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2,500,000
CARBO CERAMICS INC.
COMMON SHARES
UNDERWRITING AGREEMENT
May , 2000
▇▇▇▇▇▇ BROTHERS INC.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL,
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Certain stockholders of Carbo Ceramics Inc., a Delaware
corporation (the "Company"), named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate of 2,500,000 shares (the "Firm
Stock") of the Company's common stock, par value $0.01 per share (the "Common
Stock"). In addition, one of the Selling Stockholders proposes to grant to the
Underwriters named in Schedule 1 hereto (the "Underwriters") an option to
purchase up to an additional 375,000 shares of the Common Stock on the terms and
for the purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, and
amendments thereto, with respect to the Stock have (i) been
prepared by the Company in conformity with the requirements of
the Securities Act of 1933 (the "Securities Act") and the
rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities
Act. Copies of such registration statement, the amendments
thereto and the form of final prospectus included therein have
been delivered by the Company to you as the representatives
(the "Representatives") of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date
of the Effective Time
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of such registration statement; "Preliminary Prospectus" means
each prospectus included in any such registration statement,
or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by
the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Prospectus"
means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of
the Rules and Regulations; and "Registration Statement" means
the registration statement referred to in this Section 1(a),
as amended at its Effective Time, including all documents
incorporated by reference therein at such time and information
contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 6(a) hereof and deemed to be a part of
the Registration Statement as of the Effective Time of the
Registration Statement pursuant to paragraph (b) of Rule 430A
of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any documents to the extent incorporated
by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be, and any reference to
any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any
document filed under the Securities Exchange Act of 1934 (the
"Exchange Act") after the date of such Preliminary Prospectus
or Prospectus, as the case may be, to the extent incorporated
by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual
report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective
Time to the extent the same is incorporated by reference in
the Registration Statement. The Commission has not issued any
order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms (and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus, when they become
effective or are filed with the Commission, as the case may
be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and 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 any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none
of such documents, when so filed, contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and any further documents so
filed and incorporated by reference in the Prospectus, as the
case may be, when so filed, will conform in all material
respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations
thereunder and will
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not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to
own or hold its properties and to conduct the business in
which it is engaged.
(e) The Company has an authorized capitalization as
set forth in the Annual Report on Form 10-K for the year ended
December 31, 1999, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable.
(f) The shares of the Stock have been duly and
validly authorized and issued and are fully paid and
non-assessable.
(g) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby 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 is a party or by which the
Company is bound or to which any of the material properties or
assets of the Company is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws
of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or
assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby.
(h) There are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act.
(i) Except as described in the Prospectus, the
Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under,
or Regulations D or S of, the Securities Act, other than
shares issued pursuant to employee benefit plans, stock
options plans or other employee compensation plans or pursuant
to outstanding options, rights or warrants.
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(j) The Company has not 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 labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital
stock or long-term debt of the Company or any material adverse
change, in or affecting the financial position, stockholders'
equity or results of operations of the Company, otherwise than
as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related
notes and supporting schedules), other than the pro forma
financial statements, filed as part of the Registration
Statement or included or incorporated by reference in the
Prospectus present fairly the financial condition and results
of operations of the Company, at the dates and for the periods
indicated, subject, in the case of any interim financial
statements, to year-end audit and subsequent adjustment, and
have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout
the periods involved.
(l) Ernst & Young LLP, who have certified certain
financial statements of the Company, whose report appears in
the Prospectus or is incorporated by reference therein, and
who have delivered the initial letter referred to in Section
10(f) hereof, are independent public accountants as required
by the Securities Act and the Rules and Regulations.
(m) The Company has good and marketable title in fee
simple to all real property and good and valid title to all
personal property owned by it, in each case free and clear of
all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially
affect the value of such property and do not materially
interfere with the use made and proposed to be made of such
property by the Company; and all real property and buildings
held under lease by the Company are held by it under valid,
subsisting and enforceable leases, with such exceptions as are
not material and do not interfere in any material respect with
the use made and proposed to be made of such property and
buildings by the Company.
(n) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties.
