registration Statement and the Prospectus conducted
requires such qualification, except where the failure to do so would not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of such
Subsidiaries.
(f) The Company has full corporate right, power and authority to
enter into this Agreement and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement of the Company, enforceable
in accordance with its terms, except to the extent that enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws of general applicability relating to or affecting creditors' rights,
or by general principles of equity whether considered at law or at equity
and except to the extent enforcement of the indemnification provisions set
forth in Section 6 of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
(g) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the execution, delivery and
performance of this Agreement by the Company has been made or obtained and
is in full force and effect, except as may be required under applicable
state securities laws.
(h) The execution, delivery and performance of this Agreement by
the Company will not conflict with or result in a breach or violation of
any of the terms and provisions of, or (with or without the giving of
notice or the passage of time or both) constitute a default under the
charter or bylaws of the Company or the Subsidiaries, respectively, or
under any indenture, mortgage, deed of trust, loan agreement, note, lease
or other agreement or instrument to which the Company or the Subsidiaries,
respectively, is a party or to which the Company or the Subsidiaries,
respectively, any of their respective properties or other assets is
subject; or any applicable statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to any of
the foregoing or any of their respective
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properties; or result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the Company or the
Subsidiaries, respectively.
(i) No preemptive rights of shareholders exist with respect to any
of the Shares which have not been satisfied or waived. No person or entity
holds a right to require or participate in the registration under the 1933
Act of the Shares pursuant to the Registration Statement which has not been
satisfied or waived; and, except as set forth in the Prospectus, no person
holds a right to require registration under the 1933 Act of any shares of
Common Stock of the Company at any other time which has not been satisfied
or waived.
(j) The Company's authorized, issued and outstanding capital stock
is as disclosed in the Prospectus. All of the issued shares of capital
stock of the Company, including the Shares, have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the Company's capital stock contained in the Prospectus.
(k) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and are owned directly or indirectly through another
Subsidiary by the Company free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever. Other than the
Subsidiaries, the Company does not own, directly or indirectly, any capital
stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association.
(l) Except as disclosed in the Prospectus, there are no outstanding
(i) securities or obligations of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock of the Company or
any such Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options.
(m) The Company and the Subsidiaries have good and marketable title
to all real property, if any, and good title to all personal property owned
by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as do not materially and adversely
affect the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company and the Subsidiaries;
and any real property and buildings held under lease by the Company or any
Subsidiary are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary.
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(n) The financial statements of the Company and its consolidated
Subsidiaries included in the Registration Statement and Prospectus present
fairly the financial position of the Company and its consolidated
Subsidiaries as of the dates indicated and the results of operations and
cash flows for the Company and its consolidated Subsidiaries for the
periods specified, all in conformity with generally accepted accounting
principles applied on a consistent basis. The financial statements of
Dolphin Services, Inc., Dolphin Sales and Rentals, Inc. and Dolphin Steel
Sales, Inc. (collectively, "Dolphin Services") included in the Registration
Statement and Prospectus present fairly the financial position of Dolphin
Services as of the dates indicated and the results of operations and cash
flows for Dolphin Services for the periods specified, all in conformity
with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules included in the Registration
Statement and the historical financial amounts in the Prospectus under the
captions "Prospectus Summary -- Summary Financial and Operating Data",
"Capitalization" and "Selected Financial and Operating Data" fairly present
the information shown therein and have been compiled on a basis consistent
with the historical financial statements included in the Registration
Statement and the Prospectus. The unaudited pro forma financial information
(including the related notes) included in the Prospectus or any Preliminary
Prospectus complies as to form in all material respects to the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations, and
management of the Company believes that the assumptions underlying the pro
forma adjustments are reasonable. Such pro forma adjustments have been
properly applied to the historical amounts in the compilation of the
information and such information fairly presents with respect to the
Company and the Subsidiaries, the financial position, results of operations
and other information purported to be shown therein at the respective dates
and for the respective periods specified.
(o) Price Waterhouse LLP, who have examined and are reporting upon
the audited financial statements and schedules of the Company and Dolphin
Services included in the Registration Statement, are, and were during the
periods covered by their reports included in the Registration Statement and
the Prospectus, independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(p) Ernst & Young LLP, who have examined the unaudited financial
statements of the Company included in the Registration Statement, are
independent accountants within the meaning of the 1933 Act and the 1933 Act
Regulations.
(q) None of the Company or the Subsidiaries has sustained, since
December 31, 1996, any material loss or interference with its business from
fire, explosion, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or arbitrators' or
court or governmental action, order or decree; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, and except as otherwise stated in the Registration
Statement and Prospectus, there has not been (i) any material change in the
capital stock, long-term debt, obligations under capital leases or short-
term borrowings of the Company, or the Subsidiaries, or (ii) any material
adverse change, or
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any development which could reasonably be seen as involving a prospective
material adverse change, in or affecting the business, prospects,
properties, assets, results of operations or condition (financial or other)
of the Company, or the Subsidiaries.
(r) Neither the Company nor its Subsidiaries is in violation of its
respective charter, or by-laws, and no default exists, and no event has
occurred, nor state of facts exists, which, with notice or after the lapse
of time to cure or both, would constitute a default in the due performance
and observance of any obligation, agreement, term, covenant, consideration
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which any such
entity is a party or to which any such entity or any of its properties is
subject. None of the Company or its Subsidiaries is in violation of, or in
default with respect to, any statute, rule, regulation, order, judgment or
decree, except as may be properly described in the Prospectus or such as in
the aggregate do not now have and will not in the future have a material
adverse effect on the financial position, results of operations or business
of each such entity, respectively.
(s) There is not pending or threatened any action, suit,
proceeding, inquiry or investigation against the Company, the Subsidiaries
or any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, before or
brought by any court or governmental agency or body or board of arbitrators
that is required to be described in the Registration Statement or the
Prospectus but is not described as required.
(t) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown, and there
are no contracts, leases, or other documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described or filed as
required.
(u) The Company owns, possesses or has obtained all material
permits, licenses, franchises, certificates, consents, orders, approvals
and other authorizations of governmental or regulatory authorities or other
entities as are necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as presently conducted,
or as contemplated in the Prospectus to be conducted, and the Company has
not received any notice of proceedings relating to revocation or
modification of any such licenses, permits, franchises, certificates,
consents, orders, approvals or authorizations.
(v) The Company owns or possesses adequate license or other rights
to use all patents, trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets, manufacturing processes, other
intangible property rights and know-how (collectively "Intangibles")
necessary to entitle the Company to conduct its business as described in
the Prospectus, and the Company has not received notice of infringement of
or conflict with (and knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which could
materially and adversely affect the business,
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prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company.
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; and, none of the Company,
the Subsidiaries, or any employee or agent thereof, has made any payment of
funds of the Company or the Subsidiaries, or received or retained any funds
and no funds of the Company or the Subsidiaries have been set aside to be
used for any payment, in each case in violation of any law, rule or
regulation.
(x) Each of the Company and the Subsidiaries has filed on a timely
basis all necessary federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has been asserted against
any such entity, nor does any such entity know of any tax deficiency which
is likely to be asserted against any such entity which if determined
adversely to any such entity, could materially adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of any such entity, respectively. All tax
liabilities are adequately provided for on the respective books of such
entities.
(y) The Company and its Subsidiaries maintain insurance (issued by
insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
(z) Each of the Company, the Subsidiaries, and their officers,
directors or affiliates has not taken and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected
to, cause or result in or constitute the stabilization or manipulation of
any security of the Company or to facilitate the sale or resale of the
Shares.
