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EXHIBIT 1.1
Basic Energy Services, Inc.
3,700,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
________ ___, 2000
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXX & COMPANY
XXXXXXX & COMPANY INTERNATIONAL
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Basic Energy Services, Inc., a Delaware corporation (the "Company"),
hereby confirms its agreement with the several underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters. In addition, Southwest Royalties
Holdings, Inc. ("SRH") is a party to this Underwriting Agreement for purposes of
Sections 8 and 8A.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an aggregate
of 3,700,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $.01 per share ("Common Stock"). The Company also proposes to issue and
sell to the several Underwriters not more than 555,000 additional shares of
Common Stock if requested by the Representatives as provided in Section 3 of
this Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities". As part of the offering contemplated by
this Agreement, the representatives have agreed to reserve out of the Firm
Securities purchased by them up to 185,000 shares (the "Directed Shares") for
sale to the Company's directors, officers, employees and other parties
associated with the Company (each, individually a "Participant" and
collectively, the "Participants") under the terms of the friends and family
directed share program (the "Directed Share Program").
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(1) Plus an option to purchase from Sierra Well Service up to 555,000
additional shares to cover over-allotments.
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Shares to be sold pursuant to the Directed Share Program shall be sold pursuant
to this Agreement at the public offering price. Any Directed Share not confirmed
for purchase by a Participant, under the Directed Share Program procedures, will
be offered to the public by the Representatives as set forth in the Prospectus
(as such term is hereinafter defined).
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) A registration statement on Form S-1 (File No. 333-33108) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the Representatives,
prior to the execution of this Agreement, or (ii) if such registration
statement, as it may have been amended, has not been declared by the Commission
to be effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been furnished to
and approved by the Representatives, prior to the execution of this Agreement.
The Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
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(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective) and
on the Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (b) do not
apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
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(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(d) The Company has no subsidiaries. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware. The Company is duly qualified to transact
business as a foreign corporation and is in good standing under the laws of all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification and in which the failure to
be so qualified would have a material adverse effect on the business of the
Company.
(e) The Company has full corporate power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement and the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus; and the Company has full corporate power and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the outstanding shares
of capital stock of the Company have been duly authorized and validly issued,
and are fully paid and nonassessable. The Firm Securities and the Option
Securities have been duly authorized and at the Firm Closing Date or the related
Option Closing Date (as the case may be), when issued and delivered for payment
therefor in accordance herewith, will be validly issued, fully paid and
nonassessable. No holders of outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other rights to subscribe for any of
the Securities, and no holder of securities of the Company has any right which
has not been fully exercised or waived to require the Company to register the
offer or sale of any securities owned by such holder under the Act in the public
offering contemplated by this agreement.
(g) The capital stock of the Company conforms to the description
thereof under the caption "Description of Capital Stock" contained in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(h) Except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no outstanding
(A) securities or obligations of the Company convertible into or exchangeable
for any capital stock of the Company, (B) warrants, rights or options to
subscribe for or purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations of the
Company to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options.
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(i) The financial statements and schedules of the Company included in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position of the Company and the results of operations and changes in financial
condition as of the dates and periods therein specified. Such financial
statements and schedules have been prepared in accordance with United States
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Information" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein. The pro
forma financial statements included in the Prospectus present fairly the
information shown therein and have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been compiled on the pro forma bases described therein and, in
the opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein. The other financial and
statistical information and data included in the Prospectus, derived from the
historical and pro forma financial statements, are accurately presented in all
material respects.
(j) KPMG Peat Marwick LLP, who has certified the financial statements
of the Company and delivered their report with respect to the audited
consolidated financial statements and schedules included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), is an independent public accountant as
required by the Act and the applicable rules and regulations thereunder.
(k) The execution and delivery of this Agreement have been duly
authorized by the Company. This Agreement has been duly executed and delivered
by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other laws affecting creditors' rights
generally, or by equitable principles.