(o) The Company owns or possesses adequate rights to
use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service
▇▇▇▇ registrations, copyrights and licenses necessary for the
conduct of its business and has no reason to believe that the
conduct of its business will conflict with, and has not
received any notice of any claim of any currently existing
conflict with, any such rights of others.
(p) Except as described in the Prospectus, there are
no legal or governmental proceedings pending to which the
Company is a party or of which any property or asset of the
Company is the subject which, if determined adversely to the
Company, might have a material adverse effect on the financial
position, stockholders' equity, results of operations,
business or prospects of the Company; and to the best of the
Company's knowledge, except as described in the Prospectus, no
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such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(q) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
(r) There are no contracts or other documents which
are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(s) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of
the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(t) No labor disturbance by the employees of the
Company exists or, to the knowledge of the Company, is
imminent that might reasonably be expected to have a material
adverse effect on the financial position, stockholders'
equity, results of operations, business or prospects of the
Company.
(u) The Company is in compliance in all material
respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any
material liability; the Company has not incurred and does not
expect to incur any material liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any
"pension plan" or "multiemployer plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the
Company would have any material liability that is intended to
be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified
and, to the best of the Company's knowledge, nothing has
occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(v) The Company has filed all federal, state and
local income and franchise tax returns required to be filed
through the date hereof or has requested extensions thereof
and has paid all taxes due thereon, except those taxes that
are currently being contested in good faith, and no tax
deficiency has been determined adversely to the Company which
has had (nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company,
might have) a material adverse effect on the financial
position, stockholders' equity, results of operations,
business or prospects of the Company.
(w) Since the date as of which information is given
in the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, the Company has not
(i) issued
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or granted any securities, other than pursuant to employee
benefit plans, stock option plans, or other employee
compensation plans or pursuant to outstanding options, rights,
or warrants, (ii) incurred any liability or obligation, direct
or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital
stock.
(x) The Company maintains internal accounting
controls which provide reasonable assurance that (i)
transactions are executed in accordance with management's
authorization, (ii) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (iii) access to its assets is
permitted only in accordance with management's authorization
and (iv) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(y) The Company (i) is not in violation of its
charter or by-laws, (ii) is not in default in any material
respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default in any
material respect, in the due performance or observance of any
term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it
is bound or to which any of its material properties or assets
is subject or (iii) is not in violation in any material
respect of any law, ordinance, governmental rule, regulation
or court decree to which it or its material properties or
assets may be subject and has not failed to obtain any
material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the
ownership of its material properties or assets or to the
conduct of its business.
(z) Neither the Company nor any director, officer,
agent, employee or other person associated with or acting on
behalf of the Company has violated or is in violation, in any
material respect, of any provision of the Foreign Corrupt
Practices Act of 1977.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment
of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or
from any of the properties now or previously owned or leased
by the Company in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which
would not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a
material adverse effect on the financial position,
stockholders' equity or results of operations of the Company;
there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such
property or, to the Company's knowledge, into the environment
surrounding such property of any toxic wastes, medical wastes,
solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or with respect to which the Company
has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would
not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse
effect on the financial position, stockholders' equity or
results of operations of the Company; and
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the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign
laws or regulations with respect to environmental protection.
(ab) The Company is not an "investment company"
within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) Such Selling Stockholder has, and immediately
prior to the First Delivery Date (as defined in Section 5
hereof) such Selling Stockholder will have, good and valid
title to the shares of Stock to be sold by such Selling
Stockholder hereunder on such date, free and clear of all
liens, encumbrances, equities or claims; and upon delivery of
such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens,
encumbrances, equities or claims attributable to such Selling
Stockholder, will pass to the several Underwriters.
(b) Such Selling Stockholder has placed in custody
under a custody agreement (the "Custody Agreement") with the
Company, as custodian (the "Custodian"), for delivery under
this Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company
having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling
Stockholder hereunder.
(c) Such Selling Stockholder has duly and irrevocably
executed and delivered a power of attorney (the "Power of
Attorney") appointing certain persons, as attorneys-in-fact,
with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and
deliver this Agreement and to take such other action as may be
necessary or desirable to carry out the provisions hereof on
behalf of such Selling Stockholder.
