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EXHIBIT 1(b)
[ ]% Senior Subordinated Notes Due 2008
DENBURY MANAGEMENT, INC.
UNDERWRITING AGREEMENT
February, 1998
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February, 1998
Xxxxxx Xxxxxxx & Co.
Incorporated
NationsBanc Xxxxxxxxxx
Securities LLC
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
DENBURY MANAGEMENT, INC., a Texas corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") $125 million principal amount of its [ ]% Senior
Subordinated Notes Due 2008 (the "Securities") to be issued pursuant to the
provisions of an Indenture dated as of February [ ], 1998 (the "Indenture")
between the Company and ChaseBank of Texas, National Association, as Trustee
(the "Trustee"). The Securities will be guaranteed on a senior subordinated
basis (the "Guaranty") by Denbury Resources Inc., a Canadian corporation and
the parent of the Company (the "Guarantor").
The Company and the Guarantor have filed with the Securities
and Exchange Commission (the "Commission") a registration statement, including
a prospectus, relating to the Securities. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), and all documents incorporated therein by reference, is
hereinafter referred to as the "Registration Statement"; the prospectus in the
form first used to confirm sales of Securities is hereinafter referred to as
the "Prospectus." If the Company has filed an abbreviated registration
statement to register additional securities pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462 Registration Statement.
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1. Representations and Warranties of the Company and the
Guarantor. Each of the Company and the Guarantor represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain, and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas and the Guarantor has been duly incorporated and is validly
existing as a corporation under the federal laws of Canada, each has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus, the Company is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification,
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except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Guarantor and
the Company and its subsidiaries, taken as a whole and the Guarantor
is duly registered to carry on business in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such registration, except to the extent that the failure to
be so registered would not have a material adverse effect on the
Guarantor and the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the Company or
a subsidiary of the Company, free and clear of all liens,
encumbrances, equities or claims. The Company is the sole direct
subsidiary of the Guarantor.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) enforceability
thereof may be limited by bankruptcy, fraudulent conveyance,
reorganization, insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable
principles of general applicability and (iii) general principles of
equity may affect such matters.
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(g) The Securities have been duly authorized by the Company
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, reorganization, insolvency or similar laws affecting
creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited
by equitable principles of general applicability and (iii) general
principles of equity may affect such matters.
(h) The Guaranty has been duly authorized by the Company and,
when the Indenture has been duly executed and delivered by the
Guarantor, the Guaranty will be a valid and binding agreement of the
Guarantor, enforceable in accordance with its terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may affect such
matters.
(i) The execution and delivery by each of the Company and the
Guarantor of, and the performance by each of the Company and the
Guarantor of their respective obligations under, this Agreement, the
Indenture and the Securities, as the case may be, will not contravene
any provision of applicable law or the articles or certificate of
incorporation or amalgamation or by-laws of the Guarantor or the
Company, as the case may be, or any agreement or other instrument
binding upon the Guarantor or the Company or any of its subsidiaries
that is material to the Guarantor or the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Guarantor, the
Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Guarantor and the Company of their
respective obligations under this Agreement, the Indenture or the
Securities, as the case
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may be, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of
the Securities.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor or the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Guarantor, the Company or any of its
subsidiaries is a party or to which any of the properties of the
Guarantor, the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.
(m) Each of the Guarantor and the Company and its
subsidiaries has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the
Guarantor and the Company and its subsidiaries, taken as a whole.
(n) None of the Company and the Guarantor is and, after
giving effect to the offering and sale of the
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Securities and the application of the proceeds thereof as described in
the Prospectus, will be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(o) The Guarantor and the Company and its subsidiaries (i)
are in compliance with any and all applicable foreign, federal, state
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 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 would not,
singly or in the aggregate, have a material adverse effect on the
Guarantor or the Company and its subsidiaries, taken as a whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures (other than those required in the ordinary
course of the Company's operations) required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
(other than encountered in the ordinary course of the Company's
operations) and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(q) The Guarantor and the Company have each complied with all
provisions of Section 517.075, Florida Statutes relating to doing
business with the Government of Cuba or with any person or affiliate
located in Cuba.
2. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and the Underwriters, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agree, severally and not jointly, to
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purchase from the Company the respective principal amounts of Securities set
forth in Schedule I hereto opposite their names at [ ]% of their
principal amount (the "purchase price") plus accrued interest, if any, from
[ ], 1998 to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Securities are to be offered to the public
initially at [ ]% of their principal amount--the public offering price-- plus
accrued interest, if any, and to certain dealers selected by you at a price
that represents a concession not in excess of [ ]% of their principal amount
under the public offering price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of [ ]% of their principal
amount, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be
made in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several
Underwriters at 10:30 a.m., New York City time, on [ ], 1998, or at
such other time on the same or such other date, not later than [ ],
1998, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Payment for the Securities shall be made against delivery to
you on the Closing Date for the respective accounts of the several Underwriters
of the Securities registered in such names and in such denominations as you
shall request in writing not less than one full business day prior to the
Closing Date, with any transfer taxes payable in connection with the transfer
of the Securities to the Underwriters duly paid.
