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EXHIBIT 1.1
OYO GEOSPACE CORPORATION
2,000,000 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
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UNDERWRITING AGREEMENT
November __, 1997.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ REFSNES, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
OYO Geospace Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 1,000,000 shares of the Company's common stock, par value $0.01 per share
(the "Common Stock") and, at the election of the Underwriters, up to 150,000
additional shares of Common Stock, and OYO Corporation U.S.A., a Texas
corporation (the "Selling Stockholder"), proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of 1,000,000
shares of Common Stock and, at the election of the Underwriters, up to 150,000
additional shares of Common Stock. The aggregate of 2,000,000 shares of Common
Stock to be sold by the Company and the Selling Stockholder is herein called the
"Firm Shares" and the aggregate of 300,000 additional shares of Common Stock to
be sold by the Company and the Selling Stockholder is herein called the
"Optional Shares". The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares".
The Underwriters will reserve up to 300,000 shares of the Common Stock
(the "Directed Shares") from among the Firm Shares for offering and sale to
certain of the Company's officers, directors and employees and certain business
associates of the Company and the Selling Stockholder pursuant to a reserve
share program (the "Reserve Share Program"). The Directed Shares will be sold by
the Underwriters pursuant to this Agreement at the public offering price. Any
Directed Shares not purchased by such persons will be offered to the public by
the Underwriters as set forth in the Prospectus (as defined below).
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
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(i) A registration statement on Form S-1 (File No.
333-36727) as amended by Amendment No. 1 thereto, in respect
of the Shares has been filed with the United States Securities
and Exchange Commission (the "Commission"); such registration
statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; no other
document with respect to such registration statement has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of
1933, as amended (the "Securities Act"), is hereinafter called
a "Preliminary Prospectus"); the various parts of such
registration statement, including all exhibits thereto and
including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Securities
Act to be part of the registration statement at the time it
was declared effective, each as amended at the time such part
of the registration statement became effective, are
hereinafter collectively called the "Registration Statement";
and such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Securities Act, is hereinafter called
the "Prospectus"; if the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then
reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462 Registration Statement;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter through ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Refsnes, Inc. expressly for use therein;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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; 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 through ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc. expressly
for use therein;
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(iv) Each of the Printhead Purchase Agreement and the
Master Sales Agreement, in each case as defined in the
Registration Statement (such agreements referred to herein
collectively as the "Intercompany Agreements"), has been duly
authorized, executed and delivered by the Company and
constitutes the valid and legally binding agreement of the
Company enforceable against the Company in accordance with its
terms, except that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and may be subject to general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(v) The only significant subsidiaries (as defined in
the rules and regulations of the Commission under the
Securities Act, referred to hereinafter as the "Securities Act
Regulations") of the Company are the subsidiaries listed on
Exhibit 21.1 to the Registration Statement (collectively, the
"Subsidiaries"). Each of the Subsidiaries is a corporation
duly organized and validly existing in good standing in the
jurisdiction of its incorporation with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature or location of its
properties (owned or leased) or the conduct of its business
requires such registration or qualification, except where the
failure so to register or qualify could not have a Material
Adverse Effect (as defined below);
(vi) Neither the Company nor any of the Subsidiaries
has sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any
organized labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the
Prospectus, which has had or is likely to have a Material
Adverse Effect; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock
or any increase in long-term debt of the Company and the
Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, prospects,
current or future consolidated financial position,
stockholders' equity or results of operations of the Company
and the Subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(vii) Except as described in the Prospectus, the
Company has good and indefeasible title to all material real
property and good and marketable title to all other material
properties and assets described in the Prospectus as owned by
the Company and valid, subsisting and enforceable leases for
all of the properties and assets, real or personal, described
in the Prospectus as leased by them, in each case free and
clear of any security interest, mortgages, pledges, liens,
encumbrances or charges of any kind, other than those
described in the Prospectus and those that could not,
individually or in the aggregate, have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company (such an adverse effect to be hereinafter referred to
as a "Material Adverse Effect");
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(viii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is
subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction;
(ix) The Company has the authorized capitalization
set forth in the Prospectus under the heading "Description of
Capital Stock", and all of the issued shares of Common Stock
of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
description of the Common Stock contained in the Prospectus
under the heading "Description of Capital Stock"; and all of
the issued shares of capital stock of each of the Subsidiaries
have been duly and validly authorized and issued, are fully
