Exhibit 10.11
8,000,000 Shares
DENBURY RESOURCES INC.
Common Stock
UNDERWRITING AGREEMENT
December 18, 2003
CIBC WORLD MARKETS CORP.
000 0XX XXXXXX, 0XX XXXXX
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders of Denbury Resources Inc., a Delaware corporation
(the "Company"), named in Schedule 2 hereto (the "Selling Stockholders"),
propose to sell to you, the underwriter named in Schedule 1 hereto (the
"Underwriter"), an aggregate of 8,000,000 shares (the "Stock") of the Company's
common stock, par value $.001 per share (the "Common Stock"). This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholders by the Underwriter.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 333-107676)
with respect to the Stock has (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (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 and amendments
thereto have been delivered by the Company to you as the Underwriter.
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;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriter pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time,
including all information contained in the final prospectus filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations
and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means the prospectus supplement and the
accompanying prospectus and all information incorporated by reference
therein at such time, in the form first used to confirm sales of
Stock. Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
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, as amended ("Exchange Act")
after the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in the Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to include
any periodic report of the Company filed with the Commission pursuant
to Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that 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 will, when they become effective or are filed with the
Commission, as the case may be, 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 an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided 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 by or on behalf of the 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 Exchange Act and the Rules and
Regulations, and none of such documents contained an untrue statement
of material fact or omitted to state a 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, when such documents are filed with the
Commission, will conform in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and 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.
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated or formed, as the case may be,
and are validly existing, as their respective business entities, and
in good standing under the laws of their respective jurisdictions of
incorporation or formation, as the case may be, are duly qualified to
do business and are in good standing as foreign corporations or
limited liability companies in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification (except where the
failure to so qualify or be in good standing as a foreign corporation
or limited liability company would not have a material adverse effect
on the consolidated financial position, stockholders' or members'
equity (as the case may be), results of operation, business or
prospects of the Company and its subsidiaries, taken as a whole), and
have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged;
and none of the subsidiaries of the Company other than Denbury
Offshore, Inc. is a "significant subsidiary", as such term is defined
in Rule 405 of the Rules and Regulations under the Securities Act.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, 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 and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims except as disclosed in the Prospectus.
(f) The shares of Stock to be sold by the Selling Stockholders to
the Underwriter hereunder have been duly and validly authorized.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) 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, which violation, breach or conflict would have a
material adverse effect on the consolidated financial position,
stockholders' or members' equity (as the case may be), results of
operation, business or prospects of the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries 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 subsidiaries or any of their 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 Underwriter, 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 other
than those that have been obtained.
(i) Except as described in the Prospectus, there are 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.
(j) Except as set forth 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 director compensation plans, employee
benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(k) Neither the Company nor any of its subsidiaries has
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 (except for exercises of options
since such date under the Company's existing director compensation
plans, existing stock option plan and issuances of stock under, and
the purchase of Company stock for, the Company's existing stock
purchase plan) or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
management, financial position, stockholders' equity or results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus.
(l) The financial statements (including the related notes and
supporting schedules), filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby,
at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(m) Deloitte & Touche L.L.P., who have certified certain
financial statements of the Company, whose reports appear in the
Prospectus and who has delivered one of the initial letters referred
to in Section 9(g) hereof, are and have been independent public
accountants as required by the Securities Act and the Rules and
Regulations, during the periods covered by the financial statements on
which they reported.
(n) XxXxxxxx and XxxXxxxxxxx, whose reserve audits or evaluations
are referenced or appear, as the case may be, in the Prospectus, were,
as of December 31, 2001 and December 31, 2002, and are, as of the date
hereof, independent engineers with respect to the Company and its
subsidiaries.
(o) The Company and each of its subsidiaries has (1) generally
satisfactory or good and indefeasible title to all its interests in
its oil and gas properties, title investigations having been carried
out by or on behalf of such person in accordance with good practice in
the oil and gas industry in the areas in which such properties are
located, (2) good and marketable title in fee simple to all of its
other real property, and (3) good and marketable 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
properties as a whole and do not materially interfere with the use
made and proposed to be made of such properties as a whole by the
Company and its subsidiaries; and all real properties and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such properties and buildings as a whole by the
Company and its subsidiaries.