5. Conditions of the Underwriters' Obligations. The
obligations of the Company and the several obligations of the Underwriters to
purchase and pay for the Securities on the Closing Date are subject to the
condition that the Registration Statement shall have become effective not later
than 5:00 p.m. (New York City time) on the date hereof.
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The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement), that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) You shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company and
the Guarantor contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
Jenkens & Xxxxxxxxx, a Professional Corporation, counsel for the
Company and U.S. counsel
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for the Guarantor, dated the Closing Date, to the effect that:
(i) the Company is a corporation validly existing in
good standing under the laws of the State of Texas, it has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and it is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company is a corporation
validly existing in good standing under the laws of the U.S.
jurisdiction of its incorporation and has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each U.S.
jurisdiction in which the conduct of business or its ownership
or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement
of each of the Company and the Guarantor, enforceable in
accordance with its terms except as (i) enforceability thereof
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may
affect such matters;
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(v) the Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable
principles of general applicability and (iii) general
principles of equity may affect such matters;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement, the Securities and the Indenture, will not
contravene any provision of law applicable to the Company or
the articles, the certificate of incorporation, by-laws or
other charter documents of the Company or any agreement or
other instrument binding upon the Guarantor, the Company or
any of its subsidiaries filed as an exhibit to the
Registration Statement or the Company's Annual Report on Form
10-K for the year ended December 31, 1996, or, to such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, the
Securities and the Indenture, except such as may be required
by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities;
(vii) the statement (1) in the Prospectus under the
captions "Business and Properties-- Regulations" and
"Description of the Securities" and in the first, second and
fourth paragraphs under the caption "Underwriters" and (2) in
the Registration Statement under Items 15, in each case only
insofar as such statements constitute summaries of the legal
matters, documents and proceedings referred to therein, fairly
present
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the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required;
(ix) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(x) the Registration Statement and Prospectus (except
for financial statements and schedules and other financial and
statistical data and the reserve or related data and
information included therein as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the rules and regulations
of the Commission thereunder.
In such opinion, such counsel will state that it (i)
has no reason to believe that (except for financial statements
and schedules and other financial and statistical data and the
reserve or related data and information included therein as to
which such counsel need not express any belief and except for
that part of the Registration Statement that constitutes the
Form T-1 heretofore referred to) the Registration Statement
and the prospectus included therein at the time the
Registration Statement became effective contained any 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 and (ii) has no reason to
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believe (except for financial statements and schedules and
other financial and statistical data as to which such counsel
need not express any belief) the Prospectus as of the Closing
Date contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
Burnet, Xxxxxxxxx & Xxxxxx, Canadian counsel for the Company and the
Guarantor, dated the Closing Date, to the effect that:
(i) the Guarantor is a corporation duly incorporated
and validly existing under the federal laws of the Canada, it
has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and it
is duly registered to carry on business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
registered would not have a material adverse effect on the
Guarantor and its subsidiaries, taken as a whole;
(ii) this Agreement has been duly authorized,
executed and delivered by the Guarantor;
(iii) the Indenture has been duly authorized,
executed and delivered by the Guarantor;
(iv) the execution and delivery by the Guarantor of,
and the performance by the Guarantor of its obligations under,
this Agreement, the Securities and the Indenture, will not
contravene any provision of applicable Canadian Law or the
articles, the certificate of incorporation, by-laws or other
charter documents of the Guarantor, or, to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Guarantor
or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency is required for the performance by the Guarantor of its
obligations under this Agreement, the Securities
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and the Indenture, except such as may be required by The
Toronto Stock Exchange and the securities laws of the Canadian
provinces in connection with the offer and sale of the
Securities;
(v) the statements in the Prospectus under the
captions "Canadian Taxation and the Investment Canada Act" and
"Service and Enforcement of Legal Process", in each case only
insofar as such statements constitute summaries of the legal
matters, documents and proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the
matters referred to therein;
(vi) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Guarantor is a party or to which any of the
properties of the Guarantor is subject that are required to be
described in the Canadian Prospectus and are not so described
or of any statutes, regulations, contracts or other documents
that are required to be described in the Prospectus that are
not so described;
(e) You shall have received on the Closing Date an opinion of
Cravath, Swaine & Xxxxx, special counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in subparagraphs
(iii), (iv), (v), (vii) (but only as to the statements in the
Prospectus under "Description of the Securities" and "Underwriters"),
(x) and the last paragraph of Section 5(c) above.
With respect to the last paragraph of Section 5(c) and Section
5(d) above, Jenkens & Xxxxxxxxx, a Professional Corporation, Burnet,
Xxxxxxxxx & Xxxxxx and Cravath, Swaine & Xxxxx may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof with officers of the Company, but are without
independent check or verification except as specified.