(l) No legal or governmental proceedings are pending to which the
Company is a party or to which the property of the Company is subject that are
required to be described in the Registration Statement or the Prospectus and are
not described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and, and, to the Company's knowledge, no such
proceedings have been threatened against the Company or with respect to any of
its properties. There is no contract or other document of a character required
by the Act or the rules and regulations thereunder to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that has not been described therein (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or filed
as required.
(m) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, (except such as have been obtained, such as may be required by the
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National Association of Securities Dealers, Inc. (the "NASD"), such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities is not effective under the Act as
of the time of execution hereof, such as may be required (and shall be obtained
as provided in this Agreement) under the Act, or (ii) conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute a
default under, (A) any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company is a party or by which the Company
or any of its properties are bound, (B) the certificate of incorporation or
by-laws of the Company, or (C) any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any arbitrator
applicable to the Company.
(n) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, the Company has not sustained
any material loss or interference with its business or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding and
there has not been any material adverse change, or any development involving a
prospective material adverse change, in the business affairs, properties,
condition (financial or otherwise), business prospects, net worth, or results of
the operations of the Company ("Material Adverse Change"), except in each case
as described in or contemplated by the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus.
(o) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(p) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and sale of
the Securities other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any permitted by the Act.
(q) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), except as is otherwise
disclosed in or contemplated by the Registration Statement or the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus):
(1) the Company has not incurred any material liability or
obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business;
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(2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and
(3) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company.
(r) The Company has good and indefeasible title in fee simple to all
items of real property and good title to all personal property described in the
Prospectus or the financial statements included in the Prospectus as being owned
by the Company, free and clear of any security interests, liens, encumbrances,
changes or claims, except where the failure to hold such title or the existence
of such security interests, liens, encumbrances, changes or claims not
materially and adversely affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the Company. Except
as described in or contemplated by the Prospectus, any real property and
buildings held under lease by the Company are held under valid and binding
leases, except as to those leases which are not material to the Company or the
lack of enforceability of which would not interfere with the use made or
proposed to be made of such leased property by the Company.
(s) No labor dispute with the employees of the Company exists or, to
the Company's knowledge, is threatened or imminent that could reasonably be
expected to result in a Material Adverse Change except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(t) The Company owns or possesses, or can acquire on reasonable terms,
all material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential information
currently employed by them in connection with its business, and the Company has
not received any notice of infringement of or conflict with asserted rights of
any third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Change, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(u) The Company maintains insurance, which is in full force and effect,
against such losses and risks and in such amounts as are prudent and customary
in the business in which it is engaged. The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not result in a
Material Adverse Change.
(v) The Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business, and the Company has not received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
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(w) The Company has conducted its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and the sale of the Common Stock offered hereby will
not cause the Company to become an investment company subject to registration
under such Act.
(x) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith.
(y) The Company is not in violation of any federal or state law or
regulation relating to occupational safety and health or to the storage,
handling or transportation of hazardous or toxic materials; the Company has
received all permits, licenses or other approvals required of it under
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct its business; the Company is in compliance with
all terms and conditions of any such permit, license or approval, except in each
case any such violation of law or regulation, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which would not, singly or in
the aggregate, result in a Material Adverse Change.
(z) Each certificate which expressly references this Agreement is
signed by any officer of the Company and is delivered to the Representatives or
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
(aa) The Company does not own any shares of stock or any other equity
securities of any corporation or any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus.
(bb) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(cc) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company is a party
or by which the Company or any of its properties is bound or may
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be affected in any material adverse respect with regard to property, business or
operations of the Company, except as will be cured or of no consequence after
giving affect to the use of proceeds from the insurance of Common Stock pursuant
to this Agreement.