paid and non-assessable and (except as set forth in the
Prospectus) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to
acquire the Shares which have not been complied with; except
as set forth in the Prospectus, there are no outstanding
securities convertible into or exchangeable for, or warrants,
rights or options to purchase from the Company, or obligations
of the Company to issue, shares of Common Stock or any other
class of capital stock of the Company; and, except as set
forth in the Prospectus, there are no restrictions on
subsequent transfers of the Shares under the laws of the
United States (other than sales of Shares owned by the Company
and its affiliates);
(x) The Shares have been duly and validly authorized
and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully
paid and non-assessable and will conform to the description of
the Shares contained in the Prospectus under the heading
"Description of Capital Stock";
(xi) This Agreement has been duly authorized,
executed, and delivered by the Company;
(xii) The issue and sale of the Shares to be sold by
the Company hereunder, the compliance by the Company with all
of the provisions of this Agreement and the consummation of
the transactions contemplated by this Agreement will not
conflict with or 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 or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of the property or
assets of the Company or any of the Subsidiaries is subject,
nor will such action result in any violation of the provisions
of the Restated Certificate of Incorporation and Restated
Bylaws of the Company, the charter documents of any of the
Subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body or any stock
exchange authorities (hereinafter "Governmental Agency")
having jurisdiction over the Company or any of the
Subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification
(hereinafter referred to as "Government Authorization") of or
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with any such Governmental Agency is required for the issue
and sale of the Shares or the consummation by the Company of
the transactions contemplated by this Agreement, except (A)
the registration under the Securities Act of the Shares, (B)
such Governmental Authorizations as have been duly obtained
and are in full force and effect and copies of which have been
furnished to you and (C) such Governmental Authorizations as
may be required under state securities or Blue Sky laws or the
Bylaws, rules and regulations of the National Association of
Securities Dealers, Inc.;
(xiii) The compliance by the Company with all the
provisions of the Intercompany Agreements and the consummation
of the transactions contemplated by the Intercompany
Agreements will not conflict with or 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 or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries is bound or to which any of
the property or assets of the Company or any of the
Subsidiaries is subject, nor will such action result in any
violation of the provisions of the Restated Certificate of
Incorporation or Restated Bylaws of the Company, the charter
documents of any of the Subsidiaries or any statute or any
order, rule or regulation of any Governmental Agency having
jurisdiction over the Company or any of the Subsidiaries or
any of their properties, except such Governmental
Authorizations as have been duly obtained and are in full
force and effect and copies of which have been furnished to
you;
(xiv) The Company and each of the Subsidiaries are
(i) in compliance with any and all applicable foreign,
federal, state, provincial and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval,
except as disclosed in the Prospectus and except where such
noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses
or approvals could not, singly or in the aggregate, have a
Material Adverse Effect;
(xv) Neither the Company nor any of the Subsidiaries
is in violation of its certificate of incorporation or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, government
contract, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be
bound;
(xvi) Neither the Company nor any of the Subsidiaries
has taken, directly or indirectly, any action which was
designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(xvii) The statements set forth in the Prospectus
under the caption "Description of Capital Stock," insofar as
they purport to constitute a summary of the terms of the
Common Stock, and under the captions "Management's Discussion
and Analysis of Financial Condition and Results of Operations
-- Liquidity and Capital Resources," "Management,"
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and "Relationship with OYO Japan and Related Transactions,"
insofar as they purport to describe the provisions of the
laws, agreements, contracts, indentures, leases or other
documents or instruments referred to therein, are accurate and
fair summaries of the material and relevant provisions
thereof;
(xviii) Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to
which the Company or any of the Subsidiaries is a party or of
which any property of the Company or any of the Subsidiaries
is the subject which, if determined adversely to the Company
or any of the Subsidiaries, could, singly or in the aggregate,
have a Material Adverse Effect; and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by
others;
(xix) The Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xx) Except as disclosed in the Prospectus, the
Company and each of the Subsidiaries owns or possesses, has
applied for or can acquire on reasonable terms, the patents,
patent rights, licenses, inventions, copyrights, knowhow
(including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "Patent and Proprietary Rights") presently
employed by it in connection with the business now operated by
it, except where the failure to apply for or acquire any such
Patent and Proprietary Rights would not, singly or in the
aggregate, result in a Material Adverse Effect, and neither
the Company nor any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Patent and Proprietary Rights, or of any facts which would
render any Patent and Proprietary Rights invalid or inadequate
to protect the interests of the Company therein, and which
infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, could have a Material Adverse
Effect;
(xxi) The Company and each of the Subsidiaries have
all licenses, franchises, permits, authorizations, approvals
and orders and other concessions (hereinafter referred to as
the "Licenses") of and from all Governmental Agencies that are
necessary to conduct their businesses as described in the
Prospectus; and neither the Company nor any of the
Subsidiaries is in violation of any License except where the
failure to have such Licenses or where such violations could
not, singly or in the aggregate, have a Material Adverse