(aa) The Company is not, will not become as a result of the
transactions contemplated hereby, or will not conduct its respective
businesses in a manner in which the Company would become, "an investment
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
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Section 2. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders represents and warrants to, and agrees with,
each of the several Underwriters and the Company that:
(a) The Selling Shareholder has full right, power and authority to
enter into this Agreement, the Power of Attorney (as hereinafter defined)
and the Custody Agreement (as hereinafter defined) and to sell, assign,
transfer and deliver to the Underwriters the Shares to be sold by the
Selling Shareholder hereunder; and the execution and delivery of this
Agreement, the Power of Attorney and the Custody Agreement have been duly
authorized by all necessary action of the Selling Shareholder.
(b) The Selling Shareholder has duly executed and delivered this
Agreement, the Power of Attorney and the Custody Agreement, and each
constitutes the valid and binding agreement of the Selling Shareholder
enforceable against the Selling Shareholder in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting
the enforcement of creditors' rights generally and to general equitable
principles.
(c) No consent, approval, authorization, order or declaration of or
from, or registration, qualification or filing with, any court or
governmental agency or body is required for the sale of the Shares to be
sold by the Selling Shareholder or the consummation of the transactions
contemplated by this Agreement, the Power of Attorney or the Custody
Agreement, except the registration of such Shares under the 1933 Act
(which, if the Registration Statement is not effective as of the time of
execution hereof, shall be obtained as provided in this Agreement) and such
as may be required under state securities or blue sky laws in connection
with the offer, sale and distribution of such Shares by the Underwriters.
(d) The sale of the Shares to be sold by such Selling Shareholder
and the performance of this Agreement, the Power of Attorney and the
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with, or (with or without the giving
of notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Selling Shareholder is a party or to
which any of its properties or assets is subject, nor will such action
conflict with or violate any provision of the charter or bylaws or other
governing instruments of the Selling Shareholder, if any, or any statute,
rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Selling
Shareholder or any of the Selling Shareholder's properties or assets.
(e) The Selling Shareholder has, and at the Closing Time (as
defined in Section 3 hereof) or, at the Date of Delivery, as the case may
be, the Selling Shareholder will have, good and valid title to the Shares
to be sold by the Selling Shareholder hereunder, free and
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clear of all liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever; and, upon delivery of such Shares against payment
therefor as provided herein, good and valid title to such Shares, free and
clear of all liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever, will pass to the several Underwriters.
(f) The Selling Shareholder has not (i) taken, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares or (ii) since the filing of
the Registration Statement (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Company.
(g) When any Preliminary Prospectus was filed with the Commission
it (i) contained all statements required to be stated therein in accordance
with, and complied in all material respects with the requirements of, the
1933 Act and the rules and regulations of the Commission thereunder, and
(ii) did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto or any
462(b) Registration Statement or any amendment thereto was or is declared
effective and at the Closing Time or the Date of Delivery, as the case may
be, it (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the 1933 Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When
the Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment
or supplement is not required to be so filed, when the Registration
Statement or the amendment thereto containing such amendment or supplement
to the Prospectus was or is declared effective), and at the Closing Time or
the Date of Delivery, as the case may be, the Prospectus, as amended or
supplemented at any such time, (i) contained or will contain all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the 1933 Act and
the rules and regulations of the Commission thereunder and (ii) did not or
will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (g) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement,
any 462(b) Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you specifically for use therein.
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In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the Closing Time (as
hereinafter defined) a properly completed and executed United States Treasury
Department form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
Each of the Selling Shareholders represents and warrants that certificates
in negotiable form representing all of the Shares to be sold by such Selling
Shareholder hereunder have been placed in custody under a custody agreement (the
"Custody Agreement"), in the form heretofore furnished to and approved by you,
duly executed and delivered by such Selling Shareholder to American Stock
Transfer and Trust Company, as custodian (the "Custodian"), and that such
Selling Shareholder has duly executed and delivered a Power of Attorney (the
"Power of Attorney"), in the form heretofore furnished to and approved by you,
appointing Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxxx, III as such Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 3 hereof, to authorize the delivery of the
Shares to be sold by such Selling Shareholder hereunder and otherwise to act on
behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
Each of the Selling Shareholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Shareholder
under the Custody Agreement are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Shareholder for such
custody, and the appointment by such Selling Shareholder of the Attorneys-in-
Fact by the Power of Attorney, are irrevocable. Each of the Selling
Shareholders specifically agrees that the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Shareholder or, in the case of
an estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event.
Section 3. Sale and Delivery of the Shares to the Underwriters;
Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Selling Shareholders agree to sell to each of the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Selling
Shareholders, at the Closing Time (as defined below), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule A (the
proportion which each Underwriter's share of the total number of the Firm
Shares bears to the total number of Firm Shares is hereinafter referred to
as such Underwriter's "underwriting obligation proportion"), at a purchase
price of $ per share.
11
(b) In addition, on the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
the Selling Shareholders hereby grant an option to the Underwriters to
purchase, severally and not jointly, up to an additional 300,000 Option
Shares at the same purchase price as shall be applicable to the Firm
Shares. The option hereby granted will expire if not exercised within the
thirty (30) day period after the date of the Prospectus by giving written
notice to the Selling Shareholders. The option granted hereby may be
exercised in whole or in part (but not more than once) by you, as
representatives of the Underwriters, only for the purpose of covering over-
allotments that may be made in connection with the offering and
distribution of the Firm Shares. The notice of exercise shall set forth the
number of Option Shares as to which the several Underwriters are exercising
the option, and the time and date of payment therefor and of issuance and
delivery thereof. Such time and date of payment, issuance and delivery (the
"Date of Delivery") shall be determined by you but shall not be later than
three full business days after the exercise of such option, nor in any
event prior to the Closing Time. If the option is exercised as to all or
any portion of the Option Shares, the Option Shares as to which the option
is exercised shall be purchased by the Underwriters, severally and not
jointly, in their respective underwriting obligation proportions.
(c) Payment of the purchase price for and delivery of certificates
in definitive form representing the Firm Shares shall be made at the
offices of Xxxxxx Xxxxxx & Company, Inc., 00 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx 00000 or at such other place as shall be agreed upon by the
Selling Shareholders and you, at 10:00 a.m., either (i) on the third full
business day after the execution of this Agreement, or (ii) at such other
time not more than ten full business days thereafter as you and the Company
shall determine (unless, in either case, postponed pursuant to the term
hereof), (such date and time of payment and delivery being herein called
the "Closing Time"). In addition, in the event that any or all of the
Option Shares are purchased by the Underwriters, payment of the purchase
price for and delivery of certificates in definitive form representing the
Option Shares shall be made at the offices of Xxxxxx Xxxxxx & Company, Inc.
in the manner set forth above, or at such other place as the Selling
Shareholders and you shall determine, on the Date of Delivery as specified
in the notice from you to the Selling Shareholders. Payment for the Firm
Shares and the Option Shares shall be made to the Selling Shareholders by
wire transfer in same-day funds to the accounts designated to the
Underwriters in writing by the Selling Shareholders against delivery to you
for the respective accounts of the Underwriters of the Shares to be
purchased by them.
(d) The certificates representing the Shares to be purchased by the
Underwriters shall be in such denominations and registered in such names as
you may request in writing at least two full business days before the
Closing Time or the Date of Delivery, as the case may be. The certificates
representing the Shares will be made available at the offices of Xxxxxx
Xxxxxx & Company, Inc. or at such other place as Xxxxxx Xxxxxx & Company,
Inc. may
12
designate for examination and packaging not later than 10:00 a.m. at least
one full business day prior to the Closing Time or the Date of Delivery, as
the case may be.