(d) Such Selling Stockholder has full right, power
and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement; the execution, delivery
and performance of this Agreement, the Power of Attorney and
the Custody Agreement by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions
contemplated hereby and thereby 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 such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder are subject,
nor will such actions result in any violation of any statute
or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling
Stockholder or the property or assets of such Selling
Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization
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or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of
Attorney or the Custody Agreement by such Selling Stockholder
and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby.
(e) To the extent that any statements or omissions
made in the Registration Statement, the Prospectus or any
amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the
Company by such Selling Stockholder specifically for inclusion
therein, the Registration Statement did not, the Prospectus
and any amendments or supplements to the Registration
Statement or the Prospectus will not, when they become
effective or are filed with the Commission, as the case may
be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading. It is
understood and agreed that the statements with respect to the
number of shares of the Stock being sold by such Selling
Stockholder appearing on the cover page and page 25 of the
Prospectus, and any statements with respect to such Selling
Stockholder's relationship with the Company appearing on page
25 of the Prospectus, constitute the only information
furnished in writing to the Company by or on behalf of such
Selling Stockholder specifically for inclusion in the
Registration Statement, the Prospectus and any amendment or
supplement thereto.
(f) Such 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 the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Stock set opposite his, her or its name in
Schedule 2 hereto, severally and not jointly, to the several Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase the
number of shares of the Firm Stock set opposite that Underwriter's name in
Schedule 1 hereto. Each Underwriter shall be obligated to purchase from each
Selling Stockholder that number of shares of the Firm Stock which represents the
same proportion of the number of shares of the Firm Stock to be sold by such
Selling Stockholder, as the number of shares of the Firm Stock set forth
opposite the name of such Underwriter in Schedule 1 represents of the total
number of shares of the Firm Stock to be purchased by all of the Underwriters
pursuant to this Agreement. The respective purchase obligations of the
Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, __________ grants to the Underwriters an option
to purchase up to 375,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts. The price of both the Firm Stock and any Option Stock shall be $_____
per share.
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The Selling Stockholders shall not be obligated to deliver any
of the Stock to be delivered on the First Delivery Date or the Second Delivery
Date (as hereinafter defined), as the case may be, except upon payment for all
the Stock to be purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
Each Underwriter agrees to comply with applicable laws in each
jurisdiction in which it may offer or sell the Stock.
5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representatives and the Selling Stockholders. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Selling Stockholders shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Selling Stockholders of
the purchase price by certified or official bank check or checks payable in
same-day funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in
such names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement the option granted in Section 3 may be exercised by written
notice being given to the Selling Stockholders by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. (The date and time the shares of
Option Stock are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, _________ shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of __________ of the purchase price by certified or official bank
check or checks payable in same-day funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each
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Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, __________ shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act on the business day
following the execution and delivery of this Agreement; to
make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, 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 the
Representatives with copies thereof; to advise the
Representatives, 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 the Prospectus, of the suspension of the
qualification of the Stock 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 the 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 the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed
copy of each of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith;
(c) To deliver promptly to the Representatives in New
York City such number of the following documents as the
Representatives shall request: (i) conformed copies of the
Registration Statement as originally filed with the Commission
and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share
earnings) and (ii) each Preliminary Prospectus, the Prospectus