(p) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company
reasonably believes is adequate for the conduct of their respective
businesses and the value of their respective properties and is
customary for companies engaged in similar businesses in similar
industries.
(q) The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of
their respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and have
not received any notice of any claim of conflict with, any such rights
of others.
(r) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would be
reasonably expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(s) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(t) 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.
(u) 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.
(v) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
reasonably expected to have a material adverse effect on the
management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole.
(w) 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 (ii) Section
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 is so qualified in all material respects 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.
(x) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof or have filed for appropriate extensions for
such taxes and have paid all taxes due thereon, and no tax deficiency
has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or
any of its subsidiaries, might have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole.
(y) 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) except for
exercises of options since such date under the Company's existing
director compensation plans or existing stock option plan and
issuances of stock under the Company's existing stock purchase plan,
issued or granted any securities, (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.
(z) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(aa) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
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 properties or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business,
except, in the cases of clauses (ii) and (iii), such defaults, events,
violations or failures that in the aggregate might reasonably be
expected to have a material adverse effect on the management,
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole.
(bb) The course of conduct of the Company in transactions between
the Company and its subsidiaries on one hand, and Genesis Partners,
L.P. (the "Partnership") and its subsidiaries on the other hand, since
the acquisition by the Company of Genesis Energy LLC, the general
partner of the Partnership, has at all times been "fair and
reasonable" to the Partnership, as determined within the context of
Section 7.9 of the limited partnership agreement of the Partnership.
(cc) 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 any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the property now or previously owned or leased by the Company or
its subsidiaries 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 have, or could not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries, taken as whole; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or 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 any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or 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 management, consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company
and its subsidiaries, taken as a whole; and 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 ("Environmental Laws").
(dd) Neither the Company nor any subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(ee) Except as described in the Prospectus, no subsidiary of the
Company is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on
such subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company.
(ff) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities ("Permit"
or "Permits") necessary for the ownership of property or assets or to
conduct their respective businesses except where the failure to have
such Permits would not reasonably be expected to have a material
adverse effect on the management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole; neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole; the Company and
each of its subsidiaries has operated and is operating its business in
compliance with and not in violation of any of its obligations with
respect to each such Permit except where such violation would not
reasonably be expected to have a material adverse effect on the
management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole; no event has occurred which allows, or
after notice or lapse of time or both would allow, revocation or
termination of any such Permit or result in any other impairment of
the rights of the Company or any of its subsidiaries under any such
Permit, subject in each case to such qualification as described in the
Prospectus; and, except as described in the Prospectus, such permits
contain no restrictions that are burdensome to the Company or any of
its subsidiaries except for restrictions that would not, singly or in
the aggregate, have a material adverse effect on the management,
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole.
(gg) The principal executive officer and principal financial
officer of the Company have made all certifications required by the
Xxxxxxxx-Xxxxx Act or any related rules and regulations promulgated by
the Commission, and the statements contained in any such certification
are complete and correct. The Company maintains "disclosure controls
and procedures" (as defined in Rule 13a-14(c) under the Exchange Act),
and such controls and procedures are designed (i) to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified
in the Commission's rules and forms and (ii) to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal
executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure. The Company does
not have any material weaknesses in internal controls, and there has
been no fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
controls. The Company is otherwise in compliance in all material
respects with all applicable effective provisions of the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated by the
Commission (and intends to comply with all applicable provisions that
are not yet effective upon effectiveness).
Any certificate signed by any officer of the Company and delivered to
the Underwriter or counsel for the Underwriter in connection with the offering
of the Stock shall be deemed a representation and warranty by the Company, as to
matters covered thereby, to the Underwriter.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally, and not jointly, represents,
warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
Delivery Date (as defined in Section 5 hereof) the Selling Stockholder
will have, good and valid title to the shares of Stock to be sold by
the 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 and thereto (and assuming
that the Underwriter acquires the shares of Stock without any notice
of any adverse claim (within the meaning of Section 8-105 of the
Uniform Commercial Code) that has been created by the Underwriter or
its Affiliates) good and valid title to such shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the
Underwriter.