Effect;
(xxii) Coopers & ▇▇▇▇▇▇▇ L.L.P., who have certified
certain financial statements of the Company and the
Subsidiaries, are independent public accountants as required
by the Securities Act and the rules and regulations of the
Commission thereunder;
(xxiii) The consolidated financial statements and
related notes and schedules included in the Registration
Statement, a Preliminary Prospectus or in the Prospectus
present fairly, in all material respects, the financial
position of the Company and the Subsidiaries, on the basis
stated in the Registration Statement, as of the respective
dates thereof and the results of operations and cash flows
of the Company and the Subsidiaries, for the respective
periods covered thereby,
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and have been prepared in conformity with United States
generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except
as otherwise disclosed in the Registration Statement,
Preliminary Prospectus or the Prospectus. The financial
information set forth under the heading "Selected Financial
Data" in the Registration Statement, a Preliminary Prospectus
or the Prospectus presents fairly, in all material respects,
the information shown therein and has been compiled on a basis
consistent with that of the audited financial statements of
the Company included therein. No other financial statements or
schedules of the Company and the Subsidiaries are required by
the Securities Act, the Exchange Act or the Securities Act
Regulations to be included in the Registration Statement,
Preliminary Prospectus or Prospectus;
(xxiv) Each of the Company and the Subsidiaries,
directly or indirectly, maintains insurance covering its
properties, operations, personnel and businesses; in the
Company's reasonable judgment, such insurance provides
coverage against such losses and risks as is adequate in
accordance with customary industry practice to protect the
Company and its businesses; neither the Company nor any of the
Subsidiaries has received notice from any insurer or agent of
such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such
insurance; all such insurance is outstanding and duly in
force;
(xxv) The Company, each of the Subsidiaries and the
Selling Stockholder is in compliance with the provisions of
applicable law, regulation, or order governing payments to
government officials, government employees, political parties,
and political party officials; neither the Company, any of the
Subsidiaries, nor the Selling Stockholder has, directly or
indirectly, made any payment or delivered any item of value to
or for the benefit of any governmental official, government
employee, political party, or political party official or
other party on their behalf, in violation of applicable law,
regulation or order of the United States;
(xxvi) No person has any right to the registration of
any security of the Company by reason of the filing of the
Registration Statement with the Commission or the consummation
of the transactions contemplated hereby that has not been
waived or lapsed;
(xxvii) As of the date of the Prospectus, neither the
Company nor any of the Subsidiaries is currently planning any
probable acquisitions for which disclosure of pro forma
financial information would be required by the Securities Act;
(xxviii) Neither the Company nor any of the
Subsidiaries is involved in any organized labor dispute, nor,
to the knowledge of the Company, is any such dispute
threatened;
(xxix) The Company and each of the Subsidiaries have
filed all foreign, federal, state and local tax returns that
are required to be filed or have obtained extensions thereof
and have paid all taxes shown on such returns and all
assessments received by them to the extent that the same have
become due.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
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(i) The Selling Stockholder is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Texas;
(ii) Each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the
requirements of the Securities Act and the rules and
regulations of the Commission thereunder, and did not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter through ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes,
Inc. expressly for use therein;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Securities Act
and the Securities Act Regulations and do not and will not, as
of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or
supplement thereto, 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, 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 through ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Refsnes, Inc. expressly for use therein;
(iv) All Governmental Authorizations required for the
sale and delivery of the Shares to be sold by the Selling
Stockholder hereunder and for the execution and delivery by
the Selling Stockholder of the Intercompany Agreements and
this Agreement, have been obtained, except (A) the
registration under the Securities Act of the Shares, (B) such
Governmental Authorizations as have been duly obtained and are
in full force and effect and copies of which have been
delivered to you and (C) such Governmental Authorizations as
may be required under state securities or Blue Sky laws or the
Bylaws, rules and regulations of the National Association of
Securities Dealers, Inc.; and the Selling Stockholder has full
corporate right, power and authority to sell, assign, transfer
and deliver the Shares to be sold by the Selling Stockholder
hereunder; and the Selling Stockholder has full corporate
right, power and authority to enter into the Intercompany
Agreements and this Agreement;
(v) No Government Authorization of or with any
Governmental Agency is required for the issue and sale of the
Shares, effecting the consummation by the Company and the
Selling Stockholder of the transactions contemplated by this
Agreement, except (A) the registration under the Securities
Act of the Shares, (B) such Governmental Authorizations as
have been duly obtained and are in full force and effect and
copies of which have been furnished to you and (C) such
Governmental Authorizations as may be required under state
securities or Blue Sky laws or the Bylaws, rules and
regulations of the National Association of Securities Dealers,
Inc.;
(vi) No Government Authorization of or with any
Governmental Agency is required for the consummation by the
Company, the Selling Stockholder and OYO Japan of the
transactions contemplated by the Intercompany Agreements,
except such Governmental
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Authorizations as have been duly obtained and are in full
force and effect and copies of which have been furnished to
you;
(vii) The execution and delivery of, and the
performance by the Selling Stockholder of its obligations
under, each of the Intercompany Agreements has been duly and