(e) After the Registration Statement becomes effective, you intend
to offer the Shares to the public as set forth in the Prospectus, but after
the public offering of such Shares you may in your discretion vary the
public offering price.
Section 4. Certain Covenants of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (if not yet effective at the date and time
that this Agreement is executed and delivered by the parties hereto). If
the Company elects to rely upon Rule 430A of the 1933 Act Regulations or
the filing of the Prospectus is otherwise required under Rule 424(b) of the
1933 Act Regulations, the Company will comply with the requirements of Rule
430A and will file the Prospectus, properly completed, pursuant to the
applicable provisions of Rule 424(b), or a Term Sheet pursuant to and in
accordance with Rule 434, within the time period prescribed. If the Company
elects to rely upon Rule 462(b), the Company shall file a 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 p.m., Washington, D.C. time on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee. The Company will notify you
immediately, and confirm the notice in writing, (i) when the Registration
Statement, 462(b) Registration Statement or any post-effective amendment to
the Registration Statement, shall have become effective, or any supplement
to the Prospectus or any amended Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of any request by
the Commission to amend the Registration Statement or 462(b) Registration
Statement or amend or supplement the Prospectus or for additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any 462(b)
Registration Statement or of any order preventing or suspending the use of
any Preliminary Prospectus or the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the institution or
threatening of any proceeding for any such purposes. The Company will use
every reasonable effort to prevent the issuance of any such stop order or
of any order preventing or suspending such use and, if any such order is
issued, to obtain the withdrawal thereof at the earliest possible moment.
(b) The Company will not at any time file or make any amendment to
the Registration Statement, or any amendment or supplement (i) to the
Prospectus, if the Company has not elected to rely upon Rule 430A, (ii) if
the Company has elected to rely upon Rule 430A, to either the Prospectus
included in the Registration Statement at the time it becomes effective or
to the Prospectus filed in accordance with Rule 424(b) or any Term Sheet
filed in accordance with Rule 434, or (iii) if the Company has elected to
rely upon Rule 462(b), to any 462(b) Registration Statement in any case if
you shall not have previously been advised and
13
furnished a copy thereof a reasonable time prior to the proposed filing, or
if you or counsel for the Underwriters shall object to such amendment or
supplement.
(c) The Company has furnished or will furnish to you, at its
expense, as soon as available, four copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or
after the Registration Statement becomes effective, copies of all exhibits
and documents filed therewith and signed copies of all consents and
certificates of experts, as you may reasonably request, and has furnished
or will furnish to each Underwriter, one conformed copy of the Registration
Statement as originally filed and of each amendment thereto.
(d) The Company will deliver to each Underwriter, at the Company's
expense, from time to time, as many copies of each Preliminary Prospectus
as such Underwriter may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will deliver to each Underwriter, at the Company's expense, as soon
as the Registration Statement shall have become effective and thereafter
from time to time as requested during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as supplemented or amended) as each Underwriter may reasonably
request. The Company will comply to the best of its ability with the 1933
Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and in the
Prospectus. If the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the Prospectus
or any Term Sheet in connection with the offering or sale of the Shares and
if at such time any events shall have occurred as a result of which the
Prospectus or any Term Sheet as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus or any Term
Sheet is delivered, not misleading, or, if for any reason it shall be
necessary during such same period to amend or supplement the Prospectus or
any Term Sheet in order to comply with the 1933 Act or the rules and
regulations thereunder, the Company will notify you and upon your request
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably request
of an amended Prospectus or any Term Sheet or a supplement to the
Prospectus or any Term Sheet or an amendment or supplement to any such
incorporated document which will correct such statement or omission or
effect such compliance, and in case any Underwriter is required to deliver
a prospectus in connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectus or any Term Sheet,
upon your request but at the expense of such Underwriter, the Company will
prepare and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus or any Term Sheet complying with
Section 10(a)(3) of the 1933 Act.
(e) The Company will use its best efforts to qualify the Shares for
offering and sale under the applicable securities laws of such states and
other jurisdictions as you may
14
designate and to maintain such qualifications in effect for as long as may
be necessary to complete the distribution of the Shares; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to make any undertakings in
respect of doing business in any jurisdiction in which it is not otherwise
so subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Shares have been
qualified as above provided.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than the end of
the fiscal quarter first occurring after the first anniversary of the
"effective date of the Registration Statement" (as defined in Rule 158(c)
of the 1933 Act Regulations), an earnings statement (in reasonable detail
but which need not be audited) complying with the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder.
(g) During a period of five years after the date hereof, the
Company will furnish to you: (i) concurrently with furnishing to its
securityholders, copies of any statements of operations of the Company for
each of the first three quarters furnished to the Company's
securityholders; (ii) concurrently with furnishing to its securityholders,
a balance sheet of the Company as of the end of such fiscal year, together
with statements of operations, of cash flows and of securityholders' equity
of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent public accountants; (iii) as
soon as they are available, copies of all reports (financial or otherwise)
mailed to securityholders; (iv) as soon as they are available, copies of
all reports and financial statements furnished to or filed with the
Commission, any securities exchange or the National Association of
Securities Dealers, Inc. (the "NASD"); (v) every material press release in
respect of the Company or its affairs which is released by the Company; and
(vi) any additional information of a public nature concerning the Company
or its business that you may reasonably request. During such five-year
period, the foregoing financial statements shall be on a consolidated basis
to the extent that the accounts of the Company are consolidated with any
subsidiaries, and shall be accompanied by similar financial statements for
any significant subsidiary that is not so consolidated.
(h) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, the
Company will not, without the prior written consent of Xxxxxx Xxxxxx &
Company, Inc., offer, pledge, issue, sell, contract to sell, grant any
option for the sale of, or otherwise dispose of, or announce any offer,
pledge, sale, grant of any option to purchase or other disposition of,
directly or indirectly, any shares of Common Stock or securities
convertible into, exercisable for or exchangeable for shares of Common
Stock, except as provided in Section 3 of this Agreement, pursuant to the
Company's Long-Term Incentive Plan or in connection with acquisitions of
businesses or assets by the Company.
15
(i) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar (which
may be the same entity as the transfer agent) for its Common Stock.
(j) The Company will cause the Shares to be listed, subject to
notice of issuance, on the Nasdaq Stock Market and will use commercially
reasonable best efforts to maintain the listing of the Shares on the Nasdaq
Stock Market.
(k) The Company is familiar with the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, and has in the
past conducted its affairs, and will in the future conduct its affairs, in
such a manner so as to ensure that the Company was not and will not be an
"investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(l) The Company will not, and will use its best efforts to cause
its officers, directors and affiliates not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate contemplated
by this Agreement, any action designed to stabilize or manipulate the price
of any security of the Company, or which may cause or result in, or which
might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company,
to facilitate the sale or resale of any of the Shares, (ii) sell, bid for,
purchase or pay anyone any compensation for soliciting purchases of the
Shares or (iii) pay or agree to pay to any person any compensation for
soliciting any order to purchase any other securities of the Company.
(m) If at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus) and after
written notice from you advising the Company to the effect set forth above,
the Company agrees to consult with you concerning the substance and
dissemination of a press release or other public statement responding to or
commenting on such rumor, publication or event.
Section 5. Covenants of the Selling Shareholders. Each of the Selling
Shareholders covenants and agrees with each of the Underwriters:
(a) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, the
Selling Shareholder will not, without the prior written consent of Xxxxxx
Xxxxxx & Company, Inc., offer, pledge, issue, sell, contract to sell, grant
any option for the sale of, or otherwise dispose of, (or announce any
offer, pledge, sale, grant of an option to purchase or other disposition,
directly or indirectly) any shares of Common Stock or securities
convertible into, exercisable or exchangeable for, shares of Common Stock,
except as provided in Section 3 of this Agreement.