(not later than the day following the execution and delivery
of this Agreement) and any amended or supplemented Prospectus
(not later than the day following the date of such amendment
or supplement); and, if the delivery of a prospectus is
required at any time after the Effective Time of the
Registration Statement in connection with the offering or sale
of the Stock (or any other securities relating thereto) and if
at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with
the Securities Act, to notify the Representatives and, upon
their request, to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as
the Representatives may from time to time request
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of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any (i)
Preliminary Prospectus, (ii) amendment to the Registration
Statement or supplement to the Prospectus or (iii) any
Prospectus pursuant to Rule 424 of the Rules and Regulations,
to furnish a copy thereof to the Representatives and counsel
for the Underwriters and obtain the consent of the
Representatives to the filing;
(f) As soon as practicable after the Effective Date
of the Registration Statement (it being understood that the
Company shall have at least 410 days after the end of the
Company's current fiscal quarter), to make generally available
to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158);
(g) For a period of five years following the
Effective Date of the Registration Statement, to furnish to
the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all
reports and financial statements furnished by the Company to
the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to
the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) Promptly from time to time to take such action as
the Representatives may reasonably request to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Representatives may request 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 Stock, 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; and
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, offer for sale,
sell or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result
in the disposition at any time in the future of) any shares of
Common Stock or securities convertible into or exchangeable
for Common Stock or substantially similar securities (other
(i) Common Stock sold pursuant to the Prospectus, (ii) shares
of Common Stock and other securities issued pursuant to
employee benefit plans, stock option plans or other employee
compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights and (iii)
other transfers and dispositions, provided that the recipient
remains subject to the lock-up restrictions for the remainder
of the 90-day lock-up period), or sell or grant options,
rights or warrants with respect to any shares of Common Stock
or securities convertible into or exchangeable for our Common
Stock or substantially similar securities (other
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than the grant of options pursuant to option plans existing on
the date hereof), whether any of the transactions described in
this Section 7(i) is to be settled by delivery of common stock
or other securities, in cash or otherwise, without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause each
executive officer and director of the Company to furnish to
▇▇▇▇▇▇ Brothers Inc., prior to the First Delivery Date, a
letter or letters, in form and substance reasonably
satisfactory to counsel for the Underwriters, pursuant to
which each such person shall agree not to enter into any of
the transactions described in this Section 7(i) for a period
of 90 days from the date of the Prospectus, without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.
7. Further Agreements of the Selling Stockholders. The Selling
Stockholders each agree:
(a) That the Stock to be sold by the Selling
Stockholders hereunder, which is represented by the
certificates held in custody for the Selling Stockholders, is
subject to the interest of the Underwriters, that the
arrangements made by the Selling Stockholders for such custody
are to that extent irrevocable, and that the obligations of
the Selling Stockholders hereunder shall not be terminated by
any act of the Selling Stockholders, by operation of law, by
the death or incapacity of the individual Selling Stockholders
or, in the case of a trust, by the death or incapacity of any
executor or trustee or the termination of such trust, or the
occurrence of any other event (other than the termination of
this Agreement).
(b) To deliver to the Representatives prior to the
First Delivery Date a properly completed and executed United
States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of reproducing and distributing
this Agreement; (e) the costs of distributing the terms of agreement relating to
the organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) the costs of
delivering and distributing the Custody Agreements and the Powers of Attorney;
(g) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Stock; (h)
any applicable listing or other fees; (i) the fees and expenses (not to exceed
$5,000) of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 6 and of preparing, printing and
distributing a Blue Sky Memorandum (including the reasonable related fees and
expenses of counsel to the Underwriters); and (j) all other costs and expenses
incident to the performance of the obligations of the Company and the Selling
Stockholders under this Agreement, provided that, except as provided in this
Section 9 and Section 14, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Common Stock which they may sell and the expenses of advertising any
offering of the Common Stock made by the Underwriters.