(b) The Selling Stockholder has full right, partnership power and
authority to enter into this Agreement; the execution, delivery and
performance of this Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder 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 material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of the
provisions of the certificate of limited partnership or the
partnership agreement of the Selling Stockholder, or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or the property
or assets of the Selling Stockholder; and, except for the registration
of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations, filings 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
Underwriter, 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 Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and
thereby.
(c) The Registration Statement 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, do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, the foregoing representations and
warranties shall only apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to such Selling Stockholder
furnished to the Company in writing by such Selling Stockholder
expressly for use therein; and provided, further, 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 by or on behalf of the Underwriter specifically for inclusion
therein.
(d) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in 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 Underwriter. 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 Stock set opposite its name in Schedule 2 hereto,
severally and not jointly, to the Underwriter and the Underwriter agrees to
purchase the number of shares of the Stock set opposite the Underwriter's name
in Schedule 1 hereto. The price of the Stock shall be $13.25 per share.
The Selling Stockholders shall not be obligated to deliver any of the
Stock to be delivered on the Delivery Date except upon payment for all the Stock
to be purchased on the Delivery Date as provided herein.
4. Offering of Stock by the Underwriter. Upon authorization by the
Underwriter of the release of the Stock, the Underwriter proposes to offer the
Stock for sale upon the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Stock shall be made at the office of Xxxxxx & Xxxxxx L.L.P., 2300 First City
Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, at 9:00 A.M., Houston, Texas 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 Underwriter,
the Selling Stockholders and the Company. This date and time are sometimes
referred to herein as the "Delivery Date." On the Delivery Date, the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the Stock to the Underwriter for the account of the Underwriter against payment
to or upon the order of the Selling Stockholders of the purchase price by wire
transfer in immediately available 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 the Underwriter hereunder. Upon delivery, the
Stock shall be registered in such names and in such denominations as the
Underwriter shall request in writing not less than two full business days prior
to the Delivery Date. For the purpose of expediting the checking and packaging
of the certificates for the Stock, the Selling Stockholders shall, or shall
cause a custodian to, make the certificates representing the Stock available for
inspection by the Underwriter in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriter and to file the Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business
on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Underwriter,
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 Underwriter with copies
thereof; to advise the Underwriter, 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 the Underwriter and to counsel for the
Underwriter a signed copy 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 Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits) and, (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus; and, if the delivery of a
prospectus is required at any time after the Effective Time 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 an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Underwriter and, upon its
request, to file such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many
copies as the Underwriter may from time to time reasonably request 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
Underwriter, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any prospectus pursuant
to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Underwriter and counsel for the Underwriter and obtain the consent
of the Underwriter to the filing; provided, that the foregoing
restriction shall not preclude the Company from (x) filing without the
consent of the Underwriter any document required to be filed under the
Exchange Act or (y) after the period set forth in Section 6(i) of this
Agreement, amending the Registration Statement or filing a prospectus;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver
to the Underwriter an earnings statement of the Company and its
subsidiaries (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 three years following the Effective Date, to
furnish to the Underwriter copies all materials furnished by the
Company to its stockholders 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; provided however that the Company shall not
be required to provide the Underwriter with any such reports,
registration statements or similar forms that have been filed with the
Commission by electronic transmission pursuant to XXXXX;
(h) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Underwriter 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;
(i) Prior to the Effective Date, to apply, to the extent
necessary, for the listing of the Stock on the New York Stock Exchange
and to use its best efforts to complete that listing, subject only to
official notice of issuance, prior to the Delivery Date;
(j) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become 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; and
(k) To not directly or indirectly take any action designed to or
which has constituted or which might reasonably be expected to cause
or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Stock.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees:
(a) For a period of 45 days from the date of the Prospectus not
to (1) offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the Stock) or (2)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, without the
prior written consent of the Underwriter;
(b) That the Stock to be sold by the Selling Stockholder
hereunder is subject to the interest of the Underwriter and the other
Selling Stockholders hereunder, and that the Selling Stockholders
shall not, directly or indirectly, take any action that may terminate
its obligations hereunder (other than the termination of this
Agreement); and
(c) To deliver to the Underwriter on or prior to the Delivery
Date a properly completed and executed United States Treasury
Department Form W-9.