validly authorized by the Selling Stockholder; and the
Intercompany Agreements have been duly executed and delivered
by either the Selling Stockholder or OYO Japan, as the case
may be, and constitute the valid and legally binding agreement
of the Selling Stockholder or OYO Japan, as the case may be,
enforceable against the Selling Stockholder or OYO Japan, as
the case may be, in accordance with their terms, except
insofar as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and may be subject to general principles of
equity, regardless of whether such enforceability is
considered in a preceding in equity or at law;
(viii) The sale of the Shares to be sold by the
Selling Stockholder hereunder, the compliance by the Selling
Stockholder with all of the provisions of this Agreement and
the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Selling Stockholder
or any of its subsidiaries is a party or by which the Selling
Stockholder or any of its subsidiaries is bound, or to which
any of the property or assets of the Selling Stockholder or
any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Articles of
Incorporation and Bylaws or such similar charter documents of
the Selling Stockholder or any statute or any order, rule or
regulation of any Governmental Agency having jurisdiction over
the Selling Stockholder or any of its subsidiaries or any of
their property; and no Government Authorization of or with any
Governmental Agency is required for the sale of the Shares or
the consummation by the Selling Stockholder of the
transactions contemplated by this Agreement, except (A) the
registration under the Securities Act of the Shares, (B) such
Governmental Authorizations as have been duly obtained and are
in full force and effect and copies of which have been
furnished to you and (C) such Governmental Authorizations as
may be required under state securities or Blue Sky laws or the
Bylaws, rules and regulations of the National Association of
Securities Dealers, Inc.;
(ix) The compliance by the Selling Stockholder with
all of the provisions of the Intercompany Agreements and the
consummation of the transactions therein contemplated will not
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Selling Stockholder
or any of its subsidiaries is a party or by which the Selling
Stockholder or any of its subsidiaries is bound, or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation
and Bylaws or such similar charter documents of the Selling
Stockholder or any statute or any order, rule or regulation of
any Governmental Agency having jurisdiction over the Selling
Stockholder or any of its subsidiaries or any of their
property, except such Governmental Authorizations as have been
duly obtained and are in full force and effect and copies of
which have been furnished to you;
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(x) The Selling Stockholder has, and immediately
prior to each Time of Delivery (as defined in Section 4
hereof) the Selling Stockholder will have, good and valid
title to the Shares to be sold by the Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities
or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto and thereto, good and valid title to
such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters;
(xi) This Agreement has been duly authorized,
executed, and delivered by the Selling Stockholder;
(xii) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(xiii) Certificates in negotiable form representing
all of the Shares to be sold by the Selling Stockholder
hereunder have been prepared and will be delivered to you in
accordance with the instructions in accordance with Section 4
of this Agreement; and
(xiv) The Shares to be sold by the Selling
Stockholder are subject to the interests of the Underwriters
hereunder; the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law, whether
by dissolution, or by the occurrence of any other event; if
the Selling Stockholder should be dissolved, or if any other
such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be
delivered by or on behalf of the Selling Stockholder in
accordance with the terms and conditions of this Agreement.
2. Subject to the terms and conditions herein set forth, (a)
each of the Company and the Selling Stockholder agrees, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from each of the Company and the
Selling Stockholder, at a purchase price per Share of $............, the number
of Firm Shares as set forth opposite their respective names in Schedule I
hereto; provided, however, that the Company and the Selling Stockholder shall
not be obligated to sell any Shares unless all of the Firm Shares are purchased
by the Underwriters, and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as provided
below, each of the Company and the Selling Stockholder agrees, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the purchase
price per Share set forth in clause (a) of this Section 2, that portion of the
number of Optional Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of which
is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
Each of the Company and the Selling Stockholder, as and to the extent
indicated in Schedule I hereto, hereby grants to the Underwriters the right to
purchase at their election up to 150,000 Optional Shares each (300,000 Optional
Shares in the aggregate), at the purchase price per Share set forth in the
paragraph above, for the sole purpose of covering overallotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares shall be made pro
rata in proportion to the maximum number of Optional Shares to be sold
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by each of the Company and the Selling Stockholder as set forth in Schedule I
hereto. Any such election to purchase Optional Shares may be exercised only by
written notice from you to the Company and the Selling Stockholder, given within
a period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Company and the Selling Stockholder otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc. may request upon at least
forty-eight hours' notice to the Company and the Selling Stockholder
prior to Time of Delivery (as defined below) (the "Notification Time"),
shall be delivered by or on behalf of the Company and the Selling
Stockholder to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc., for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer payable to the order of the
Company or the Selling Stockholder, as the case may be, in immediately
available funds. The Company and the Selling Stockholder will cause the
certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery
(as defined blow) with respect thereto at the office of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Refsnes, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ or such other designated location (the "Designated Office").