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9.Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 6(a); 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 any request of the Commission for inclusion of
additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date
that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains any untrue statement
of a fact which, in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, is material or omits to state
any fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to made
the statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Custody Agreements, the Powers of Attorney, the
Lock-Up Agreements (as defined below), the Stock, the
Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all
respects to counsel for the Underwriters, and the Company and
the Selling Stockholders shall have furnished to such counsel
all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) (1) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have
furnished to the Representatives a written opinion, as counsel
to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation;
(ii) The Company has corporate power to own
its properties and conduct its business as described
in the Prospectus to enter into this Agreement and to
perform its obligations hereunder;
(iii) All of the outstanding shares of
capital stock of the Company (including the shares of
Stock being delivered on such Delivery Date) have
been duly authorized by all necessary corporate
action of the Company are validly issued by the
Company, fully paid and non-assessable; and the
holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights to
subscribe for any shares of the Stock pursuant to the
Company's Certificate of Incorporation or By-Laws or
the Delaware General Corporation Law;
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(iv) The execution and delivery of this
Agreement have been duly authorized by all necessary
corporate action of the Company, and this Agreement
has been duly executed and delivered by the Company;
and
(v) (A) The sale of the Stock being
delivered on such Delivery Date by the Selling
Stockholders to the Underwriters pursuant to this
Agreement, and the performance by the Company of its
obligations in this Agreement (a) will not require
any consent, approval, authorization, registration or
qualification of or with any governmental authority
of the United States or the State of New York, or
under the General Corporation Law of the State of
Delaware, except such as have been obtained or
effected under the Securities Act and the Securities
Exchange Act of 1934, as amended (but no opinion need
be expressed as to any consent, approval,
authorization, registration or qualification that may
be required under state securities or Blue Sky laws),
and (b) will not result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any of the agreements of the Company
listed on an exhibit to such opinion, the Certificate
of Incorporation or By-Laws of the Company, or
(based solely on inquiry of the President and Chief
Executive Officer of the Company) any judgment,
decree or order applicable to the Company of any
court or other governmental authority; and (B) the
holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights or
other rights to subscribe for or to purchase, nor are
there any restrictions upon the voting or transfer
of, any shares of the Stock pursuant to any of the
agreements of the Company listed on an exhibit to
such opinion.
In rendering such opinion, such counsel may state
that (i) their opinion is limited to matters governed by the
Federal laws of the United States of America, the laws of the
State of New York and the General Corporation Law of the State
of Delaware and that such counsel is not admitted in the State
of Delaware, (ii) insofar as the foregoing opinions relate to
the valid existence and good standing of the Company, they are
based solely on a certificate of good standing received from
the Secretary of State of Delaware and on a telephone
confirmation from such Secretary of State, and (iii) insofar
as the foregoing opinions relate to the legality, validity,
binding effect or enforceability of any agreement or
obligation of the Company, (a) such counsel has assumed that
each other party to such agreement or obligation has satisfied
those legal requirements that are applicable to it to the
extent necessary to make such agreement or obligation
enforceable against it and (b) such opinions are subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of
equity.
(2) Such counsel shall also have furnished to the
Representatives a written statement, addressed to the
Underwriters and dated the First Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to
the effect that such counsel has acted as counsel to the
Company in connection with the preparation of the Registration
Statement, and based on the foregoing:
(ii) The Registration Statement (except the
financial statements and schedules and other
financial and statistical data included therein, as
to which no view need be expressed), at the Effective
Time, and the Prospectus (except as aforesaid), as of
the date
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thereof, appeared on their face to be appropriately
responsive in all material respects to the
requirements of the Securities Act and the Rules and
Regulations thereunder. In addition, such counsel
does not know of any contracts or other documents of
a character required to be filed as exhibits to the
Registration Statement or required to be described in
the Registration Statement or the Prospectus that are
not filed or described as so required;
(iii) No information has come to such
counsel's attention that causes such counsel to
believe that the Registration Statement (except the
financial statements and schedules and other
financial and statistical data included therein, as
to which no view need be expressed), at the time it
became effective, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading.
(iv) No information has come to such
counsel's attention that causes such counsel to
believe that the Prospectus (except the financial
statements and schedules and other financial and
statistical data included therein, as to which no
view need be expressed), as of the date thereof or
the First Delivery Date, contained or contains an
untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
Such statement shall also confirm that (based solely
upon a telephonic confirmation from a representative of the
Commission) the Registration Statement is effective under the
Securities Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose
has been instituted or threatened, by the Commission.
Such statement shall also confirm that, based solely
on inquiry of the President and Chief Executive Officer of the
Company, such counsel knows of no contracts, agreements or
understandings between the Company and any person granting
such person the right (other than rights which have been
waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act.
In addition, such statement shall confirm that, based
solely on inquiry of the President and Chief Executive Officer
of the Company, such counsel knows of no legal or governmental
proceedings to which the Company is a party that are currently
pending before any adjudicative tribunal or that have been
threatened by a written communication manifesting an intention
to initiate such proceedings received by the management of the
Company that are required to be disclosed in the Prospectus
that are not disclosed as required.