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 producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the filing fees incident to securing any required
review by the NASD of the terms of sale of the Stock; (f) any applicable listing
or other fees; (g) all other costs and expenses incident to the performance of
the obligations of the Company and the Selling Stockholders under this Agreement
except that the discount to the Underwriter for the purchase of the Stock shall
be borne by the Selling Stockholders; provided that, except as provided in this
Section 8 and in Section 13 below the Underwriter shall pay its own costs and
expenses, including the costs and expenses of its counsel, any transfer taxes on
the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriter, and, as between the Underwriter and the
Selling Stockholders only, each of the Selling Stockholders shall pay the fees
and expenses of his or its counsel, any custodian (and any other
attorney-in-fact), and any transfer taxes payable in connection with his or its
respective sales of Stock to the Underwriter; and provided further, that the
provisions of this Section 8 shall not affect any agreement that the Company and
any Selling Stockholder may have entered into, or may hereafter enter into, with
respect to the sharing or reimbursement of any of the foregoing costs and
expenses.
9. Conditions of Underwriter's Obligations. The respective obligations
of the Underwriter hereunder are subject to the accuracy, when made and on the
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) above; 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 the Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Xxxxxx
& Xxxxxx L.L.P., counsel for the Underwriter, is material or omits to
state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, 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 material respects to counsel
for the Underwriter, 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) Jenkens and Xxxxxxxxx, A Professional Corporation, shall have
furnished to the Underwriter its written opinion, as counsel to the
Company, addressed to the Underwriter and dated the Delivery Date, in
form and substance reasonably satisfactory to the Underwriter, to the
effect that:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations or limited
liability companies, as the case may be, in good standing under
the laws of their respective jurisdictions of incorporation or
formation, are duly qualified to do business and are in good
standing as foreign corporations or limited liability companies
in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses
requires such qualification, (other than where the failure to so
qualify or be in good standing as a foreign corporation would not
have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operation or business
of the Company and its subsidiaries, taken as a whole), and have
all power and authority necessary to own or hold their respective
properties and conduct the businesses described in the
Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, 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 and conform to the
description thereof contained in the Prospectus; and all of the
issued shares of capital stock (or the equivalent) of each
subsidiary of the Company have been duly and validly authorized
and issued and are fully paid, non-assessable and (except for any
directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities
or claims;
(iii) The shares of the Stock being delivered on the
Delivery Date to the Underwriter hereunder have been duly and
validly authorized and validly issued and are fully paid and
non-assessable;
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any shares of the
Common Stock (including the Stock) pursuant to the Company's
charter or by-laws or any agreement or other instrument filed as
an exhibit to one of the Company's periodic reports under the
Exchange Act;
(v) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries, taken as a whole; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such
counsel's opinion, 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 no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company
prior to the Delivery Date (except for the financial statements
and financial schedules and other financial and related reserve
information included therein, as to which such counsel need
express no belief) comply as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations, and the documents incorporated by reference in the
Prospectus when they where filed with the Commission (except for
the financial statements and financial schedules and other
financial and related reserve information included therein, as to
which such counsel need express no belief) complied as to form in
all material respects with the requirements of the Exchange Act
and the Rules and Regulations;
(viii) The statements contained in the Prospectus under the
heading "Description of Capital Stock" insofar as such statements
refer to statements of law, descriptions of statutes, rules or
regulations or legal conclusions, are accurate and fair summaries
of such statements of law, descriptions of statutes, rules or
regulations or legal conclusions;
(ix) To such counsel's knowledge, 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 or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the Rules
and Regulations;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The compliance by the Company with all of the
provisions of this Agreement 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 known to
such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound
or to which any of the material property or assets of the Company
or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries or any statute
or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their 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
Underwriter, 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 and thereby;
(xii) To such counsel's knowledge, except as described or
included in the Prospectus, there are 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;
(xiii) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of
1940, as amended.