(f) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date
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hereof or the Closing Date, as the case may be, in form and substance
satisfactory to you, from Deloitte & Touche, Chartered Accountants,
Calgary, Alberta, independent public accountants for the Guarantor and
the Company, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(g) The Equity Offering (as defined in the Prospectus) shall
have been consummated substantially on the terms described in the
Registration Statement.
(h) The TPG Purchase (as defined in the Prospectus) shall
have been consummated substantially on the terms described in the
Registration Statement.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three copies of the
conformed XXXXX submission copy of the Registration Statement
(including exhibits thereto) and for delivery to each other
Underwriter a conformed XXXXX submission copy of the Registration
Statement (without exhibits thereto) and, to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
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(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the
Company) to which Securities may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending March 31, 1999 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or the Guarantor or warrants to purchase debt securities of
the Company or the Guarantor substantially similar to the Securities
or the Guaranty in respect thereof (other than (i) the Securities and
(ii) commercial paper issued in the ordinary course of business),
without your prior written consent.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses
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incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the
registration and delivery of the Securities under the Securities Act
and all other fees or expenses in connection with the preparation and
filing of the Registration Statement, any preliminary prospectus, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related
to the transfer and delivery of the Securities to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the qualification of the Securities for
offer and sale under state law as provided in section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification,
(iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Securities by the National
Association of Securities Dealers, Inc.(the "NASD"), including any
counsel fees incurred on behalf of or disbursements by Xxxxxx Xxxxxxx
& Co. Incorporated ("Xxxxxx Xxxxxxx") in its capacity as "qualified
independent underwriter", (v) any fees charged by the rating agencies
for the rating of the Securities, (vi) all costs and expenses incident
to listing the Securities on the Luxembourg Stock Exchange, (vii) the
cost of printing certificates representing the Securities, (viii) the
costs and charges of any trustee, transfer agent, registrar or
depositary, (ix) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including
without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (x) all other
costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in
this Section. It is understood, however that
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except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, transfer taxes payable on resale
of any of the Securities by them and any advertising expenses
connected with any offers they may make.
7. Indemnity and Contribution. (a) Each of the Company and
the Guarantor agrees, jointly and severally, to indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages and liabilities (including any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or supplement
if the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
Each of the Company and the Guarantor also agrees to indemnify and hold
harmless Xxxxxx Xxxxxxx and each person, if any, who controls Xxxxxx Xxxxxxx
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of Xxxxxx Xxxxxxx'x
participation as a "qualified independent underwriter" within the meaning of
Rule 2720 of the NASD's Conduct Rules in connection with the offering of the
Securities, except for any losses, claims, damages, liabilities and judgments
resulting from Xxxxxx Xxxxxxx'x, or such controlling person's, willful
misconduct.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless each of the Company and the Guarantor, their
respective directors, their respective officers who sign the Registration
Statement and each person, if any, who controls the Company and the
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Guarantor within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Notwithstanding anything contained herein to the contrary,
if indemnity may be sought pursuant to the second preceding paragraph in
respect of such action or proceeding, then in addition to such separate firm
for the indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in addition to
any local counsel) for Xxxxxx Xxxxxxx in its capacity as a "qualified
independent underwriter" and all persons, if any, who control Xxxxxx Xxxxxxx
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act. Any such firm(s) shall be
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designated in writing by Xxxxxx Xxxxxxx, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company, in the case of
parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor on the one hand and the
Underwriters on the other hand from the offering of the Securities 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 Guarantor on the one hand and of the Underwriters on the other hand in
connection with the statement or omissions that resulted in such losses,
claims, damages or
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liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Company and the Guarantor on the one
hand and of the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantor or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the respective principal amounts of Securities
they have purchased hereunder, and not joint.
The Company, the Guarantor and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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
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fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company and the
Guarantor contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Securities.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be
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purchased on such date, the other Underwriters shall be obligated severally in
the proportion that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the principal amount of Securities set
forth opposite the names of all such nondefaulting Underwriters, or in such
other proportions as you may specify, to purchase the Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of
Securities that any Underwriter has agreed to purchase pursuant to Section 2 be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such principal amount of Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Securities and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any nondefaulting Underwriter
or the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
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11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
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12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
DENBURY MANAGEMENT, INC.
By
------------------------------
Name:
Title:
DENBURY RESOURCES INC.
By
------------------------------
Name:
Title:
Accepted, February , 1998
XXXXXX XXXXXXX & CO.
INCORPORATED
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
Acting severally on behalf
of themselves and the
several Underwriters
named herein.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By
------------------------------
Name:
Title:
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Schedule I
Principal Amount
Underwriter of Securities
----------- -----------------
Xxxxxx Xxxxxxx & Co.
Incorporated
NationsBanc Xxxxxxxxxx
Securities LLC
------------
$125,000,000
============