16
(b) The Selling Shareholder will not (i) take, directly or
indirectly, prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to cause or to result
in, or that might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Shares, (ii) sell, bid for, purchase or
pay anyone any compensation for soliciting purchases of, the Shares or
(iii) pay to or agree to pay any person any compensation for soliciting
another to purchase any other securities of the Company.
Section 6. Payment of Expenses. The Company will pay and bear all costs,
fees and expenses incident to the performance of its and the Selling
Shareholders' obligations under this Agreement (excluding fees and expenses of
counsel for the Underwriters, except as specifically set forth below), including
(a) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally filed and as
amended, the Preliminary Prospectuses, the Prospectus and any Term Sheet and any
amendments or supplements thereto, and the cost of furnishing copies thereof to
the Underwriters, (b) the preparation, printing and distribution of this
Agreement, the certificates representing the Shares, the memoranda relating to
compliance with state securities laws ("Blue Sky Memoranda") and any instruments
relating to any of the foregoing, (c) the issuance and delivery of the Shares to
the Underwriters, including any transfer taxes payable upon the sale of the
Shares to the Underwriters (other than transfer taxes on resales by the
Underwriters), (d) the fees and disbursements of the Company's and the Selling
Shareholders' counsel and accountants, (e) the qualification of the Shares under
the applicable state securities laws in accordance with the terms of this
Agreement, including filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Memoranda, (f) all costs, fees and expenses in connection with the
notification to the Nasdaq Stock Market of the proposed issuance of the Shares,
(g) filing fees relating to the review of the offering by the NASD, (h) the
transfer agent's and registrar's fees and all miscellaneous expenses referred to
in Part II of the Registration Statement, (i) costs related to travel and
lodging incurred by the Selling Shareholders, the Company and its
representatives relating to meetings with and presentations to prospective
purchasers of the Shares reasonably determined by the Underwriters to be
necessary or desirable to effect the sale of the Shares to the public, and (j)
all other costs and expenses incident to the performance of the Selling
Shareholders' and the Company's obligations hereunder (including costs incurred
in closing the purchase of the Option Shares, if any) that are not otherwise
specifically provided for in this section. The Company, upon your request, will
provide funds in advance for filing fees in connection with "blue sky"
qualifications.
If the sale of the Shares provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth in Section 7
hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the
Company or the Selling Shareholders to perform any agreement herein or comply
with any provision hereof other than by reason of default by any of the
Underwriters, the Company will reimburse the Underwriters severally on demand
for all reasonable out-of-pocket expenses, including
17
fees and disbursements of Underwriters' counsel, reasonably incurred by the
Underwriters in reviewing the Registration Statement and the Prospectus, and in
investigating and making preparations for the marketing of the Shares.
Section 7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for (i) the Firm Shares that they have
respectively agreed to purchase pursuant to this Agreement (and any Option
Shares as to which the option granted in Section 3 has been exercised and the
Date of Delivery determined by you is the same as the Closing Time) at the
Closing Time and (ii) the Option Shares at the Date of Delivery of the Option
Shares, are subject to the accuracy of the representations and warranties of the
Company and the Selling Shareholders contained herein as of the Closing Time or
the Date of Delivery, as the case may be, and to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in certificates of any officer of the Company and the Selling
Shareholders delivered pursuant to the provisions hereof, to the performance by
the Company and the Selling Shareholders of their obligations hereunder, and to
the following further conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 p.m. on the date of this Agreement or, with your consent,
at a later time and date not later, however, than 5:30 p.m. on the first
business day following the date hereof, or at such later time or on such
later date as you may agree to in writing; if the Company has elected to
rely upon Rule 462(b), the 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement or any 462(b) Registration
Statement shall have been issued under the 1933 Act and no proceedings for
that purpose shall have been instituted or shall be pending or, to your
knowledge or the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the satisfaction of counsel
for the Underwriters. If the Company has elected to rely upon Rule 430A, a
Prospectus or a Term Sheet containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a favorable
opinion of Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P.,
counsel for the Company, dated as of the Closing Time, together with signed
or reproduced copies of such opinion for each of the other Underwriters, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Louisiana with the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the
18
Registration Statement and the Prospectus. The Company is qualified
to transact business as a foreign corporation and is in good
standing in each of the jurisdictions in which the ownership or
leasing of the Company's properties or the nature or conduct of its
business requires such qualification, except where the failure to do
so would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(ii) Each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the state of its incorporation. Each such entity has all
requisite corporate power and authority to own, lease and operate
its properties and conduct its business as described in the
Registration Statement and the Prospectus. Each such entity is duly
qualified to do business and is in good standing as a foreign
corporation in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business
requires such qualification, except where the failure to do so would
not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole.
(iii) The Company has the corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery
by the Underwriters, constitutes a valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights
or by general principles of equity whether considered at law or in
equity, except to the extent that enforcement of the indemnification
provisions set forth in Section 8 of this Agreement may be limited
by federal or state securities laws or the public policy underlying
such laws and except that no opinion need be expressed as to the
effect of the first sentence of Section 15 of this Agreement as to
the laws of the State of Tennessee.
(iv) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with
any governmental agency or body necessary for the execution,
delivery and performance of this Agreement has been made or obtained
and
19
is in full force and effect, except such as may be necessary under
state securities laws or required by the NASD in connection with the
purchase and distribution of the Shares by the Underwriters, as to
which such counsel need express no opinion.
(v) The execution, delivery and performance of this
Agreement by the Company will not conflict with or result in a
breach or violation of any of the terms and provisions of, or (with
or without the giving notice or the passage of time or both)
constitute a default under, the charter or by-laws of the Company or
the Subsidiaries, respectively, or, to such counsel's knowledge
after due inquiry, under any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to
which the Company or the Subsidiaries, respectively, is a party or
to which the Company or the Subsidiaries, respectively, any of their
respective properties or other assets, is subject; or, to such
counsel's knowledge, any applicable statute, judgment, decree,
order, rule or regulation of any court or governmental agency or
body; or to such counsel's knowledge, result in the creation or
imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or the Subsidiaries, respectively.
(vi) The Common Stock conforms in all material respects as to
legal matters to the description thereof contained in the
Registration Statement and the Prospectus under the heading
"Description of Capital Stock."
(vii) To such counsel's knowledge, no preemptive rights of
shareholders exist with respect to any of the Shares which have not
been satisfied or waived. To such counsel's knowledge, no person or
entity holds a right to require or participate in the registration
under the 1933 Act of the Shares pursuant to the Registration
Statement which has not been satisfied or waived and, except as set
forth in the Prospectus, no person holds a right to require
registration under the 1933 Act of any shares of Common Stock of the
Company at any other time which has not been satisfied or waived.
The form of certificates evidencing the Shares complies with all
applicable requirements of Louisiana law.
(viii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization." All of
the issued shares of capital stock of the Company, including the
Shares, have been duly authorized and validly issued, are fully paid
and nonassessable. None of the issued shares of capital stock of the
20
Company has been issued or is owned or held in violation of any
preemptive rights of shareholders.
(ix) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, to such counsel's knowledge after due
inquiry, are owned directly, or indirectly through another
Subsidiary, by the Company free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature
whatsoever except security interests disclosed in the Prospectus.
To such counsel's knowledge after due inquiry, other than the
Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association.