In rendering such opinion, such counsel may state that (x) their
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of Texas and the General Corporation Law of
the State of Delaware, and that such counsel is not admitted in Delaware and (y)
insofar as the foregoing opinions relate to the valid existence and good
standing of the Company and its subsidiaries, they are based solely on
certificates of authorities in the states of organization of the Company and
such subsidiaries that such counsel received in response to such counsel's
requests for confirmation of the existence and good standing of the Company and
such subsidiaries in such states, copies of which certificates have been
furnished to you, and, in rendering the opinion set forth in opinion (i) above
with respect to the qualification and the good standing as a foreign corporation
of the Company and such subsidiaries, such counsel has relied solely on
certificates such counsel received from the states necessary to give such
opinion that such counsel received in response to such counsel's requests for
confirmation of such qualification and good standing, as the case may be, of the
Company and such subsidiaries in such states, copies of which certificates have
been furnished to you.
Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Delivery Date, in form and
substance reasonably satisfactory to the Underwriter, to the effect that (x)
such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead them to believe that
the Registration Statement (except for the financial statements and related
schedules and other financial data, and reserve information included therein, as
to which such counsel need express no belief) as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (except as stated above) contains
any untrue statement of a material fact 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. 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, except
for the statements made in the Prospectus under the caption "Description of
Capital Stock" insofar as such statements relate to the Stock and concern legal
matters.
(e) Cleary, Gottlieb, Xxxxx & Xxxxxxxx shall have furnished to
the Underwriter its written opinion, as counsel to each of the Selling
Stockholders, addressed to the Underwriter and dated the Delivery
Date, in form and substance reasonably satisfactory to the
Underwriter, to the effect that:
(i) Each of the Selling Stockholders has been duly formed as
a limited partnership under the Delaware Revised Uniform Limited
Partnership Act, 6 Del. Sec. 17-101 et. seq. and is validly
existing and in good standing under the laws of the State of
Delaware.
(ii) Each Selling Stockholder has the partnership power to
enter into this Agreement and to perform its obligations
thereunder;
(iii) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary partnership
action of each Selling Stockholder. The Underwriting Agreement
has been duly executed and delivered by each Selling Stockholder;
(iv) The execution and delivery by each Selling Stockholder
of this Agreement and the performance of its obligations
hereunder (a) do not require any consent, approval,
authorization, registration or qualification of or with any
governmental authority of the United States of America or the
State of New York, except such as may be required under the
Securities Act of 1933 and the Securities Exchange Act of 1934
(but without expressing an opinion as to any consent, approval,
authorization, registration or qualification that may be required
under state securities or Blue Sky laws), (b) do not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any of the constituent documents of
the Selling Stockholder and (c) do not violate the terms of any
New York State or United States federal law or regulation of the
Delaware Partnership Act (but without expressing any opinion with
respect to United States federal securities laws or any state
securities or Blue Sky laws).
(v) Assuming the Underwriter acquires its interest in the
Stock to be sold by the Selling Stockholders to the Underwriter
without notice of any adverse claim (within the meaning of the
Uniform Commercial Code as in effect in the State of New York
(the "UCC")) and the Underwriter has paid the purchase price for
such Stock and has had such Stock credited to the securities
account of the Underwriter maintained with The Depository Trust
Company, then the Underwriter will have a securities entitlement
(as defined in Section 8-102(a)(17) of the UCC) to such Stock
purchased by the Underwriter and no action based on an adverse
claim to such Stock credited to such securities account, whether
framed in conversion, replevin, constructive trust, equitable
lien or other theory, may be asserted against the Underwriter.
In rendering such opinion, such counsel may (x) limit the opinion in
section 9(e)(iv) above to those documents received by counsel set forth in an
exhibit to the opinion (which constituent documents shall be certified as true,
complete and correct copies by the Selling Stockholders or their affiliates) and
(y) 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, the Delaware
Revised Uniform Limited Partnership Act and the General Corporation Law of
Delaware and that such counsel is not admitted in Delaware.