(dd) The execution and delivery of the purchase agreements, as amended,
relating to the acquisitions of Turn Around Trucking, Inc., Sundown Operating,
Inc., Xxxxxx Well Servicing Co., Inc., Gold Star Service Company, Inc., Trinity
Services, and Xxxxxxxx Well Service, Inc. (the "Acquisition Documents") have
been duly authorized by all necessary corporate action of the Company. The
Acquisition Documents have been duly executed and delivered by the Company and
the other parties thereto, and on the Firm Closing Date the transactions
contemplated thereby shall have been consummated. On and as of the Firm Closing
Date, each Acquisition Document shall be in full force and effect and shall
constitute the valid and binding agreement between the parties and shall be
enforceable against the Company and the other parties thereto in accordance with
its terms, except as may be limited by bankruptcy, insolvency and other laws
affecting creditors' rights generally, or by equitable principles. The
Underwriters and their counsel have been provided with true and complete copies
of the Acquisition Documents and all schedules, exhibits, amendments and related
agreements, and the Acquisition Documents conform in all material respects to
the description thereof in the Prospectus.
(ee) To the knowledge of the Company, each of the representations and
warranties of the other parties to the Acquisition Documents are true and
correct as of the date of this agreement and the Company, and to the knowledge
of the Company, the other parties have performed or complied in all material
respects with all covenants and agreements contained in the Acquisition
Documents that are required to be performed or complied with prior to the date
hereof. There exist no conditions that would constitute a default (or an event
which with notice or the lapse of time, or both, would constitute a default)
under any of the Acquisition Documents. Except for the consummation of the sale
of the Firm Securities and the delivery of the consideration by the Company as
contemplated by the Acquisition Documents, all of the material conditions to the
consummation of the transactions contemplated by the Acquisition Documents have
been met as of the date hereof.
(ff) The execution and delivery of the Stockholders' Agreement by and
between the Company, Joint Energy Development Investments II Limited Partnership
("JEDI") and certain other parties thereto dated March 21, 2000 (the
"Stockholders' Agreement") has been duly authorized by all necessary corporate
action of the Company, has been duly executed and delivered by the Company and
the other parties thereto, is in full force and effect and constitutes the valid
and binding agreement of the parties thereto and is enforceable against the
Company and the other parties thereto in accordance with its terms, except as
may be limited by bankruptcy, insolvency and other laws affecting creditors'
rights generally, or by equitable principles. The Underwriters and their counsel
have been provided with true and complete copies of the Stockholders Agreement
and all schedules, exhibits, amendments and related agreements and the
Stockholders Agreement conforms in all material respects to the description
thereof in the Prospectus.
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(gg) The execution and delivery of the First Amendment to Loan
Agreement among the Company, JEDI, and Enron North America Corp. dated as of
March 21, 2000 (the "Loan Agreement Amendment") has been duly authorized by all
necessary corporate action of the Company, has been duly executed and delivered
by the Company and the other parties thereto, is in full force and effect and
constitutes the valid and binding agreement of the parties thereto and is
enforceable against the Company and the other parties thereto in accordance with
its terms, except as may be limited by bankruptcy, insolvency and other laws
affecting creditors' rights generally, or by equitable principles. The
Underwriters and their counsel have been provided with true and complete copies
of the Loan Agreement Amendment and all schedules, exhibits, amendments and
related agreements and the Loan Agreement Amendment conforms in all material
respects to the description thereof in the Prospectus.
(hh) The Company has entered into a credit facility with The CIT
Group/Business Credit, Inc., and the execution and delivery of the credit
facility has been duly authorized by all necessary corporate action of the
Company, has been dully executed and delivered by the Company and each of the
other parties thereto, is in full force and effect and constitutes the valid and
binding agreement of the parties thereto and is enforceable against the Company
and the other parties thereto in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other laws affecting creditors' rights
generally, or by equitable principles. All of the conditions to the initial
funding, except for the consummation of the offering of the Firm Securities to
the public, will be satisfied on the Firm Closing Date and the initial funding
under the terms of the credit facility will be completed on or before the Firm
Closing Date. The Underwriters and their counsel have been provided with true
and complete copies of the credit facility and all schedules, exhibits,
amendments and related agreements and the credit facility conforms in all
material respects to the description thereof in the Prospectus.
(ii) No registration under the Act or the Investment Company Act, and
no consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the issuance of
the Common Stock of the Company pursuant to and as contemplated by the
Acquisition Documents.