(x) Except as disclosed in the Prospectus, to such counsel's
knowledge after due inquiry, there are no outstanding (i) securities
or obligations of the Company or any of its Subsidiaries convertible
into or exchangeable for any capital stock of the Company or any
such Subsidiary, (ii) warrants, rights or options to subscribe for
or purchase from the Company or any such Subsidiary any such capital
stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such
Subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligation, or any such
warrants, rights or options.
(xi) Neither the Company nor its Subsidiaries is in violation
of their respective charter or by-laws, and, to such counsel's
knowledge after due inquiry, no material default exists, and no
event has occurred nor state of facts exist which, with notice or
after the lapse of time to cure or both, would constitute a material
default in the due performance and observance of any obligation,
agreement, term, covenant, or condition contained in any indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any such entity is a party or to
which any such entity or any of its properties is subject.
(xii) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation
against the Company, the Subsidiaries or any of their respective
officers and directors or to which the properties, assets or rights
of any such entity
21
are subject, before or brought by any court or governmental agency
or body or board of arbitrators, that is required to be described in
the Registration Statement or the Prospectus but is not described as
required.
(xiii) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to be
shown and there are no contracts, leases or other documents known to
such counsel of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement which are not described or filed as
required.
(xiv) The Common Stock has been approved for trading on the
Nasdaq Stock Market .
(xv) The Registration Statement and any 462(b) Registration
Statement have become effective under the 1933 Act and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any 462(b)
Registration Statement has been issued and no proceeding for that
purpose has been instituted or is pending or contemplated under the
1933 Act. Other than financial statements and other financial and
operating data and schedules contained therein, as to which counsel
need express no opinion, the Registration Statement, any 462(b)
Registration Statement, all Preliminary Prospectuses, the Prospectus
and any amendment or supplement thereto, appear on their face to
conform as to form in all material respects with the requirements of
the 1933 Act and the rules and regulations thereunder.
(xvi) The Company is not, or solely as a result of the
consummation of the transactions contemplated hereby will not
become, an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company
Act of 1940, as amended.
(xvii) The descriptions in the Prospectus of statutes,
regulations, legal or governmental proceedings are accurate and
present fairly a summary of the information required to be shown
under the 1933 Act and the 1933 Act Regulations. The information in
the Prospectus under the caption "Shares Available for Future Sale"
to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel, is correct and
presents fairly the information required
22
to be disclosed therein under the 1933 Act and the 1933 Act
Regulations.
Such counsel also shall state that they have no reason to believe
that the Registration Statement, any 462(b) Registration Statement or
any further amendment thereto made prior to the Closing Time or the Date
of Delivery, as the case may be, on its effective date and as of the
Closing Time or the Date of Delivery, as the case may be, contained or
contains any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, or
any amendment or supplement thereto made prior to the Closing Time or
the Date of Delivery, as the case may be, as of its issue date and as of
the Closing Time or the Date of Delivery, as the case may be, contained
or contains any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that such counsel need express no belief regarding
the financial statements and related schedules and other financial data
contained in the Registration Statement, any 462(b) Registration
Statement, any amendment thereto, or the Prospectus, or any amendment or
supplement thereto).
(c) You shall have received an opinion, dated such Time of Delivery,
of Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., counsel
for the Selling Shareholders, in form and substance satisfactory to you and
your counsel, to the effect that:
(i) The Power of Attorney and the Custody Agreement have been
duly executed and delivered by each Selling Shareholder,
and each is enforceable against each Selling Shareholder
in accordance with its terms subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws relating to or affecting
the enforcement of creditors' rights generally and to
general equitable principles.
(ii) This Agreement has been duly executed and delivered by or
on behalf of each Selling Shareholder; the sale of the
Shares to be sold by each Selling Shareholder at such Time
of Delivery and the performance of this Agreement, the
Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or (with or without
the giving of notice or the passage of time or both)
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which each Selling
Shareholder is a party or to which any of its properties
or assets is subject, nor will such
23
action conflict with or violate any statute, rule or
regulation or any order, judgment or decree of any court
or governmental agency or body having jurisdiction over
such Selling Shareholder or any of such Selling
Shareholder's properties or assets.
(iii) No consent, approval, authorization, order or declaration
of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for
the issue and sale of the Shares being sold by such
Selling Shareholder or the consummation of the
transactions contemplated by this Agreement, the Power of
Attorney or the Custody Agreement, except the registration
of such Shares under the Act and such as may be required
under state securities or blue sky laws in connection with
the offer, sale and distribution of such Shares by the
Underwriters.
(iv) Such Selling Shareholder has, and immediately prior to
such Closing Time such Selling Shareholder will have, good
and valid title to the Shares to be sold by such Selling
Shareholder hereunder, free and clear of all liens,
security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities
or claims of any nature whatsoever; and, upon delivery of
such Shares against payment therefor as provided herein,
good and valid title to such Shares, free and clear of all
liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities
or claims of any nature whatsoever, will pass to the
several Underwriters.
In rendering the opinions set forth in Sections 7(b) and (c), such
counsel may rely on the following:
(A) as to matters involving the application of laws other
than the laws of the United States and jurisdictions in which
they are admitted, to the extent such counsel deems proper and to
the extent specified in such opinion, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel familiar with the applicable laws, and
(B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and
certificates or other written statements of officers or
departments of various jurisdictions having custody of documents
respecting the existence or good standing of the Company,
provided that copies of all such opinions, statements or
certificates shall be delivered to Underwriters'
24
counsel. The opinion of counsel for the Company shall state that
the opinion of any other counsel, or certificate or written
statement, on which such counsel is relying is in form
satisfactory to such counsel and their belief that you and they
are justified in relying thereon.
(d) At the Closing Time, you shall have received a favorable opinion
from Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated as of the
Closing Time, with respect to the incorporation of the Company, the
issuance and sale of the Shares, the Registration Statement, the Prospectus
and other related matters as the Underwriters may reasonably require, and
the Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass on such
matters.
(e) At the Closing Time, (i) the Registration Statement, any 462(b)
Registration Statement, and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations; the Company shall have complied in all material respects with
Rule 430A (if it shall have elected to rely thereon) and neither the
Registration Statement, any 462(b) Registration Statement, nor the
Prospectus, as they may then be amended or supplemented, shall contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement, any
material adverse change in the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of the Company,
whether or not arising in the ordinary course of business, (iii) no action,
suit or proceeding at law or in equity shall be pending or, to the best of
Company's knowledge, threatened against the Company that would be required
to be set forth in the Prospectus other than as set forth therein and no
proceedings shall be pending or, to the best knowledge of the Company,
threatened against the Company before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding could materially adversely affect the business,
prospects, assets, results of operations or condition (financial or
otherwise) of the Company, other than as set forth in the Prospectus, (iv)
the Company shall have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied pursuant to this
Agreement at or prior to the Closing Time, and (v) the representations and
warranties of the Company set forth in Section 1 shall be accurate as
though expressly made at and as of the Closing Time. At the Closing Time,
you shall have received a certificate executed by the President and Chief
Financial Officer of the Company dated as of the Closing Time, to such
effect and with respect to the following additional matters: (A) the
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of the Prospectus has been issued, and no
proceedings for that purpose have been instituted or are pending or, to the
best of their knowledge, threatened under the 1933 Act; and (B) they have
reviewed the Registration Statement and the Prospectus and, when the
25
Registration Statement and any 462(b) Registration Statement became
effective and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement, any 462(b) Registration Statement
and the Prospectus and any amendments or supplements thereto contained all
statements and information required to be included therein or necessary to
make the statements therein not misleading and neither the Registration
Statement, any 462(b) Registration Statement, nor the Prospectus nor any
amendment or supplement thereto included any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and, since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented Prospectus that has
not been so set forth. The representations and warranties of the Selling
Shareholders set forth herein shall be accurate as though expressly made at
and as of the Closing Time. At the closing time, you shall have received a
certificate executed on behalf of the Selling Shareholders to such effect.