(f) The Underwriter shall have received from Xxxxxx & Xxxxxx
L.L.P., counsel for the Underwriter, such opinion or opinions, dated
the Delivery Date, with respect to the issuance and sale of the Stock,
the Registration Statement, the Prospectus and other related matters
as the Underwriter may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(g) At the Delivery Date, the Underwriter shall have received a
letter from Deloitte & Touche LLP, in form and substance satisfactory
to the Underwriter, addressed to the Underwriter and dated the date
hereof (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 hereof (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 hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) At the Delivery Date, the Company shall have furnished to the
Underwriter a letter from XxXxxxxx and XxxXxxxxxxx addressed to the
Underwriter and dated the date of the Delivery Date confirming that
they are, and as of the date of their reports referred to in Section
1(n) hereof were, independent engineers with respect to the Company
and stating, as of the date of such letter, that they have no
knowledge of any fact or event that would cause any change to the
conclusions and findings of such firm at the time made with respect to
the information referred to in Section 1(n) hereof.
(i) The Company shall have furnished to the Underwriter,
addressed to the Underwriter, a certificate, dated the Delivery Date,
of its chief executive officer and its chief financial officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 hereof are true and correct as of the
Delivery Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections 9(a)
and 9(k) hereof have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and Prospectus did not include
any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement
or the Prospectus.
(j) Each Selling Stockholder (or any custodian or one or more
attorneys-in-fact on behalf of each Selling Stockholder) shall have
furnished to the Underwriter on the Delivery Date a certificate, dated
the Delivery Date, signed by, or on behalf of, the Selling Stockholder
(or any custodian or one or more attorneys-in-fact) stating that the
representations, warranties and agreements of the Selling Stockholder
contained herein are true and correct in all material respects as of
the Delivery Date and that the Selling Stockholder has complied with
all agreements contained herein to be performed by the Selling
Stockholder at or prior to the Delivery Date.
(k) (i) Neither the Company nor any of its subsidiaries shall
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 of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity, prospects or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the
judgment of the Underwriter, 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 the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(l) 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 the
Underwriter, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on the Delivery Date
on the terms and in the manner contemplated in the Prospectus.
(m) To the extent required, the New York Stock Exchange shall
have approved the Stock for listing, subject only to official notice
of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the
Underwriter, its officers and employees and each person, if any, who
controls the 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 the 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 (A) any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (B) in any materials or information
provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Stock ("Marketing
Materials"), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically); (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 Marketing Materials 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 the Underwriter in connection
with, or relating in any manner to, the Stock or 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 under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by the Underwriter through its gross negligence or
willful misconduct), and shall reimburse the Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the 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, in reliance upon
and in conformity with written information concerning the Underwriter
furnished to the Company through the Underwriter by or on behalf of
the Underwriter specifically for inclusion therein which consists
solely of information set forth in Section 10(f) hereof; and provided
further, however that the Company shall not be liable to the
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 the Underwriter (or the action in respect
thereof) arises out of a sale by the 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 the 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 the Underwriter or to any officer,
employee or controlling person of the Underwriter.