(jj) Neither the Company or any other person associated with or acting
on behalf of the Company including, without limitation, any director, officer or
employee of the Company has offered or caused the Underwriters to offer any of
the Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $________ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for
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the Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Representatives request upon notice to the Company at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company to the Representatives for the respective accounts of the Underwriters,
against payment by or on behalf of the Underwriters of the purchase price
therefor by wire transfer in same-day funds (the "Wired Funds") to the account
of the Company. Such delivery of and payment for the Firm Securities shall be
made at the offices of Xxxxxx & Xxxxxx L.L.P., 2300 First City Tower, 0000
Xxxxxx, Xxxxxxx, Xxxxx 00000-0000 at 9:30 A.M., New York time, on __________,
2000, or at such other place, time or date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificate
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least 24
hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate number of Option Securities as to which the several Underwriters are
then exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and Company
may agree upon or as the Representatives may determine pursuant to Section 9
hereof, is herein called the "Option Closing Date" with respect to such Option
Securities. Upon exercise of the option as provided herein, the Company shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from the Company, the same
percentage of the total number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a)
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of this Section 3, except that reference therein to the Firm Securities and the
Firm Closing Date shall be deemed, for purposes of this paragraph (b), to refer
to such Option Securities and Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution and
delivery of a receipt for Securities by the Underwriters indicates completion of
the closing of a purchase of the Securities from the Company. Furthermore, in
the event that the Underwriters wire funds to the Company prior to the
completion of the closing of a purchase of Securities, the Company hereby
acknowledges that until the Underwriters execute and deliver a receipt for the
Securities, by facsimile or otherwise, the Company will not be entitled to the
Wired Funds and shall return the Wired Funds to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the event that
the closing of a purchase of Securities is not completed and the Wired Funds are
not returned by the Company to the Underwriters on the same day the Wired Funds
were received by the Company, the Company agrees to pay to the Underwriters in
respect of each day the Wired Funds are not returned by it, in same-day funds,
interest on the amount of such Wired Funds in an amount representing the
Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required, the
Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required to
be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the
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Registration Statement or any Rule 462(b) Registration Statement of which the
Representatives previously have been advised and furnished with a copy for a
reasonable period of time prior to the proposed filing and as to which filing
the Representatives shall not have given their consent. The Company will prepare
and file with the Commission, in accordance with the rules and regulations of
the Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of the Securities by the several Underwriters, and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective by the Commission as promptly as possible. The Company
will advise the Representatives, promptly after receiving notice thereof, of the
time when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such United
States jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall in no event be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
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(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (B) 2:00 P.M., New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available
to its security holders and to the Representatives an earnings statement that
satisfies the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 180 days after the date hereof, except (1) pursuant to this
Agreement, (2) for issuances pursuant to the exercise of employee and director
stock options outstanding on the date hereof, (3) pursuant to the terms of
convertible securities of the Company outstanding on the date hereof, (4) for
the grants of options to purchase shares of Common Stock pursuant to option
plans existing on the date hereof and (5) for the acquisitions described in the
Prospectus.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(j) The Company will obtain the agreements described in Section 7(g)
hereof prior to the Firm Closing Date.
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(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you and to the Company, responding to or commenting
on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on the
date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Company will use its best efforts to cause the Securities to be
duly included for quotation on The Nasdaq Stock Market's National Market (the
"Nasdaq National Market") prior to the Firm Closing Date. The Company will use
its reasonable efforts to cause the Securities to remain included for quotation
on the Nasdaq National Market or to relist the Common Stock on a national
exchange following the Firm Closing Date.
(n) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of 3
months following the date of the effectiveness of the Registration Statement.
Prudential Securities will notify the Company as to which Directed Shares will
need to be restricted under NASD rules. The Company will direct the transfer
agent to place stop transfer restrictions on such securities for such period of
time.