(f) You shall have received from Price Waterhouse LLP letters dated,
respectively, the date hereof (or, if the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement,
dated such effective date and the date of this Agreement) and the Closing
Time and the Date of Delivery, in form and substance satisfactory to you, to
the effect set forth in Annex I hereto. In the event that the letters
referred to in this subsection set forth any changes, decreases or increases
in the items specified in paragraph (iii) of Annex I, it shall be a further
condition to the obligations of the Underwriters that (i) such letters shall
be accompanied by a written explanation by the Company as to the
significance thereof, unless the Underwriters deem such explanation
unnecessary, and (ii) such changes, decreases or increases do not, in your
sole judgment, make it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares as contemplated by the
Registration Statement, as amended as of the date of such letter.
(g) You shall have received from Ernst & Young LLP letters dated,
respectively, the date hereof (or, if the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement,
dated such effective date and the date of this Agreement) and the Closing
Time and the Date of Delivery, in form and substance satisfactory to you, to
the effect set forth in Annex II hereto. In the event that the letters
referred to in this subsection set forth any changes, decreases or increases
in the items specified in paragraph (iii) of Annex I, it shall be a further
condition to the obligations of the Underwriters that (i) such letters shall
be accompanied by a written explanation by the Company as to the
significance thereof, unless the Underwriters deem such explanation
unnecessary, and (ii) such changes, decreases or increases do not, in your
sole judgment, make it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares as contemplated by the
Registration Statement, as amended as of the date of such letter.
(h) At the Closing Time, you shall have received from Price Waterhouse
LLP a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (f) above,
26
except that the specified date referred to shall be a date not more than
five days prior to the Closing Time.
(i) At the Closing Time, you shall have received from Ernst & Young
LLP a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) above, except that the specified
date referred to shall be a date not more than five days prior to the
Closing Time.
(j) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
request for the purpose of enabling them to pass upon the sale of the Shares
as contemplated in this Agreement and the matters referred to in Section
7(d) and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company and the Selling
Shareholders, the performance of any of the covenants of the Company and the
Selling Shareholders, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company at or prior to the
Closing Time in connection with this Agreement shall be reasonably
satisfactory in form and substance to you and to counsel for the
Underwriters. The Company and the Selling Shareholders will furnish you with
such number of conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
(k) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(l) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change
in economic or political conditions the effect on the financial markets of
the United States is such as to make it, in your judgment, impracticable to
market the Shares or enforce contracts for the sale of the Shares, or (ii)
trading in any securities of the Company has been suspended by the
Commission or by the Nasdaq Stock Market, or if trading generally on the New
York Stock Exchange or in the over-the-counter market has been suspended, or
limitations on prices for trading (other than limitations on hours or
numbers of days of trading) have been fixed, or maximum ranges for prices
for securities have been required, by such exchange or the NASD or by order
of the Commission or any other governmental authority, or (iii) there has
been any downgrading in the rating of any of the Company's debt securities
or preferred stock by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the 1933 Act),
or (iv) a banking moratorium has been declared by federal or New York or
Tennessee authorities, or (v) any federal or state statute, regulation, rule
or order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which in your reasonable opinion
materially adversely affects or will materially adversely affect the
business or operations of the Company, or (vi) any action has been taken by
any federal, state or local
27
government or agency in respect of its monetary or fiscal affairs which in
your reasonable opinion has a material adverse effect on the securities
markets in the United States.
(m) Prior to the date of the execution of this Agreement, the Company
shall have furnished to the Representatives a letter substantially in the
form of Exhibit A hereto from each officer and director of the Company
(excluding the Selling Shareholders) and from each person who beneficially
owns five percent or more of the Company's outstanding Common Stock
(excluding the Selling Shareholders), addressed to the Representatives, in
which each such person agrees not to offer, pledge, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of, or announce any
offer, pledge, sale, grant of any option to purchase or other disposition
of, directly or indirectly, any shares of Common Stock beneficially owned by
such person or any securities convertible into, exercisable for or
exchangeable for shares of Common Stock for a period of 180 days after the
date of the Prospectus without the prior written consent of Xxxxxx Xxxxxx &
Company, Inc.; provided, however, that the foregoing restrictions shall not
apply to any gift of Common Stock to a donee who agrees in writing for the
benefit of the Underwriters to be bound by the foregoing restrictions with
respect to such shares of Common Stock.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by you on notice to the Company and the Selling Shareholders
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party, except as provided in Section
6. Notwithstanding any such termination, the provisions of Section 8 shall
remain in effect.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery for
Option Shares of the conditions set forth in this Section 7, except that, if any
Date of Delivery for Option Shares is other than the Closing Time, the
certificates, opinions and letters referred to in paragraphs (b), (c) and (d)
shall be revised to reflect the sale of Option Shares.
Section 8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject under the 1933 Act, or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in (A) any Preliminary
Prospectus, the Registration Statement, any 462(b) Registration Statement or
the Prospectus, or any amendment or supplement thereto, or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the
Shares under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"), or (ii) arise
28
out of or are based upon the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, the Registration Statement, any 462(b)
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter expressly for use therein. The
Company will also indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint and several, to which such
Underwriter may become subject insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any breach of any warranty or covenant of the Company contained herein. In
addition to its other obligations under this Section 8(a), the Company
agrees that, as an interim measure during the pendency of any such claim,
action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any alleged statement or omission,
described in this Section 8(a), it will reimburse the Underwriters on a
monthly basis for all reasonable legal and other expenses incurred by the
Underwriters in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability
of the obligations of the Company to reimburse the Underwriters for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction; provided, however, that
the obligation of the Company to make any such reimbursements shall be
subject to receipt from the Underwriters of an undertaking to return any
such reimbursements to the extent that is determined by a court of competent
jurisdiction or an arbitrator appointed in accordance with Section 8(e) that
such indemnification of the Underwriters by the Company is not permitted.
Any such interim reimbursement payments that are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the
prime rate (or reference rate or other commercial lending rate for borrowers
of the highest credit standing) published from time to time by The Wall
Street Journal (the "Prime Rate") from the date of such request. This
indemnity agreement shall be in addition to any liabilities that the Company
may otherwise have. The Company will not, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened action or claim or related cause of
action or portion of such cause of action in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is
a party to such action or claim), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all
liability arising out of such action or claim (or related cause of action or
portion thereof).
29
The indemnity agreement in this Section 8(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the 1933
Act to the same extent as such agreement applies to the Underwriters.
