Evergreen Resources, Inc.
2,750,000 Shares(1)
Common Stock
FORM OF UNDERWRITING AGREEMENT
_____________, 1997
PRUDENTIAL SECURITIES INCORPORATED
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX INCORPORATED
XXXXXXX, XXXXXX INC.
As a Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Evergreen Resources, Inc., a Colorado corporation (the "Company"), and
the persons named in Schedule 1 hereto (the "Selling Securityholders") hereby
confirm their agreement with the several underwriters named in Schedule 2
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth
below.
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an
aggregate of 2,000,000 shares and the Selling Securityholders propose to sell
to the several Underwriters an aggregate of 750,000 shares (the "Firm
Securities") of the Company's Common Stock, without par value ("Common
Stock"). The Company also proposes to grant to the several Underwriters an
option to purchase not more than 412,500 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".
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, each of
the several Underwriters that:
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(1) Plus an option to purchase from the Company up to 412,500 additional
shares to cover over-allotments.
(i) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"). A registration
statement on such Form (File No. 333__________) 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 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 and,
if required to be filed pursuant to Rules 434(c)(2) and 424(b), an
Integrated prospectus (as hereinafter defined), in either case,
containing such information as is required or permitted by Rule 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 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 (A) all financial schedules
and exhibits thereto, (B) all documents incorporated by reference
therein filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (C) any information omitted therefrom pursuant to
Rule 430A under the Act and included in the Prospectus (as hereinafter
defined) or, if required to be filed pursuant to Rule 434(c)(2) and
424(b), in the Integrated Prospectus; 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), including all documents incorporated by reference
therein filed under the Exchange Act;
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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, including, in the case of clauses (A), (B) or (C) of
this sentence, all documents incorporated by reference therein
filed under the Exchange Act; the term "Integrated Prospectus"
means a prospectus first filed with the Commission pursuant to
Rules 434(c)(2) and 424(b) under the Act; and the Term "Term Sheet"
means any term sheet that satisfies the requirements of Rule 434
under the Act. Any reference in this Agreement to an "amendment or
supplement" to any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or an "amendment" to any registration
statement (including the Registration Statement) shall be deemed to
include any document incorporated by reference therein that is
filed with the Commission under the Exchange Act after the date of
such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be; any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean
the date of such Term Sheet. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment to
a registration statement shall, if such amendment is effected by
means of the filing with the Commission under the Exchange Act of a
document incorporated by reference in such registration statement,
be deemed to refer to the date on which such document was so filed
with the Commission.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus and any amendment or supplement thereto 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, the Exchange Act and the respective 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, the Exchange Act
and the respective 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 Integrated Prospectus or any amendment or supplement
to the Prospectus is filed with the Commission pursuant to
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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), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined),
each of the Prospectus, and, if required to be filed pursuant to Rules
434(c)(2) and 424(b) under the Act, the Integrated 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, the Exchange Act and the respective 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 or any amendment or supplement
thereto, the Registration Statement or any amendment thereto, the
Prospectus or, if required to be filed pursuant to Rules 434(c)(2) and
424(b) and the Act, the Integrated 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.
(iii) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration 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.
(iv) The Company and each of its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws
of their respective jurisdictions of incorporation and are duly
qualified to transact business as foreign corporations and are in good
standing under the laws of all other jurisdictions where the ownership
or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(v) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus and any Integrated Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus;
and the Company has full power (corporate and other) to enter into this
Agreement and to carry out all the terms and provisions hereof to be
carried out by it.
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(vi) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares and
as otherwise set forth in the Prospectus and any Integrated Prospectus
or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus, are owned
beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims.
(vii) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus and
any Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus. All of the issued 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), after 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.
(viii) The capital stock of the Company conforms to the
description thereof contained in the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus.
(ix) Except as disclosed in the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus), there are
not outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(x) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) fairly present the financial
position of the Company and its consolidated subsidiaries 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 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 and
any Integrated Prospectus (or, if the
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Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) fairly present, on the basis stated
in the Prospectus and any Integrated Prospectus (or such Preliminary
Prospectus), the information included therein.
(xi) BDO Xxxxxxx, LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements and
schedules included in the Registration Statement, the Prospectus and
Integrated Prospectus (or, if the Prospectus or any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act,
the Exchange Act and the related published rules and regulations
thereunder.
(xii) The execution and delivery of this Agreement have been duly
authorized by the Company and 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.