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless the Underwriter, its officers and
employees, and each person, if any, who controls the 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 the 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, (1) 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 (2) the omission or alleged omission to state in
any Preliminary Prospectus, Registration Statement or the Prospectus,
or in any amendment or supplement thereto, any material fact required
to be stated therein or necessary to make the statements therein not
misleading, in the case of subparagraphs (1) and (2) of this Section
to the extent, but only to the extent, that such 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 or the Underwriter by such Selling Stockholder directly or
through such Selling Stockholder's representatives, specifically for
use in the preparation thereof; and shall reimburse the Underwriter,
its officers and employees and each such controlling person for any
legal or other expenses reasonably incurred by the Underwriter, its
officers and 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; provided, however, that the Selling Stockholders 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 in
reliance upon and in conformity with written information concerning
the Underwriter furnished to the Company by or on behalf of the
Underwriter specifically for inclusion therein which consists solely
of the information specified in Section 10(f) hereof and provided,
further, that with respect to any Preliminary Prospectus, the
foregoing indemnity agreement shall not inure to the benefit of the
Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Stock, or any person controlling the
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to this Agreement and a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on
behalf of the Underwriter to such person, if required by law so to
have been delivered and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or expense. However, in no event shall the
Selling Stockholder be liable under the provisions of this Section 10
for any amount in excess of the total proceeds received by such
Selling Stockholder from the sale of the Stock by such Selling
Stockholder (after deducting commissions, but before taxes and any
other expenses) pursuant to this Agreement. The foregoing indemnity
agreement is in addition to any liability which the Selling
Stockholders may otherwise have to the Underwriter or any officer,
employee or controlling person of the Underwriter.
(c) The Underwriter 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, and each Selling Stockholder and its officers and
employees, each of its directors, and each person if any, who controls
the Selling Stockholder 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 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, or in any Marketing Materials 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 written
information concerning the Underwriter furnished to the Company
through the Underwriter by or on behalf of the Underwriter
specifically for inclusion therein, and shall reimburse the Company,
such Selling Stockholder and any such director, officer or controlling
person of the Company or the Selling Stockholder for any legal or
other expenses reasonably incurred by the Company, such Selling
Stockholder or any such director, officer or controlling person of the
Company or the Selling Stockholder 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 the
Underwriter may otherwise have to the Company, such Selling
Stockholder or any such director, officer, employee or controlling
person of the Company or the Selling Stockholder.
(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 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 Underwriter shall
have the right to employ counsel to represent the Underwriter and its
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 Underwriter against the Company or any
Selling Stockholder under this Section 10 if, in the reasonable
judgment of the Underwriter, it is advisable for the Underwriter,
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 or Selling Stockholders.
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 the consent
of the indemnifying party 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 or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 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 Underwriter on the other from the offering of the Stock 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 Underwriter 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; provided, the Selling Stockholders and the
Underwriter shall be obligated to contribute under this Section 10(e)
only with respect to losses, liabilities, claims, damages or expenses
arising out of an untrue statement or omission or alleged untrue
statement or omission of a material fact made in reliance upon and in
conformity with the written information furnished to the Company or
the Underwriter or any Selling Stockholder, as the case may be, by the
Underwriter or the Selling Stockholders directly or through such
Selling Stockholder's representatives, as the case may be,
specifically for use in the preparation of any Preliminary Prospectus,
Registration Statement or the Prospectus or in any amendment or
supplement thereto. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriter on the
other with 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 Company and the Selling Stockholders, on the one hand, and the
total underwriting discounts and commissions received by the
Underwriter 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
Underwriter, 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
Underwriter 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 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 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), (i) the Underwriter shall not 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 the
Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission
and (ii) no Selling Stockholder shall be required to contribute any
amount in excess of the total proceeds received by such Selling
Stockholder from the offering of the Stock by such Selling Stockholder
(after deducting commissions, but before taxes and any other
expenses). 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.
(f) The Underwriter confirms and the Company acknowledges that
the statements with respect to the public offering of the Stock by the
Underwriter set forth on the cover page of, the name of the
Underwriter and its participation in the sale of Stock under the
caption "Underwriting" in, and the paragraphs addressing the
underwriting discount, concessions and reallowances, stabilization,
short positions, syndicate transactions and penalty bids appearing
under the caption "Underwriting" in, the Prospectus are correct and
constitute the only information concerning the Underwriter furnished
in writing to the Company by or on behalf of the Underwriter
specifically for inclusion in the Registration Statement and the
Prospectus.