6. Expenses. (a) The Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and reasonable fees and disbursements of counsel for the
Underwriters relating thereto, (vi) the filing fees of the Commission and the
National Association of Securities Dealers, Inc. relating to the Securities,
(vii) any quotation of the Securities on the Nasdaq
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National Market, (viii) any expenses of the Company's officers in connection
with any meetings with prospective investors in the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters), (ix) advertising relating to the offering of the Securities
that has been requested by the Company (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters), and (x) the fees and disbursements of counsel for the
Underwriters in connection with the matters relating to the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if any
incurred by the Underwriters in connection with the Directed Share Program.
(b) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been reasonably incurred by them in connection
with the proposed purchase and sale of the Securities. The Company shall not in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or the Representatives, shall be contemplated by the Commission; and the
Company shall have
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complied with any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx & Xxxxx L.L.P., counsel for the Company, to the effect
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of Texas.
(ii) the Company has the requisite corporate power to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform
its obligations under this Agreement;
(iii) the Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus under the caption
"Capitalization"; all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable and have been issued in compliance with all
applicable federal and state securities laws and, to the knowledge of
such counsel, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase
securities;
(iv) the Firm Securities to be purchased by the Underwriters
have been duly authorized by all necessary corporate action of the
Company for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; to the knowledge of such counsel, except for
such rights as have been waived as of the date hereof, no holders of
outstanding shares of capital stock of the Company are entitled as such
to any preemptive or other rights to subscribe for any of the
Securities; and no holders of securities of the Company are entitled to
have such securities registered under the Registration Statement other
than those holders who have waived such rights;
(v) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the capital stock of the Company,
provide a fair summary of such provisions; and the statements set forth
under the headings "The Company - Current Acquisitions" and "Business
-- Environmental Regulation" in the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of such legal
matters, documents and proceedings;
(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company, and
this Agreement has been duly executed and delivered by the Company;
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(vii) to the knowledge of such counsel, (A) no legal or
governmental proceedings are pending to which the Company is a party or
to which the property of the Company is subject that are required by
the Act or the rules and regulations thereunder to be described in the
Registration Statement or the Prospectus and are not described therein,
and no such proceedings have been threatened against the Company or
with respect to any of its properties that might reasonably be expected
to have a Material Adverse Effect and (B) no contract or other document
is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement
and the consummation of the other transactions herein contemplated do
not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required by the NASD or under
state securities or blue sky laws, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (1) any agreement included as an exhibit to
the registration statement, (2) or the charter documents or by-laws of
the Company , or (3) any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company , except
where any such conflict, breach, violation or default would not, singly
or in the aggregate, result in a Material Adverse Change;
(ix) the Registration Statement has been declared effective
under the Act; any required filing of the Prospectus, or any Term Sheet
that constitutes a part thereof, pursuant to Rules 434 and 424(b) has
been made in the manner and within the time period required by Rules
434 and 424(b) and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued under the Act, and no proceedings for
that purpose have been instituted or threatened or, to the knowledge of
such counsel, are contemplated by the Commission;
(x) the Registration Statement , when it became effective, and
the Prospectus and any amendments thereof or supplements thereto (in
each case, other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion) , on the date of filing or the date thereof, complied as to
form in all material respects with the applicable requirements of the
Act and the rules and regulations of the Commission thereunder;
(xi) if the Company elects to rely on Rule 434, the Prospectus
is not "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time of
its effectiveness or an effective post-effective
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amendment thereto (including such information that is permitted to be
omitted pursuant to Rule 430A);
(xii) The execution and delivery of the Stockholders'
Agreement has been duly authorized by all necessary corporate action of
the Company, and has been duly executed and delivered by the Company;
(xiii) The execution and delivery of the Loan Agreement
Amendment has been duly authorized by all necessary corporate action of
the Company, and has been duly executed and delivered by the Company;
and
(xiv) The execution and delivery of the credit facility has
been duly authorized by all necessary corporate action of the Company,
and has been duly executed and delivered by the Company.