The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., Central Standard Time, on
November__, 1997 or such other time and date as ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Refsnes, Inc. and the Company and the Selling Stockholder may agree
upon in writing, and, with respect to the Optional Shares, 9:30 a.m.,
Central Standard Time, on the date specified by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Refsnes, Inc. in the written notice given by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes,
Inc. of the Underwriters' election to purchase such Optional Shares, or
such other time and date as ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc. and the
Company and the Selling Stockholder may agree upon in writing. Such
time and date for delivery of the Firm Shares is herein called the
"First Time of Delivery", such time and date for delivery of the
Optional Shares, if not the First Time of Delivery, is herein called
the "Second Time of Delivery", and each such time and date for delivery
is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(k) hereof, will be
delivered at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"), and the Shares
will be delivered as specified in Section 4 above, all at such Time of
Delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
Central Standard Time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to
be delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 4, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to
close.
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5. The Company and, with respect to clauses (e) and (i) below, the
Selling Stockholder agree with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you (such
approval not to be unreasonably withheld or delayed) and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to advise you promptly of the necessity to
make, and to make further amendments or supplements to the Registration
Statement or Prospectus in such form as has been previously approved by
you (such approval not to be unreasonably withheld or delayed); to
advise you, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish you copies thereof; to file promptly all
reports required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Shares; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of the United States and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Shares but in no event more than nine months from
the date hereof provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as you may from time to time reasonably request,
and, 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
in connection with the offering or sale of the Shares by the
Underwriters and if at such time any events shall have occurred as a
result of which the Prospectus 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 the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify you
and upon your request to 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 a
supplement to the Prospectus 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 after nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many
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copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Securities Act), an earnings statement of the Company
and the Subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and
continuing to and including the date 120 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that
are substantially similar to the Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Stock or any such substantially
similar securities (other than pursuant to employee stock incentive
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement,
or in connection with the acquisition of any business or property so
long as the recipient of any Common Stock shall agree not to resell
such Common Stock during the 120 day period), without the prior written
consent of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc.;
(f) During a period of five years from the effective date of
the Registration Statement, to furnish to the Company's stockholders
such reports as are or may be prescribed by the Commission;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to Stockholders,
and to deliver to you as soon as they are available, copies of any
reports and financial statements of the Company furnished to or filed
with the Commission or any securities exchange on which any class of
securities of the Company is listed;
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) Not to (and to cause each of the Subsidiaries not to)
take, directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company or facilitate the sale or resale or the Shares; and
(j) To use its best efforts to list, subject to notice of
issuance, the Shares on the Nasdaq National Market.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid, to the extent not otherwise previously
paid by the Selling Stockholder, the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Securities Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Selling Agreements, the Blue Sky
Memorandum, closing documents (including compilations thereof) and any other
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documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the Nasdaq
National Market; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Shares; (vi) the fees and expenses of the Authorized Agent (as defined in
Section 15 hereof); (vii) the cost of preparing share certificates; (viii) the
cost and charges of any transfer agent or registrar; (ix) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; (x) any fees and expenses
of counsel for the Selling Stockholder, (xi) all expenses and taxes incident to
the sale and delivery of the Shares to be sold by the Selling Stockholder to the
Underwriters hereunder and (xii) an accountable expense allowance of $75,000 to
the Underwriters, which amount shall be payable upon, and only in the event of,
the issuance and sale by the Company to the Underwriters of the Firm Shares. It
is understood, however, that, except as specifically provided in this Section,
Sections 8 and 11, the Underwriters will pay all of their own costs and
expenses, including the fees and disbursements of their counsel, transfer taxes
on resale of any of the Shares by them, and any advertising expenses with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholder herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and the Selling
Stockholder shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act
and in accordance with Section 5(a) hereof; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated such Time
of Delivery, in form and substance satisfactory to you, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., counsel for the Company and
the Selling Stockholder, shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Each of the Company, the Subsidiaries and the
Selling Stockholder has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) Each of the Company, the Subsidiaries and the
Selling Stockholder has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any
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business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would
not result in a material adverse change in or affecting the
general affairs, management, prospects, current or future
consolidated financial position, stockholders' equity or
results of operations of the Company and the Subsidiaries,
taken as a whole, or the Selling Stockholder, as the case may
be;
(iii) This Agreement has been duly executed and
delivered by the Company and the Selling Stockholder;
(iv) All of the issued shares of capital stock of the
Company (including the Shares being delivered to the
Underwriters on the Closing Date or the Additional Closing
Date, as the case may be, against payment therefor in
accordance with the Agreement) have been duly authorized and