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The foregoing opinion and statement may be qualified
by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or
the Prospectus.
(e) Counsel for each of the Selling Stockholder shall
have furnished to the Representatives its written opinion,
addressed to the Underwriters and dated the First Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Such Selling Stockholder has full right,
power and authority to enter into this Agreement, the
Powers of Attorney and the Custody Agreements; the
performance of this Agreement, the Powers of Attorney
and the Custody Agreements by such Selling
Stockholder (a) will not require any consent,
approval, authorization, registration or
qualification of or with any governmental authority
of the United States or the State of New York, except
such as have been obtained or effected under the
Securities Act and the Securities Exchange Act of
1934, as amended (but no opinion need be expressed as
to any consent, approval, authorization, registration
or qualification that may be required under state
securities or Blue Sky laws), and (b) will not result
in a breach or violation of any of the terms or
provisions of, or constitute a default under, any of
the agreements of such Selling Stockholder identified
on an exhibit to such opinion, or (based solely on
inquiry of such Selling Stockholder) any judgment,
decree or order applicable to such Selling
Stockholder of any court or other governmental
authority;
(ii) This Agreement has been duly executed
and delivered by or on behalf of such Selling
Stockholder;
(iii) A Power-of-Attorney and a Custody
Agreement have been duly executed and delivered by
such Selling Stockholder and constitute valid and
binding agreements of such Selling Stockholder; and
(iv) Upon payment for, and delivery of, the
shares of Stock to be sold by the Selling
Stockholders under this Agreement in accordance with
the terms hereof, the Underwriters will acquire all
of the rights of such Selling Stockholders in such
Shares and will also acquire the interest of such
Selling Stockholders in such Shares free of any
adverse claim (within the meaning of Section 8-302 of
the New York Uniform Commercial Code).
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of
the United States of America and the laws of the State of New
York, and in rendering the opinion in Section 9(e)(iv) above,
such counsel may rely a upon certificate of each such Selling
Stockholder in respect of matters of fact as to ownership of,
and the absence of adverse claims regarding, the shares of
Stock sold by such Selling Stockholder, provided that such
counsel shall (i) furnish copies thereof to the
Representatives and state that it believes that both the
Underwriters and it are justified in relying upon such
certificates and (ii) assume that (a) each Underwriter will
take delivery of the Stock in good faith and without notice of
any adverse claim and (b) the indorsements on the shares of
Stock to be sold by such Selling Stockholder are genuine.
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(f) With respect to the letter of Ernst & Young LLP
delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Representatives a letter
(the "bring-down letter") of such accountants, addressed to
the Underwriters and dated such Delivery Date (i) confirming
that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date
not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered
by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial
letter.
(g) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of
its Chairman of the Board, its President or a Vice President
and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and
correct as of such Delivery Date; the Company has
complied with all its agreements contained herein;
and the conditions set forth in Sections 9(a) and
9(i) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) the Registration Statement, as of
its Effective Date, and the Prospectus, as of the
Effective Date, did not include any untrue statement
of a material fact and did not omit to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and (B) since the Effective Date of the
Registration Statement no event has occurred which
should have been set forth in a supplement or
amendment to the Registration Statement or the
Prospectus.
(h) Each Selling Stockholder (or the Custodian or one
or more attorneys-in-fact on behalf of each of the Selling
Stockholders) shall have furnished to the Representatives on
the First Delivery Date a certificate, dated the First
Delivery Date, signed by, or on behalf of, such Selling
Stockholder (or the Custodian or one or more
attorneys-in-fact) stating that the representations,
warranties and agreements of such Selling Stockholder
contained herein are true and correct as of the First Delivery
Date and that such Selling Stockholder has complied with all
agreements contained herein to be performed by such Selling
Stockholder at or prior to the First Delivery Date.