(xiii) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the
Company or any of its subsidiaries or with respect to any of their
respective properties; and no contract or if other document is required
to be described in the Registration Statement or the Prospectus or any
Integrated Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus) or filed as required.
(xiv) 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 under state securities or blue
sky laws and, if the registration statement filed with respect to the
Securities (as amended) 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, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator applicable to
the Company or any of its subsidiaries.
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(xv) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus or any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus, neither
the Company nor any of its subsidiaries has sustained any material loss
or interference with their respective businesses 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 or any of
its subsidiaries, except in each case as described in or contemplated by
the Prospectus or, if the Prospectus and any Integrated Prospectus is
not in existence, the most recent Preliminary Prospectus.
(xvi) 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 (except for the sale of
Securities by the Selling Securityholders under this Agreement).
(xvii) 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.
(xviii) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xix) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which they are engaged; neither the Company nor any such subsidiary
has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any 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 materially and adversely affect the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in
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existence, the most recent Preliminary Prospectus).
(xx) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxi) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has 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 in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xxii) The Company will conduct 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 this transaction will
not cause the Company to become an investment company subject to
registration under such Act.
(xxiii) 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 its subsidiaries) 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 or as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxiv) Neither the Company nor any of its subsidiaries is 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 and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except 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 in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(xxv) Each certificate signed by any officer of the Company and
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.
(xxvi) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxvii) There are no holders of securities of the Company, who, by
reason of the filing of the Registration Statement, have the right (and
have not waived such right) to request the Company to register under the
Act, or to include in the Registration Statement, securities held by
them.
(xxviii) The Company and each of its subsidiaries maintain 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.
(xxix) 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 or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and its subsidiaries.
(xxx) 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), (1) the
Company and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (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 and its
consolidated subsidiaries, 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).
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(xxxi) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and
marketable title to all personal property owned by each of them, in each
case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, except such as do 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 or
such subsidiary, and any real property and buildings held under lease by
the Company or any such subsidiary are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(xxxii) The Company and its subsidiaries own or possess, 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 their respective businesses, and neither the Company
nor any such subsidiary has received any notice of infringement of or
conflict with asserted rights of 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 in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(b) Each Selling Securityholder represents and warrants to, and agrees
with, each of the several Underwriters that:
(i) Such Selling Securityholder has full power (corporate and
other) to enter into this Agreement and to sell, assign, transfer and
deliver to the Underwriters the Securities to be sold by such Selling
Securityholder hereunder in accordance with the terms of this Agreement;
the execution and delivery of this Agreement have been duly authorized
by all necessary corporate action of such Selling Securityholder; and
this Agreement has been duly executed and delivered by such Selling
Securityholder.
(ii) Such Selling Securityholder has duly executed and delivered a
power of attorney and custody agreement (with respect to such Selling
Securityholder, the "Power-of-Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the
Representatives, appointing ____________ as such Selling
Securityholder's attorney-in-fact (the "Attorney-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of
such Selling Securityholder and appointing ____________, as custodian
thereunder (the "Custodian"). Certificates in negotiable form, endorsed
in blank or accompanied by blank stock powers duly executed, with
signatures appropriately guaranteed, representing the Securities to be
sold by such Selling Securityholder hereunder have been deposited with
the Custodian pursuant to the Custody Agreement for the purpose of
delivery pursuant to this Agreement. Such Selling Securityholder has
full power (corporate and other) to enter into the Custody Agreement
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and the Power-of-Attorney and to perform its obligations under the Custody
Agreement. The execution and delivery of the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary corporate
action of such Selling Securityholder; the Custody Agreement and the
Power-of-Attorney have been duly executed and delivered by such Selling
Securityholder and, assuming due authorization, execution and delivery
by the Custodian, are the legal, valid, binding and enforceable
instruments of such Selling Securityholder. Such Selling Securityholder
agrees that each of the Securities represented by the certificates on
deposit with the Custodian is subject to the interests of the
Underwriters hereunder, that the arrangements made for such custody, the
appointment of the Attorney-in-Fact and the right, power and authority
of the Attorney-in-Fact to execute and deliver this Agreement, to agree
on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to
carry out the terms of this Agreement, are to that extent irrevocable
and that the obligations of such Selling Securityholder hereunder shall
not be terminated, except as provided in this Agreement or the Custody
Agreement, by any act of such Selling Securityholder, by operation of
law or otherwise, whether in the case of any individual Selling
Securityholder by the death or incapacity of such Selling
Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of
such trust or estate, or in the case of a corporate or partnership
Selling Securityholder by its liquidation or dissolution or by the
occurrence of any other event. If any individual Selling Securityholder,
trustee or executor should die or become incapacitated or any such trust
should be terminated, or if any corporate or partnership Selling
Securityholder shall liquidate or dissolve, or if any other event should
occur, before the delivery of such Securities hereunder, the
certificates for such Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the respective terms and
conditions of this Agreement as if such death, incapacity, termination,
liquidation or dissolution or other event had not occurred, regardless
of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(iii) Selling Securityholder is the lawful owner of the Securities
to be sold by such Selling Securityholder hereunder and upon sale and
delivery of, and payment for, such Securities, as provided herein, such
Selling Securityholder will convey good and marketable title to such
Securities, free and clear of any security interests, liens,
encumbrances, equities, claims or other defects.