validly issued, are fully paid and nonassessable and have not
been issued in violation of or subject to any preemptive
rights arising under the Company's Restated Certificate of
Incorporation or Restated Bylaws or under the General
Corporation Law of the State of Delaware or, to the knowledge
of such counsel, similar rights that entitle or will entitle
any person to acquire any shares of Common Stock upon issuance
of such shares of capital stock by the Company;
(v) All offers and sales of the Company's capital
stock prior to the date hereof were made in compliance with or
were the subject of an available exemption from the
registration provisions of the Securities Act and all other
applicable federal laws or regulations or the General
Corporation Law of the State of Delaware, or any actions, in
respect of any such offers or sales are effectively barred by
effective waivers or statutes of limitation;
(vi) The execution, delivery and performance by the
Company and the Selling Stockholder of this Agreement and the
issuance and sale of the Shares being delivered at such Time
of Delivery to be sold by the Company and the Selling
Stockholder and to be delivered at such Time of Delivery does
not and will not conflict with or 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 or other material agreement or instrument known to
such counsel after due inquiry to which the Company, any of
the Subsidiaries or the Selling Stockholder is a party or by
which the Company, any of the Subsidiaries or the Selling
Stockholder is bound or to which any of the property or assets
of the Company, any of the Subsidiaries or the Selling
Stockholder is subject, nor will such action result in a
violation of any statute or any order, rule or regulation
(other than federal or state securities or Blue Sky laws, as
to which such counsel need not express any opinion with
respect to this paragraph) known to such counsel of any
Governmental Agency having jurisdiction over the Company, any
of the Subsidiaries or the Selling Stockholder or any of their
properties;
(vii) The execution, delivery and performance by the
Company of the Intercompany Agreements does not and will not
conflict with or 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 or other
material agreement or instrument known to such counsel after
due inquiry to which the Company, any of the Subsidiaries or
the Selling Stockholder is a party or by which the Company,
any of the Subsidiaries or the Selling Stockholder is bound or
to which any of the
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property or assets of the Company, any of the Subsidiaries or
the Selling Stockholder is subject;
(viii) No Governmental Authorization is required for
the issuance and sale of the Shares by the Company or the sale
of the Shares by the Selling Stockholder or the consummation
by the Company or the Selling Stockholder (or OYO Japan in the
case of the Intercompany Agreements) of the transactions
contemplated by the Intercompany Agreements and this
Agreement, except the registration under the Securities Act of
the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws or the Bylaws, rules and
regulations of the National Association of Securities Dealers,
Inc. in connection with the purchase and distribution of the
Shares by the Underwriters;
(ix) The authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus;
(x) The statements in the Prospectus under the
captions "Description of Capital Stock" and "Shares Eligible
for Future Sale," and in the Registration Statement in Items
14 and 15, insofar as such statements constitute a summary of
the terms of the Common Stock, legal matters or documents or
proceedings referred to therein, accurately present the
information called for with respect to such terms, legal
matters, documents or proceedings in all material respects;
(xi) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or
instruments described in the Registration Statement and the
Prospectus under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources," "Management," "Relationship
With OYO Japan and Related Transactions" and "Shares Eligible
for Future Sale" and such agreements, contracts, indentures,
leases or other documents or instruments are fairly summarized
or described therein in all material respects, and filed as
exhibits to the Registration Statement as required;
(xii) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, any of
the Subsidiaries or the Selling Stockholder is a party or of
which any property of the Company, any of the Subsidiaries or
the Selling Stockholder is the subject which, if determined
adversely to the Company, any of the Subsidiaries or the
Selling Stockholder would individually or in the aggregate
have a material adverse effect on the current or future
consolidated financial position, Stockholders' equity or
results of operations of the Company and the Subsidiaries,
taken as a whole, or the Selling Stockholder; and, to such
counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by
others;
(xiii) To the knowledge of such counsel, no holders
of securities of the Company have rights to the registration
thereof under the Registration Statement or, if any such
holders have such rights, such holders have waived such
rights;
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(xiv) Neither the Company nor the Selling Stockholder
is an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xv) The Selling Stockholder has full right, power
and authority to sell, assign, transfer and deliver such
Shares hereunder;
(xvi) Assuming that the Selling Stockholder acquired
its interest in the Shares in good faith and without notice of
any adverse claims, upon delivery of the Shares registered in
its name to the Underwriters in the State of Texas, the
Underwriters will acquire all of the Selling Stockholder's
rights in the Shares free of any adverse claims (within the
meaning of Section 8-302 of the Texas UCC).
(xvii) The Registration Statement has become
effective under the Securities Act, and, to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending under the Securities Act
(xviii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the
financial statements and related schedules , as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act
and the rules and regulations thereunder; such counsel may
state that because the primary purpose of their engagement was
not to establish or confirm factual matters or financial,
accounting or statistical matters and because of the wholly or
partially non-legal character of many of the statements
contained in the Registration Statement and the Prospectus,
such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus (except to the extent expressly set forth in
paragraphs (x) and (xi) above), and they have not
independently verified the accuracy, completeness or fairness
of such statements (except as aforesaid). Without limiting the
foregoing, such counsel may state that they assume no
responsibility for and have not independently verified the
accuracy, completeness or fairness of the financial statements
included in the Registration Statement and the Prospectus and
they have not examined the accounting or financial records
from which such statements and data are derived. Such counsel
may state that although certain portions of the Registration
Statement and the Prospectus have been included therein on the
authority of "experts" within the meaning of the Securities
Act, they are not experts with respect to any portion of the
Registration Statement or the Prospectus. However, such
counsel may state that they have participated in conferences
with officers, legal counsel and other representatives of the
Company, representatives of the independent accountants of the
Company, and with representatives of, and legal counsel for,
the Underwriters, at which the contents of the Registration
Statement and Prospectus and related matters were discussed.