(i) (i) The Company shall not have 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 labor dispute or court or
governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock
or long-term debt of the Company or any change, or any
development involving a prospective change, in or affecting
the financial position, stockholders' equity or results of
operations of the Company, otherwise than as
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set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is,
in the reasonable judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock
being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Each Selling Stockholder shall have furnished to
the Representatives a duly executed lock-up agreement (the
"Lock-Up Agreements") stating that each Selling Stockholder,
for a period of 90 days from the date of the Prospectus, will
not, directly or indirectly, offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the
disposition at any time in the future of) any shares of Common
Stock or securities convertible into or exchangeable for
Common Stock or substantially similar securities (other than
the sale of shares of Common Stock that such Selling
Stockholder may be selling pursuant to the Prospectus or gifts
and other private transfers of Common Stock, provided that the
transferee agrees to be bound by all of the terms and
provisions of this letter agreement), without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc..
(k) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States shall
be such) as to make it, in the judgment of a majority in
interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of
the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless
each Underwriter, its officers and employees and each person,
if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock),
to which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement
thereto, or (B) in any blue sky application or other document
prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the
purpose of qualifying any or all of the Stock under the
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securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called
a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or
failure to act, or any alleged act or failure to act, by any
Underwriter in connection with, or relating in any manner to,
the marketing of the Stock or the conduct of the offering
contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable in
the case of any matter covered by this clause (iii) to the
extent that it is determined in a final judgement by a court
of competent jurisdiction that such loss, claim, damage,
liability or action relates to or arose directly from any such
act or failure to act undertaken or omitted to be taken by
such Underwriter through its negligence or fraudulent or
wilful misconduct), and shall reimburse each Underwriter and
each such officer, employee and controlling person promptly
upon demand for any legal or other expenses reasonably
incurred by that Underwriter, officer, employee or controlling
person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, or
in any Blue Sky Application in reliance upon and in conformity
with the written information furnished to the Company through
the Representatives by or on behalf of any Underwriter
specifically for inclusion therein and described in Section
10(f); and provided further, however, that the Company shall
not be liable to any Underwriter in any such case with respect
to any untrue statement or alleged untrue statement or
omission or alleged omission of a material fact in the
Preliminary Prospectus to the extent that the loss, claim,
damage or liability of such Underwriter (or the action in
respect thereof) arises out of a sale by such Underwriter of
Stock to a person who was not sent or given, at or prior to
the closing of such sale to such person, a copy of the
Prospectus as then amended or supplemented, if the Company had
previously furnished (or made available) copies thereof to
such Underwriter and the statement or omission in question
contained in the Preliminary Prospectus was corrected therein.
The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person
of that Underwriter.
(b) Each Selling Stockholder shall indemnify and hold
harmless each Underwriter, its officers and employees and each
person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and
sales of Stock), to which that Underwriter, officer, employee
or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated
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therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of such Selling Stockholder specifically for inclusion
therein, and shall reimburse each Underwriter, its officers
and employees and each such controlling person for any legal
or other expenses reasonably incurred by that Underwriter, its
officers, employees or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred. It is understood and agreed that the statements
with respect to the number of shares of the Stock being sold
by each Selling Stockholder appearing on the cover page and
page 25 of the Prospectus, and any statements with respect to
each Selling Stockholder's relationship with the Company
appearing on page 25 of the Prospectus, constitute the only
information furnished in writing to the Company by or on
behalf of the Selling Stockholders specifically for inclusion
in the Registration Statement, the Prospectus and any
amendment or supplement thereto. The foregoing indemnity
agreement is in addition to any liability which the Selling
Stockholders may otherwise have to any Underwriter or any
officer, employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, its officers
and employees, each of its directors and each person, if any,
who controls the Company within the meaning of the Securities
Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which
the Company or any such director, officer or controlling
person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with the written
information furnished to the Company through the
Representatives by or on behalf of that Underwriter
specifically for inclusion therein and described in Section
10(f), and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating
or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the
Company or any such director, officer or controlling person.