(b) Each Selling Shareholder, severally but not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject under the 1933 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (i) arise out
of or are based upon any breach of any warranty or covenant of such Selling
Shareholder herein contained (other than the warranty set forth in Section
2(g) hereof), (ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in (A) any Preliminary
Prospectus, the Registration Statement, any 462(b) Registration Statement or
the Prospectus, or any amendment or supplement thereto, or (B) any
Application, or (iii) arise out of or are based upon the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement,
any 462(b) Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any 462(b) Registration Statement or any amendment
or supplement thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application was made in reliance upon
and in conformity with written information furnished to the Company by such
Selling Shareholder expressly for use therein, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action. In addition to their other obligations
under this Section 8(b), each Selling Shareholder agrees that, as an interim
measure during the pendency of any such claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section
8(b), such Selling Shareholder will reimburse the Underwriters on a monthly
basis for all reasonable legal and other expenses incurred in connection
with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of such Selling
Shareholder's obligation to reimburse the Underwriters for such expenses and
the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction; provided, however, that the obligation
of the Selling Shareholders to make any such reimbursements shall be subject
to receipt from the Underwriters of an undertaking to return any such
reimbursements to the extent that is determined by a court of competent
jurisdiction or an arbitrator appointed in accordance with Section 8(e) that
such indemnification of the Underwriters by the Selling Shareholders is not
permitted. Any such interim reimbursement payments that are not made to an
Underwriter within 30 days of a request for reimbursement shall bear
interest at the prime rate (or reference rate or other commercial lending
rate for borrowers of the highest credit standing) published from time to
time by The Wall Street
30
Journal (the "Prime Rate") from the date of such request. This indemnity
agreement shall be in addition to any liabilities that such Selling
Shareholder may otherwise have. Such Selling Shareholder will not, without
the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened action or
claim or related cause of action or portion of such cause of action in
respect of which indemnification may be sought hereunder (whether or not
such Underwriter is a party to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter from all liability arising out of such action or claim (or
related cause of action or portion thereof).
The indemnity agreement in this Section 8(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the 1933
Act to the same extent as such agreement applies to the Underwriters.
(c) Each Underwriter, severally but not jointly, will indemnify and
hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company and such Selling
Shareholder may become subject, under the 1933 Act, or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any warranty or covenant by
such Underwriter herein contained or any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, any 462(b) Registration Statement or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter expressly for use therein; and will reimburse the Company and
each Selling Shareholder for any legal or other expenses reasonably incurred
by the Company and such Selling Shareholder in connection with investigating
or defending any such loss, claim, damage, liability or action. In addition
to its other obligations under this Section 8(c), the Underwriters agree
that, as an interim measure during the pendency of any such claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
this Section 8(c), they will reimburse the Company and each Selling
Shareholder on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability
of their obligation to reimburse the Company and each Selling Shareholder
for such expenses and the possibility that such payments might later be held
to have been improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company and each Selling
31
Shareholder within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities that the Underwriters may
otherwise have. No Underwriter will, without the prior written consent of
the Company and the Selling Shareholders, settle or compromise or consent to
the entry of judgment in any pending or threatened action or claim or
related cause of action or portion of such cause of action in respect of
which indemnification may be sought hereunder (whether or not the Company or
the Selling Shareholders are parties to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of the
Company and the Selling Shareholders from all liability arising out of such
action or claim (or related cause of action or portion thereof).
The indemnity agreement in this Section 8(c) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each
officer and director of the Company and each person, if any, who controls
the Company and each Selling Shareholder within the meaning of the 1933 Act
to the same extent as such agreement applies to the Company and the Selling
Shareholder.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; no indemnification provided for in
subsection (a), (b) or (c) shall be available to any party who shall fail to
give notice as provided in this subsection (d) if the party to whom notice
was not given was unaware of the proceeding to which such notice would have
related and was prejudiced by the failure to give such notice, but the
omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified
party otherwise than under Section 8. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party (which consent shall not be
unreasonably withheld), be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation, except
that if the indemnified party has been advised by counsel in writing that
there are one or more defenses available to the indemnified party which are
different from or additional to those available to the indemnifying party,
then the indemnified party shall have the right to employ separate counsel
and in that event the reasonable fees and expenses of such separate counsel
for the indemnified party shall be paid by the indemnifying party; provided,
however, that if the indemnifying party is the Company or a Selling
Shareholder, the indemnifying party shall only be obligated to pay the
reasonable fees and expenses of a single law firm (and any reasonably
necessary local counsel) employed by all of the indemnified parties. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final
32
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Section 8(a), (b) and
(c) hereof, including the amounts of any requested reimbursement payments,
the method of determining such amounts and the basis on which such amounts
shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted pursuant to the Code of Arbitration Procedure of the
National Association of Securities Dealers, Inc. Any such arbitration must
be commenced by service of a written demand for arbitration or a written
notice of intention to arbitrate, therein electing the arbitration tribunal.
In the event the party demanding arbitration does not make such designation
of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 8(a), (b) and (c) hereof and will not
resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses that is created by the provisions of Sections 8(a),
(b) and (c).
(f) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 8 is
for any reason judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the right of appeal) to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
incurred by the Company and the Selling Shareholders, and one or more of the
Underwriters, as incurred, in such proportions that (a) the Underwriters are
responsible pro rata for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price (before deducting expenses) appearing thereon, and
(b) the Company and the Selling Shareholders are responsible for the
balance, provided, however, that no person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the 0000 Xxx)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation; provided, further, that if the allocation
provided above is not permitted by applicable law, the Company and the
Selling Shareholders, on the one hand, and the Underwriters, on the other
hand, shall contribute to the aggregate losses in such proportion as is
appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company and the Selling Shareholders, on the
one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company or the Selling Shareholders, on the one hand, or by the
Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(f) were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such
33
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8(f). The
amount paid or payable by a party as a result of the losses, claims, damages
or liabilities referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending such action or claim. Notwithstanding the
provisions of this Section 8(f), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this Section 8(f) to contribute are several in proportion to
their respective underwriting obligations and not joint. For purposes of
this Section 8(f), each person, if any, who controls an Underwriter within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company or the Selling Shareholders, within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company or the Selling Shareholders.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers and the Selling Shareholders set forth
in or made pursuant to this Agreement (except for the representation and
warranty in Section 2(g) hereof) will remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Company, any
Selling Shareholder or any Underwriter or controlling person, and with respect
to an Underwriter or the Company and the Selling Shareholders will survive
delivery of and payment for the Shares or termination of this Agreement.
Section 10. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to
Sections 6 and 8 and, as to all other provisions, (i) if at the time of
execution of this Agreement the Registration Statement has not become
effective, at 9:30 a.m. New York, New York time on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at
the time of execution of this Agreement the Registration Statement has been
declared effective, at 9:30 a.m. New York, New York time on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by
notice to the Company and the Selling Shareholders or by release of any of
the Shares for sale to the public. For the purposes of this Section 10, the
Shares shall be deemed to have been so released upon the release of
publication of any newspaper advertisement relating to the Shares or upon
the release by you of telegrams (i) advising the Underwriters that the
Shares are released for public offering, or (ii) offering the Shares for
sale to securities dealers, whichever may occur first. By giving notice
before the time this Agreement becomes effective, you, as representatives of
the several Underwriters, may prevent this Agreement from becoming
effective, without liability of any party to any other party, except that
the Company shall
34
remain obligated to pay costs and expenses to the extent provided in Section
6 hereof and except that the provisions of Section 8 shall remain in effect.
(b) You may terminate this Agreement, by notice to the Company and
the Selling Shareholders, at any time at or prior to the Closing Time (i) in
accordance with the penultimate paragraph of Section 7 of this Agreement, or
(ii) if there has been since the respective dates as of which information is
given in the Registration Statement, any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the business, prospects, management, properties, assets, results of
operations or condition (financial or otherwise) of the Company, whether or
not arising in the ordinary course of business, or (iii) if there has
occurred or accelerated any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political
conditions the effect of which on the financial markets of the United States
is such as to make it, in your judgment, impracticable to market the Shares
or enforce contracts for the sale of the Shares, or (iv) if trading in any
securities of the Company has been suspended by the Commission or by the
Nasdaq Stock Market or if trading generally on the New York Stock Exchange
or in the over-the-counter market has been suspended, or limitations on
prices for trading (other than limitations on hours or numbers of days of
trading) have been fixed, or maximum ranges for prices for securities have
been required, by such exchange or the NASD or by order of the Commission or
any other governmental authority, or (v) if there has been any downgrading
in the rating of any of the Company's debt securities or preferred stock by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the 1933 Act), or (vi) if a banking moratorium
has been declared by federal or New York or Tennessee authorities, or (vii)
any federal or state statute, regulation, rule or order of any court or
other governmental authority has been enacted, published, decreed or
otherwise promulgated which in your reasonable opinion materially adversely
affects or will materially adversely affect the business or operations of
the Company, or (viii) any action has been taken by any federal, state or
local government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the
securities markets in the United States.