Such counsel may state that they have also reviewed certain
corporate documents furnished to them by the Company. Based on
such participation and review (relying as to materiality to a
certain extent upon the officers and the other representatives
of the Company), and subject to the limitations described
above, such counsel may state that they advise the
Underwriters that no facts have come to their attention that
causes them to believe that the Registration Statement at the
time it became effective, contained an untrue statement of a
material fact or omitted to
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state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus, as of its date or as of the date hereof,
contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; and such counsel
may state that to their knowledge there are no contracts or
other documents of a character required to be filed as an
exhibit to the Registration Statement which are not filed as
required.
In rendering such opinion, such counsel may rely as to matters of fact
upon representations and warranties contained herein, and certificates of
officers of the Company and the Selling Stockholder, among other things, and may
state that they express no opinion as to the laws of any jurisdiction other than
federal law, the laws of the State of Texas and the General Corporation Law of
the State of Delaware;
(d) On the date of the Prospectus of a time prior to the
execution of this Agreement, at 9:30 a.m., Central Standard Time, on
the effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Coopers & ▇▇▇▇▇▇▇ L.L.P. shall have furnished to
you a letter or letters, dated the respective dates on delivery
thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto;
(e) (i) Neither the Company nor any of the Subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any organized labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or any
increase in long-term debt of the Company or any of the Subsidiaries,
taken as a whole, or any material adverse change, or any development
involving a probable prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Refsnes, Inc. so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(f) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, Nasdaq
National Market or any other nationally recognized exchange; (ii) a
suspension or material limitation in trading in the Company's
securities on the Nasdaq National Market; (iii) a general moratorium on
commercial banking activities in New York or Texas declared by the
relevant authorities; or (iv) the outbreak of hostilities involving the
United States, or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this
Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(g) The Shares to be sold by the Company and the Selling
Stockholder at such Time of Delivery shall have been duly approved for
inclusion on the Nasdaq National Market, subject to official notice of
issuance;
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(h) The Company and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling Stockholder,
respectively, in their respective capacities as such, satisfactory to
you as to the accuracy of the representations and warranties of the
Company and the Selling Stockholder, respectively, herein at and as of
such Time of Delivery, as to the performance by the Company and the
Selling Stockholder of all of their respective obligations hereunder to
be performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (g) of this Section, and as to such other
matters as you may reasonably request;
(i) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the executive officers and
directors of the Company, substantially to the effect set forth in
Subsection 5(e) hereof in form and substance satisfactory to you; and
(j) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transaction herein
contemplated, the Selling Stockholder will deliver to the Underwriters
prior to the first Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 or
Form W-8 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
8. (a) The Company and the Selling Stockholder, jointly and
severally, will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, 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, in the light of the circumstances under which they are made,
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 action or claim as such
expenses are incurred; provided, however, that the Company and the
Selling Stockholder 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 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 through ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Refsnes, Inc. expressly for use therein; provided, further, that the
liability of the Selling Stockholder pursuant to this subsection (a)
shall not exceed the product of the number of Shares sold by the
Selling Stockholder including any Optional Shares and the initial
public offering price of the Shares as set forth in the Prospectus.
(b) In connection with the Reserve Share Program, the Company
and the Selling Stockholder, jointly and severally, agree to indemnify
and hold harmless the Underwriters from and against any and all losses,
expenses and liabilities incurred by them as a result of the failure of
the designated employees or other persons to pay for and accept
delivery of Shares which, immediately following effectiveness of the
Registration Statement, were subject to a properly confirmed agreement
to purchase.