(iv) Such Selling Securityholder has not, directly or indirectly,
(i) taken any action designed to cause or 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
(except for the sale of Securities by the Selling Securityholders under
this Agreement.
11
(v) To the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Selling
Securityholder specifically for use therein, such Preliminary Prospectus
did, and the Registration Statement and the Prospectus and any
amendments or supplements thereto, when they become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder and
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they are made, not misleading.
(vi) The sale by such Selling Securityholder of Securities pursuant
hereto is not prompted by any adverse information concerning the Company
that is not set forth in the Registration Statement or the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(vii) sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such
Selling Securityholder with the other provisions of this Agreement, the
Custody 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 under state
securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) 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 and the
Exchange 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 any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which such Selling Securityholder is a party or by which
such Selling Securityholder or any of such Selling Securityholder's
properties are bound, or the charter documents or by-laws of such
Selling Securityholder or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
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 and the Selling Securityholders severally agree to sell to
each of the Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and the Selling Securityholders,
at a purchase price of $____________ per share, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule 2
hereto. One or more certificates in definitive form for 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
12
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 and the Selling Securityholders. Such
delivery of and payment for the Firm Securities shall be made at the offices
of Messrs. Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, at 9:30
a.m., New York time, on ____________, 1997, 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 principal amount 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
the 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) 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.
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(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Shares does not
constitute closing of a purchase and sale of the Shares. Only execution and
delivery of a receipt for Shares by the Underwriters indicates completion of
the closing of a purchase of the Shares 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 Shares, the Company hereby
acknowledges that until the Underwriters execute and deliver a receipt for
the Shares, 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 Shares is not completed and the wire
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 wire funds are not returned by it, in
same-day funds, interest on the amount of such wire 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 AND THE SELLING SECURITYHOLDERS. The
Company and the Selling Securityholders covenant and agree 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 or, if the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time
period required by Rule 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, the Exchange Act and the Trust Indenture Act and the respective 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 any Integrated Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus or the amendment referred to in the third sentence of Section 2(a)
hereof, any amendment or supplement to such prospectus or any amendment to
the Registration Statement or any Rule 462(b) Registration Statement of which
the Representatives shall not 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 and any
Integrated
14
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 and any Integrated 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
post-effective amendment thereto or any order directed at any document
incorporated by reference in the Registration Statement or if the Prospectus
and any required Integrated Prospectus are or any amendment or supplement
thereto or any order preventing or suspending the use of any Preliminary
Prospectus, the Prospectus and any Integrated 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 any Preliminary Prospectus, and any Integrated 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 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
not 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, the Exchange Act or the respective 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, an amendment or supplement to the Prospectus or any Integrated
Prospectus that corrects such statement or omission or effects such
compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration
statement originally filed with respect to the Securities and each amendment
thereto (in each case including exhibits thereto), (ii) to each other
15
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, the Prospectus or any Integrated 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 of (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 securityholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries 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 or any
Integrated Prospectus.
(h) The Company and the Selling Securityholders 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 pursuant to this Agreement and except for issuances
pursuant to the exercise of employee stock options outstanding on the date
hereof.
(i) The Company and the Selling Securityholders 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 (except
for the sale of Securities by the Selling Securityholders under this
Agreement).
(j) The Company will obtain the agreements described in Section 7(f)
hereof prior to the Firm Closing Date.
(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 and any
16
Integrated 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, 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 ensure that the Securities remain included for
quotation on the Nasdaq National Market following the Firm Closing Date.