Such counsel shall make the statements set forth in the following paragraph: We
have not verified, and are not passing upon and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except to the extent expressly stated
herein). We have, however, reviewed and discussed such statements with certain
officers of the Company, with representatives of KPMG Peat Marwick LLP,
independent public accountants for the Company, with attorneys at Xxxx & Xxxx,
L.L.P., counsel for the Company, and with the representatives of the
Underwriters. In the course of such review and discussions, nothing has come to
our attention that would lead us to believe that the Registration Statement
(except for financial statements and notes thereto and related schedules and
other financial data included or incorporated by reference therein or omitted
therefrom, as to which we make no statement), at the time such Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and notes
thereto and related schedules and other financial data included or incorporated
by reference therein or omitted therefrom, as to which we make no statement), at
the time the Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the Firm Closing Date, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dating the Firm
Closing Date, of Xxxx & Xxxx, L.L. P. to the effect that:
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(i) the execution and delivery of the Acquisition Documents have been
duly authorized by all necessary corporate action of the Company, and
they have been duly executed and delivered by the Company; and
(ii) no registration under the Act or the Investment Company Act, and
no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issuance of the Common Stock of the Company pursuant
to and as contemplated by the Acquisition Documents.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx & Xxxxxx L.L.P., counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Representatives shall have received from KPMG Peat Marwick LLP
a letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the
Company within the meaning of the Act and the applicable rules and
regulations thereunder;
(ii) in their opinion, the audited financial statements and
schedules and pro forma financial statements examined by them and
included in the Registration Statement and the Prospectus comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(iii) on the basis of a reading of the latest available
interim unaudited financial statements of the Company , carrying out
certain specified procedures (which do not constitute an examination
made in accordance with generally accepted auditing standards) that
would not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (iii), a reading of the minute
books of the shareholders, the board of directors and any committees
thereof of the Company , and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements of the Company
included in the Registration Statement and the Prospectus do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial statements included in the Registration Statement and
the Prospectus; and
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(B) at a specific date not more than five business
days prior to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company or any decreases in not
current assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts shown on
the March 31, 2000 unaudited balance sheet included in the Registration
Statement and the Prospectus, or for the period from April 1, 2000 to
such specified date there were any decreases, as compared with the
comparable period in 1999, in sales, net revenues, net income before
income taxes or total or per share amounts of net income of the Company
, except in all instances for changes, decreases or increases set forth
in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and are included in the Registration Statement
and the Prospectus under the captions "Summary Historical and Pro Forma
Financial Information," "Summary Operating Data," "Dilution,"
"Capitalization," and "Selected Consolidated Financial Data" and in
certain other indicated portions of the Registration Statement and in
Exhibit 11 to the Registration Statement, and have compared such
amounts, percentages and financial information with such records of the
Company and with information derived from such records and have found
them to be in agreement, excluding any questions of legal
interpretation; and
(v) on the basis of a reading of the unaudited pro forma
combined financial statements included in the Registration Statement
and the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (v), inquiries of certain
officials of the Company and Turnaround Trucking, Inc., Sundown
Operating Company, Inc., Xxxxxx Well Service Company, Gold Star Service
Company, Inc., Trinity Services and Xxxxxxxx Well Service, Inc. who
have responsibility for financial and accounting matters and proving
the arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the unaudited pro forma combined financial
statements, nothing came to their attention that caused them to believe
that the unaudited pro forma combined financial statements do not
comply in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
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References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to
the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, and
except as described in or contemplated by the Prospectus the Company has not
sustained any material loss or interference with its business or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development involving
a prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results of operations
of the Company.
(g) The Representatives shall have received from each person who is a
director or officer of the Company or who owns any shares of Common Stock an
agreement to the effect that such person will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 180 days after the date of this Agreement.
(h) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
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(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been listed for quotation on the Nasdaq National Market.