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(c) Each Underwriter will indemnify and hold harmless the
Company and the Selling Stockholder against any losses, claims, damages
or liabilities to which the Company or the Selling Stockholder may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the 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 in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc. expressly for use
therein; and will reimburse the Company and the Selling Stockholder for
any legal or other expenses reasonably incurred by the Company or the
Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(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 an indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. 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 (which
shall not, except with the consent of the indemnified party, 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 expenses of other
counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a), (b) or (c) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (d) above, then each indemnifying
party shall
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contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling
Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses)
received by the Company and the Selling Stockholder bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The
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 or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholder on the
one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (e), 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. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e)
to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder
under this Section 8 shall be in addition to any liability which the
Company and the Selling Stockholder may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act; and
the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company (including any person who,
with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any,
who controls the Company or the Selling Stockholder within the meaning
of the Securities Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares that it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another
party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then
the Company and the Selling Stockholder shall be entitled to a further
period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such
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Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Selling Stockholder
that you have so arranged for the purchase of such Shares, or the
Company and the Selling Stockholder notify you that they have so
arranged for the purchase of such Shares, you or the Company and the
Selling Stockholder shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements,
and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company and the Selling Stockholder as provided in
subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-tenth of the aggregate number of all of
the Shares to be purchased at such Time of Delivery, then the Company
and the Selling Stockholder shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company and the Selling Stockholder as provided in
subsection (a) above, the aggregate number of such Shares which remains
unpurchased exceeds one-tenth of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Company and
the Selling Stockholder shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of the Selling Stockholder to sell the
Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholder, except for the expenses to be borne by the Company and the
Selling Stockholder and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or the Selling Stockholder, or any officer or
director or controlling person of the Company, or any controlling person of the
Selling Stockholder, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the
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Selling Stockholder as provided herein, the Company and the Selling Stockholder
pro rata (based on the number of Shares to be sold by the Company and the
Selling Stockholder hereunder) will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company and the Selling Stockholder shall then be under no further
liability to any Underwriter in respect of the Shares not so delivered except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc. on behalf of you as the
representatives; and in all dealings with the Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of Selling Stockholder made or given by the
Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you in care of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc., ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate Desk;
if to the Selling Stockholder shall be delivered or sent by mail, telex or
facsimile transmission to the Selling Stockholder at OYO Corporation U.S.A.,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: President; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Stockholder by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, the Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding against the Company or the Selling Stockholder
brought by any Underwriter or by any person who controls any Underwriter arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in any Texas court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the jurisdiction of
such courts in any such suit, action or proceeding. Each of the Company and the
Selling Stockholder has appointed CT Corporation System as its authorized agent
(the "Authorized Agent") upon whom process may be served in any such action
arising out of or based on this Agreement or the transactions contemplated
hereby which may be instituted in any Texas court by any Underwriter or by any
person who controls any Underwriter, expressly consents to the jurisdiction of
any such court in respect of any such action, and waives any other requirements
of or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. Each of the Company and the Selling Stockholder represents
and warrants that the Authorized Agent has agreed to act as such agent for
service of process and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in
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full force and effect as aforesaid. Service of process upon the Authorized Agent
and written notice of such service to the Company and the Selling Stockholder,
as the case may be, shall be deemed, in every respect, effective service of
process upon the Company and the Selling Stockholder as the case may be.
15. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company and the Selling Stockholder, as
the case may be, will indemnify each Underwriter against any loss incurred by
such Underwriter as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the judgment
currency for the purpose of such judgment or order and (ii) the rate of exchange
at which an Underwriter is able to purchase United States dollars with the
amount of the judgment currency actually received by such Underwriter. The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and the Selling Stockholder and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us eight (8) counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the Selling Stockholder. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholder for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
OYO GEOSPACE CORPORATION ("COMPANY")
By: __________________________________________
Name:
Title:
OYO CORPORATION U.S.A. ("SELLING STOCKHOLDER")
By: __________________________________________
Name:
Title:
Accepted as of the date hereof at Dallas, Texas
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ REFSNES, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By: __________________________________________
(▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc.)
On behalf of each of the Underwriters
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SCHEDULE I
Number of Optional Shares
Total Number of Firm to be Purchased if Maximum
Shares to be Purchased Option-Exercised
------------------------------- ------------------------------
From the From the
From the Selling From the Selling
Company Shareholder Company Shareholder
--------------------------------------------------------------------
Underwriter
-----------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Refsnes, Inc.........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc......................
_________ __________ _________ __________
========= ========== ========= ==========
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ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and the Subsidiaries within the
meaning of the Securities Act and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the financial statements and
any supplementary financial information and schedules (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included in the Prospectus
or the Registration Statement comply as to form in all
material respects with the applicable accounting requirements
of the Securities Act and the related published rules and
regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the
American Institute of Certified Public Accountants of the
unaudited consolidated interim financial statements, selected
financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of
which have been separately furnished to the Representatives;
and on the basis of specified procedures including inquiries
of officials of the Company who have responsibility for
financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred
to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements
of the Securities Act and the related published rules and
regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act and the related published rules and regulations;
(iv) The unaudited selected financial information
with respect to the consolidated results of operations and
financial position of the Company for the five most recent
fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in
the audited consolidated financial statements for such five
fiscal years;
(v) They have reviewed the information in the
Prospectus under selected captions with the disclosure
requirements of Regulation S-K, carried out limited procedures
specified in such letter with respect to such information, and
compared such information with the accounting records of the
Company nothing came to their attention as a result of the
foregoing procedures that caused them to believe that this
information does not conform;
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(vi) On the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information referred
to below, a reading of the latest available interim financial
statements of the Company and the Subsidiaries, inspection of
the minute books of the Company and the Subsidiaries since the
date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and the
Subsidiaries responsible for financial and 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) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and the
Subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
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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
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination 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 paragraphs (iii) and (vi) above,
they have carried out certain specified procedures, not
constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the
Representatives, which are derived from the general accounting
records of the Company and the Subsidiaries, which appear in
the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting
records of the Company and the Subsidiaries and have found
them to be in agreement.
3