(d) Promptly after receipt by an indemnified party
under this Section 10 of notice of any claim or the
commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement
of that action; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability
which it may have under this Section 10 except to the extent
it has been materially prejudiced by such failure and,
provided
21
21
further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If
any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation;
provided, however, that the Representatives shall have the
right to employ counsel to represent jointly the
Representatives and those other Underwriters and their
respective officers, employees and controlling persons who may
be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriters against the
Company under this Section 10 if, in the reasonable judgment
of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees
and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company. Each
indemnified party, as a condition of the indemnity agreements
contained in Sections 10(a), 10(b) and 10(c) shall use its
best efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party
shall (i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party
from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and
against any loss of liability by reason of such settlement or
judgment.
(e) If the indemnification provided for in this
Section 11 shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section 10(a), 10(b) or 10(c) in respect of any loss, claim,
damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand, and the Underwriters
from the offering of the Stock on the other hand, or (ii) if
the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on
the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action
in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company
and the Selling Stockholders on the one hand and the
Underwriters on the other hand with
22
22
respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting
expenses) received by the Selling Stockholders, on the one
hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear
to the total gross proceeds from the offering of the shares of
the Stock 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 whether the untrue
or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders
or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to
this Section 10(e) were to be 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 into account the equitable considerations
referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in
this Section 10(e) shall be deemed to include, for purposes of
this Section 10(e), 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 Section 10(e), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission
or alleged omission, and no Selling Stockholder shall be
required to contribute any amount in excess of the amount of
total net proceeds received by such Selling Stockholder from
the sale of the Stock under this Agreement. No person guilty
of fraudulent misrepresentation (within the meaning of Section
10(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm that the
statements with respect to the public offering of the Stock
set forth on the cover page of, in the stabilization legend on
the inside cover page of, and under the caption "Underwriting"
in, the Prospectus are correct and constitute the only
information furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the
23
23
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 9 and 14. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company and the Selling
Stockholders for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the First
Delivery Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the Underwriters
may be necessary in the Registration Statement, the Prospectus or in any other
document or arrangement.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(i)
or 9(j) shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the
Selling Stockholders shall fail to tender the Stock for delivery to the
Underwriters for any reason permitted under this Agreement, or (b) the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement (including the termination of this Agreement pursuant to Section
12), the Company and the Selling Stockholders shall reimburse the Underwriters
for the reasonable fees and expenses of their counsel and for such other
reasonable out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company and the Selling Stockholders shall pay the full amount
thereof to the Representatives. Notwithstanding the foregoing, if this Agreement
is terminated pursuant to Section 12 by reason of the default of one or more
Underwriters, neither the Company nor the Selling Stockholders shall be
obligated to reimburse any Underwriter on account of these expenses.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax:
212-528-8822);
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24
(b) 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:
Vice President of Finance, Secretary and Treasurer (Fax: (972)
401-0705);
(c) if to the Selling Stockholders, shall be
delivered or sent by mail, telex or facsimile transmission to
each of the Selling Stockholders at the addresses set forth on
Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives, and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholders contained in this Agreement shall also
be deemed to be for the benefit of the officers and employees of each
Underwriter and the person or persons, if any, who control each Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 10(c) of this Agreement shall
be deemed to be for the benefit of directors, officers and employees of the
Company and any person controlling the Company within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
16, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Term "Business Day". For purposes of
this Agreement, "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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25
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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26
If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
CARBO CERAMICS INC.
By
----------------------
Title:
The Selling Stockholders named in Schedule 2
to this Agreement
By
----------------------
Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By
----------------------------------
Authorized Representative
By THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
By
----------------------------------
Authorized Representative
By ▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL
By
----------------------------------
Authorized Representative
27
SCHEDULE 1
Number of
Underwriters Shares
------------ ------
▇▇▇▇▇▇ Brothers Inc. ............................... [ ]
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company ...................... [ ]
▇▇▇▇▇▇▇ & Company International .................... [ ]
Total ................................ 2,500,000
28
SCHEDULE 2
Number of Shares
Name and address of Selling Stockholders of Firm Stock
---------------------------------------- -------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ .............................................. 350,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ .................................................. 300,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ............................................... 1,100,000
J. & ▇. ▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ................................................. 200,000
J. & ▇. ▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ................................................. 140,000
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Family Trusts ............................................ 60,000
c/o U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ................................................. 350,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Total .................................................. 2,500,000
=========