6. EXPENSES. 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, the
Prospectus and any Integrated 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, 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 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) the listing of the Securities on the Nasdaq National Market
and, (viii) meetings with prospective investors in the Securities (other than
shall have been specifically approved by the Representatives to be paid for
by the Underwriters). 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 fees and disbursements of counsel) that shall have been
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
17
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, 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 Integrated Prospectus and any
amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 434 and 424(b) under
the Act; no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement, the
Prospectus or any Integrated Prospectus or any amendment or supplement
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 complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or
any Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A., counsel for the
Company, to the effect that:
(i) the Company and each of its subsidiaries listed in Schedule 3
hereto (the "Subsidiaries") have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of
their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be
so qualified does not amount to a material liability or disability to
the Company and the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have corporate power
to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus
or any Integrated Prospectus, and the Company has corporate power to
enter into this Agreement and to carry out all the terms and provisions
hereof and thereof to be carried out by it;
18
(iii) the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares and as
otherwise set forth in the Prospectus and any Integrated Prospectus, are
owned beneficially by the Company free and clear of any perfected
security interests or, to the best knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or any Integrated
Prospectus; all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state securities laws and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or
purchase securities; the Firm Securities have been duly authorized by
all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; the
Securities have been duly included for trading on the Nasdaq National
Market; 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;
(v) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus and any Integrated Prospectus, insofar
as such statements purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary of such provisions,
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;
(vii) no legal or governmental proceedings are pending to which the
Company or any of the Subsidiaries is a party or to which the property
of the Company or any of the Subsidiaries is subject that are required
to be described in the Registration Statement, the Prospectus and any
Integrated Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any of
their respective properties; and no contract or other document is
required to be described in the Registration Statement, the Prospectus
and any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required;
19
(viii) 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 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, any
indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of the Subsidiaries,
or 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 or any of the Subsidiaries;
(ix) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, and any Integrated Prospectus 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 no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto
and no order directed at any document incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission; and
(x) the Registration Statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus and any Integrated Prospectus (in each case,
including the documents incorporated by reference therein but not
including the financial statements and other financial information
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective 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 any effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant to
Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus and any Integrated Prospectus, as of its
date or the date of such opinion, included or includes any 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.
20
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 and, as to matters involving the
application of laws of any jurisdiction other than the State of Colorado or
the United States, to the extent satisfactory in form and scope to counsel
for the Underwriters, upon the opinion of Counsel acceptable to the
Representatives. The foregoing opinion shall also state that the Underwriters
are justified in relying upon such other opinion of Counsel acceptable to the
Representatives, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus and any
Integrated 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, 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, the Prospectus or any Integrated 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.
(d) The Representatives shall have received from BDO Xxxxxxx, 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 and
its consolidated subsidiaries within the meaning of the Act, the Exchange
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined by
them and included in the Registration Statement, the Prospectus and any
Integrated Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act and the
related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company and
its consolidated subsidiaries, 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 each of
its consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
21
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement, the Prospectus and any Integrated
Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange 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
consolidated financial statements included in the Registration
Statement and the Prospectus and any Integrated Prospectus;
(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 and its consolidated
subsidiaries or any decreases in net current assets or
stockholders' equity of the Company and its consolidated
subsidiaries, in each case compared with amounts shown on the
____________, 1997 unaudited consolidated balance sheet included in
the Registration Statement, the Prospectus and any Integrated
Prospectus, or for the period from ____________, 1997 to such
specified date there were any decreases, as compared with the
comparable prior year period, in net revenues, net income before
income taxes or total or per share amounts of net income of the
Company and its consolidated subsidiaries, except in all instances
for changes, decreases or increases set forth in such letter; and
(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 its consolidated subsidiaries and are
included in the Registration Statement, the Prospectus and any
Intergrated Prospectus and have compared such amounts, percentages and
financial information with such records of the Company and its
consolidated subsidiaries 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
consolidated condensed financial statements included in the
Registration Statement, the Prospectus, and any Intergrated 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 its consolidated subsidiaries 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 consolidated condensed financial statements,
nothing came to their attention that caused them to believe that the
unaudited pro forma consolidated condensed 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 (i) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof,
22
unless the Representatives deem such explanation unnecessary, and (ii 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.
References to the Registration Statement, the Prospectus and any
Integrated 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.
(e) 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, the Prospectus and any Integrated 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 post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or supplement
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, the Prospectus and
any Integrated Prospectus, neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with their
respective businesses 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 or any of its subsidiaries, except in each
case as described in or contemplated by the Prospectus and any
Integrated Prospectus.