(c) If this Agreement is terminated pursuant to this Section 10,
such termination shall be without liability of any party to any other party,
except to the extent provided in Section 6. Notwithstanding any such
termination, the provisions of Section 8 shall remain in effect.
Section 11. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Shares that
it or they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 36 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 36-hour period, then:
35
(a) If the aggregate number of Firm Shares which are Defaulted
Securities does not exceed 10% of the aggregate number of Firm Shares to be
purchased pursuant to this Agreement, the non-defaulting Underwriters shall
be obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligation proportions bear to the
underwriting obligations of all non-defaulting Underwriters, and
(b) If the aggregate number of Firm Shares which are Defaulted
Securities exceeds 10% of the aggregate number of Firm Shares to be
purchased pursuant to this Agreement, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 11 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company or the Selling Shareholders shall have
the right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statement or supplements to the
Prospectus that may thereby be made necessary. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 11.
Section 12. Default by the Selling Shareholders. If the Selling
Shareholders shall fail at the Closing Time to sell and deliver the aggregate
number of Firm Shares that they are obligated to sell, then this Agreement shall
terminate without any liability on the part of any non-defaulting party, except
to the extent provided in Section 6 and except that the provisions of Section 8
shall remain in effect.
No action taken pursuant to this Section shall relieve the Selling
Shareholders from liability, if any, in respect to such default.
Section 13. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Xxxxxx Xxxxxx & Company, Inc.,
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx Xxxxxx (with a copy
sent in the same manner to Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxx); notices to the Company shall
be directed to it at 000 Xxxxxxxx Xxxx, Xxxxx, Xxxxxxxxx 00000, Attention: Xxxxx
X. Xxxxxxx (with a copy of each notice to the Company or to either Selling
Shareholder sent in the same manner to Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx, L.L.P., 000 Xx. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxxx); notices to Xxxxx X. Xxxxxxx shall be directed to
him at 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000; and notices to Xxxx X.
Xxxxxx shall be directed to him at Xxxx Xxxxxx Interests, 0000 X. Xxxxxxxx
Xxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxx 00000.
36
Section 14. Parties. This Agreement is made solely for the benefit of
and is binding upon the Underwriters, the Selling Shareholders and the Company
and, to the extent provided in Section 8, any person controlling the Company and
the Selling Shareholders or any of the Underwriters, the officers and directors
of the Company, and their respective executors, administrators, successors and
assigns. Subject to the provisions of Section 8, no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include any purchaser, as such purchaser, from any of the
several Underwriters of the Shares.
All of the obligations of the Underwriters hereunder are several and not
joint.
Section 15. Governing Law and Time. This Agreement shall be governed by
the laws of the State of Tennessee. Specified time of the day refers to United
States Eastern Time. Time shall be of the essence of this Agreement.
Section 16. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
37
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by Xxxxxx Xxxxxx & Company, Inc., on behalf of each of the Underwriters,
this instrument will become a binding agreement among the Company, the Selling
Shareholders and the several Underwriters in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in the Master Agreement
Among Underwriters, a copy of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
GULF ISLAND FABRICATION, INC.
By:_____________________________
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
________________________________
Xxxxx X. Xxxxxxx
________________________________
Xxxx X. Xxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above:
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX RICE & COMPANY L.L.C.
By: Xxxxxx Xxxxxx & Company, Inc.
By:_____________________________
(Authorized Representative)
On behalf of each of the Underwriters
38
SCHEDULE A
Number of
Firm Shares
to be Purchased
---------------
Underwriter
-----------
Xxxxxx Xxxxxx & Company, Inc. ........................
Xxxxxxx Xxxxx & Associates, Inc. .....................
Xxxxxxx Rice & Company L.L.C. ........................
---------
TOTAL ................................................ 2,000,000
=========
39
SCHEDULE B
SELLING SHAREHOLDERS
Number of
Firm Shares
to be Sold
-----------
Name
----
Xxxxx X. Xxxxxxx. ....................................
Xxxx X. Xxxxxx. ......................................
-----------
TOTAL ................................................ 2,000,000
===========
40
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, Price Waterhouse
LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent public accountants with respect to the
Company and its consolidated subsidiaries and with respect to Dolphin
Services within the meaning the 1933 Act and the applicable published rules
and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus, the Registration
Statement and any 462(b) Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the related published rules and regulations thereunder;
(iii) The financial statements of the Company as of and for the nine-
month period ended September 30, 1996 were reviewed by them in accordance
with the standards established by the American Institute of Certified
Public Accountants and based upon their review they are not aware of any
material modifications that should be made to such financial statements for
them to be in conformity with generally accepted accounting principles, and
such financial statements comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the applicable
rules and regulations thereunder;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
1933 Act and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior to the date
of such letter, there were any changes in the capital stock (other
than the issuance of capital
stock upon exercise of options which were outstanding on the date of
the latest balance sheet included in the Prospectus) or any increase
in inventories or the long-term debt or short-term debt of the Company
and its subsidiaries, or any decreases in net current assets or net
assets or other items specified by the Underwriters, or any increases
in any items specified by the Underwriters, in each case as compared
with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (B) there were any decreases in net sales or operating
income or the total or per share amounts of net income or other items
specified by the Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iv) above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records of the
Company and its subsidiaries, included in the Registration Statement and
the Prospectus, or which appear in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Underwriters, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
(vi) On the basis of a reading of the unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement and the Prospectus, carrying out certain specified procedures
that would not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (vi), inquiries of certain
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma consolidated condensed
financial statements, nothing came to their attention that caused them to
believe that the unaudited pro forma consolidated condensed financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Registration Statement and the Prospectus in this
Annex I shall include any amendment or supplement thereto at the date of
such letter.
2
ANNEX II
Pursuant to Section 7(g) of the Underwriting Agreement, Ernst & Young LLP
shall furnish letters to the Underwriters to the effect that:
(i) They are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning the 1933 Act
and the applicable published rules and regulations thereunder;
(ii) The financial statements of the Company as of and for the nine-
month period ended September 30, 1997 were reviewed by them in accordance
with the standards established by the American Institute of Certified
Public Accountants and based upon their review they are not aware of any
material modifications that should be made to such financial statements for
them to be in conformity with generally accepted accounting principles, and
such financial statements comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the applicable
rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
1933 Act and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior to the date
of such letter, there were any changes in the capital stock (other
than the issuance of capital stock upon exercise of options which were
outstanding on the date of the latest balance sheet included in the
Prospectus) or any increase in inventories or the long-term debt or
short-term debt of the Company and its subsidiaries, or any decreases
in net current assets or net assets or other items specified by the
Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each
1
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (B) there were any decreases in net sales or operating
income or the total or per share amounts of net income or other items
specified by the Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur which are described in such letter; and
(iv) In addition to the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraph (iii) above,
they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified
by the Underwriters which are derived from the general accounting records
of the Company and its subsidiaries, included in the Registration Statement
and the Prospectus, or which appear in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Underwriters, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
References to the Registration Statement and the Prospectus in this
Annex II shall include any amendment or supplement thereto at the date of
such letter.
2