(j) Each of the acquisition transactions contemplated by the
Acquisition Documents shall have been consummated pursuant to and in accordance
with the Acquisition Documents.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution. (a) The Company and, subject to
the further provisions of Section 8(e) and limited to clauses (i) - (iii) of
Section 8(a), SRH jointly and severally agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Securities Exchange
Act of 1934 (the "Exchange Act"), against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application");
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading;
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(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on behalf
of the Company including, without limitation, slides, videos, films,
tape recordings, used in connection with the marketing of the
Securities, including, without limitation, statements communicated to
securities analysts employed by the Underwriters; or
(v) any untrue statement or alleged untrue statement of a
material fact included in the Prospectus or material distributed in, in
connection with the reservation and sale of the Directed Share Program
to directors, officers and employees of the Company or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, when considered in conjunction with the Prospectus
or Preliminary Prospectus, not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither the Company nor SRH
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement or any amendment thereto, any Preliminary Prospectus, or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and provided, further,
that neither the Company nor SRH will be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(d) and (e) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company or SRH may otherwise have. Neither
the Company nor SRH will, without the prior written consent of the Underwriter
or Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
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(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request, in writing to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of any
director, officer or employee of the Company to pay for and accept delivery of
the Directed Shares which were properly confirmed.
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and
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approval by such indemnified party of counsel appointed to defend such action,
the indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, SRH and the Underwriters agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (e). Notwithstanding any other provision of this paragraph
(e), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the
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aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
II (f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (e), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement or any amendment thereto and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as
the Company.
(f) Notwithstanding anything to the contrary in this Agreement, the
indemnification or contribution obligations of SRH pursuant to Section
8(a)(i)-(iii) or Section 8(e) are subject to the following additional
provisions:
(i) It shall be a condition to the obligation of SRH to
indemnify or make any contribution pursuant to Section 8(a)(i)-(iii) or
Section 8(e) that the Company shall have failed to pay such amount or
otherwise failed to satisfy its obligations set forth in Section 8
within 60 days of notification to SRH by the Underwriters of any claim
for indemnification.
(ii) The liability of SRH shall not exceed the fair market
value at the Closing of the Common Stock in the Company owned by SRH on
the date of the Prospectus; provided, however, that for so long as SRH
is subject to the Indenture (the "Indenture") dated October 17, 1997
among Southwest Royalties, Inc., Southwest Royalties Holdings, Inc. and
State Street Bank and Trust Company, the liability of SRH shall be
measured at the time the Company fails to perform and shall be limited
to the maximum amount allowable under Section 4.10 of the Indenture.
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements
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satisfactory to the Representatives are not made within 36 hours after such
default for the purchase by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives) of the Securities
with respect to which such default occurs, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company other
than as provided in Section 10 hereof. In the event of any default by one or
more Underwriters as described in this Section 9, the Representatives shall have
the right to postpone the Firm Closing Date or the Option Closing Date, as the
case may be, established as provided in Section 3 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company shall have, in the sole judgment of the
Representatives, sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding or there shall have
been any Material Adverse Change, or any development involving a
prospective Material Adverse Change (including without limitation a
change in management or control of the Company), except in each case as
described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either such system or exchange;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
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(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth in
the last paragraph on the front cover page and under the section titled
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to (1) Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; (2) if sent to the Company, to 000 Xxxxx Xxx Xxxxxx,
Xxxxxxx, Xxxxx 00000; and (3) if sent to SRH, to [406] Xxxxx Xxx Xxxxxx,
Xxxxxxx, Xxxxx 00000.
14. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, SRH and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 8 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
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15. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. A copy of any such process so served
shall be mailed by registered mail to the Company at its address provided in
Section 13 hereof; provided, however, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of any Underwriter
to bring proceedings against the Selling Shareholder in the courts of any other
jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
BASIC ENERGY SERVICES, INC.
By
----------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
SOUTHWEST ROYALTIES HOLDINGS, INC.
By
----------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX RICE & COMPANY
XXXXXXX & COMPANY INTERNATIONAL
By PRUDENTIAL SECURITIES INCORPORATED
By
----------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated.......
Xxxxxxx Xxxx & Company.......
Xxxxxxx & Company International.......
---------------
Total ..............
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