11. [Section Intentionally Omitted]
12. Termination. The obligations of the Underwriter hereunder may be
terminated by the Underwriter by notice given to and received by the Company and
the Selling Stockholders prior to delivery of and payment for the Stock if,
prior to that time, any of the events described in Sections 9(k) or 9(l) hereof,
shall have occurred or if the Underwriter shall decline to purchase the Stock
for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If any Selling
Stockholder shall fail to tender the Stock for delivery to the Underwriter by
reason of any failure, refusal or inability on the part of the Company or any
Selling Stockholder to perform any agreement on its part to be performed, or
because any other condition of the Underwriter's obligations hereunder required
to be fulfilled by the Company or the Selling Stockholders is not fulfilled, the
Company will reimburse the Underwriter for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) incurred by the
Underwriter in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Company shall pay the full amount thereof to the
Underwriter. If this Agreement is terminated pursuant to Section 12 hereof by
reason of the default of the Underwriter, neither the Company nor the Selling
Stockholders shall be obligated to reimburse the Underwriter on account of those
expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail,
telex or facsimile transmission to CIBC World Markets Corp., 000 0xx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxxxxx (Fax : 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail, telex,
facsimile transmission or recognized overnight delivery service to the
address of the Company set forth in the Registration Statement,
Attention: Xxxx Xxxxxxx (Fax: (000) 000-0000); and
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex, facsimile transmission or recognized overnight delivery
service to such Selling Stockholder at the address set forth on
Schedule 2 hereto;
provided, however, that any notice to the Underwriter pursuant to Section 10(d)
above shall be delivered or sent by mail, telex, facsimile transmission or
recognized overnight delivery service to the Underwriter at its address set
forth in its acceptance telex to the Underwriter, which address will be supplied
to any other party hereto by the Underwriter upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company and the Underwriter shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the Selling
Stockholders by a custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Company, the
Selling Stockholders and their respective personal representatives and
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 person or
persons, if any, who control the 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 of the Company, directors or general partners of the Selling
Stockholders, as the case may be, officers of the Company who have signed the
Registration Statement and any person controlling the Company or a Selling
Stockholder 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 15, 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 Underwriter
contained in this Agreement or made by or on behalf on 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 Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the
American Stock Exchange is open for trading and (b) "subsidiary" has the meaning
set forth in Rule 405 of the Rules and Regulations.
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.
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.
If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholders and the Underwriter, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
Denbury Resources Inc.
By:
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
The Selling Stockholders named in
Schedule 2 to this Agreement:
TPG Partners, L.P.
By: TPG GenPar, L.P., general partner
By: TPG Advisors, Inc.,
general partner
By:
-------------------------
Name:
Title:
TPG Parallel I, L.P.
By: TPG GenPar, L.P., general partner
By: TPG Advisors, Inc.,
general partner
By:
-------------------------
Name:
Title:
TPG Partners II, L.P.
By: TPG GenPar II, L.P.,
general partner
By: TPG Advisors II, Inc.
By:
-------------------------
Name:
Title:
TPG Parallel II, L.P.
By: TPG GenPar II, L.P.,
general partner
By: TPG Advisors II, Inc.
By:
-------------------------
Name:
Title:
TPG Investors II, L.P.
By: TPG GenPar II, L.P.,
general partner
By: TPG Advisors II, Inc.
By:
-------------------------
Name:
Title:
TPG 1999 Equity Partners II, L.P.
By: TPG Advisors II, Inc.
By:
-----------------------------------
Name:
Title:
Accepted:
CIBC WORLD MARKETS CORP.
By:
----------------------------------
Authorized Representative
SCHEDULE 1
Number of Shares of Stock
Name of Underwriter to be Purchased
------------------- ---------------
CIBC World Markets Corp................................ 8,000,000
SCHEDULE 2
Name and address of Selling Stockholder Number of Shares of Stock
--------------------------------------- -------------------------
TPG Partners, L.P. (1) 2,326,306
TPG Parallel I, L.P. (1) 231,834
TPG Partners II, L.P. (1) 4,636,581
TPG Parallel II, L.P. (1) 316,412
TPG Investors II, L.P. (1) 483,643
TPG 1999 Equity Partners II, L.P. (1) 5,224
---------
Total 8,000,000
=========
-----------
(1) The address for such Selling Stockholder is 000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxx Xxxxx, Xxxxx 00000, Attn: Xxxxxxx X. Xxxxxxxxx.