23
(f) The Representatives shall have received from each person who is a
director or officer of the Company and from ________ 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 an 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 120 days after the date of this Agreement.
(g) 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.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
(i) The Representatives shall have received from each Selling
Securityholder a Form W-9 indicating such Selling Securityholders correct
taxpayer identification number.
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.
(i) The Selling Securityholders shall have furnished to the
Representatives the opinion of ____________, counsel for the Selling
Securityholders, dated the Closing Date, to the effect that:
(i) Each Selling Securityholder has full corporate power to enter
into this Agreement, the Custody Agreement and the Power-of-Attorney and
to sell, transfer and deliver the Securities being sold by such Selling
Securityholder hereunder in the manner provided in this Agreement and to
perform its obligations under the Custody Agreement; the execution and
delivery of this Agreement, the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary corporate
action of each Selling Securityholder; this Agreement, the Custody
Agreement and the Power-of-Attorney have been duly executed and
delivered by each Selling Securityholder; assuming due authorization,
execution and delivery by the Custodian, the Custody Agreement and the
Power-of-Attorney are the legal, valid, binding and enforceable
instruments of such Selling Securityholder, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
24
(ii) the delivery by each Selling Securityholder to the several
Underwriters of certificates for the Securities being sold hereunder by
such Selling Securityholder against payment therefor as provided herein,
will convey good and marketable title to such Securities to the several
Underwriters, free and clear of all security interests, liens,
encumbrances, equities, claims or other defects;
(iii) the sale of the Securities to the Underwriters by such
Selling Securityholder pursuant to this Agreement, the compliance by
such Selling Securityholder with the other provisions of this Agreement,
the Custody 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 and such as may be required
under state securities or blue sky laws, or (ii) conflict with or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease
or other agreement or instrument to which such Selling Securityholder is
a party or by which such Selling Securityholder or any of such Selling
Securityholder's properties are bound, or the charter documents or
by-laws of such Selling Securityholder or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling Securityholder.
In rendering 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 (i) shall include
any amendment or supplement thereto at the date of such opinion.
(j) The Representatives shall have received a certificate from each
Selling Securityholder, signed by the principal executive officer and the
principal financial or accounting officer of such Selling Securityholder,
dated the Closing Date, to the effect that:
(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on and
as of the Closing Date;
(ii) to the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Selling
Securityholder specifically for use therein, the Registration Statement,
as amended as of the 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 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
25
(iii) such Selling Securityholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior to the
Closing Date.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees 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 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, the Exchange 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, the Prospectus and any
Integrated 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, the Prospectus, and any Integrated 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 or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, tape recordings 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 the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in such registration statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto, or any Application in reliance
upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically
for use therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not,
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
26
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.
(b) Each Selling Securityholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, each Underwriter and each person who controls the
Company or any Underwriter within the meaning of the Act or the Exchange Act
against any losses, claims, damages or liabilities to which the Company, any
such director, officer, such Underwriter or any such controlling person may
become subject under the Act, the Exchange 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
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 Selling
Securityholder for use therein, and will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company, any such director,
officer, such Underwriter or any such 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 any Selling Securityholder may otherwise have. Each
Selling Securityholder will not, without the prior written consent of the
Underwriter or Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, settle or comprise 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 as unconditional release of
all of the Underwriters and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(c) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company, each of its directors, each of its officers who signed
the Registration Statement, each Selling Securityholder and each person, if
any, who controls the Company or such Selling Securityholder 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, any such
director or officer of the Company, such Selling Securityholder or any such
controlling person of the Company or such Selling Securityholder may become
subject under the Act, the Exchange 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
27
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 any
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, any such director, officer or controlling person or such Selling
Securityholder 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.
(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 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.
28
(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 and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro rate
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
(d). Notwithstanding any other provision of this paragraph (d), 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 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 11(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 (d), 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 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.
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
29
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 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 or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses 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),
in the condition (financial or otherwise), business prospects, net
worth or
30
results of operations of the Company and its subsidiaries, 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 the Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(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 heading
"Underwriting" in any Preliminary Prospectus, the Prospectus, or any
Integrated 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 Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company
at Evergreen Resources, Inc., 0000 Xxxxxx Xxxxxx, 0000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx, 00000, and if sent to a Selling Securityholder at the
address set forth on Schedule 1 hereto.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company 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)
31
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.
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 and each
Selling Securityholder 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. The Selling Securityholder designates and appoints
_____________, and such other persons as may hereafter be selected by the
Selling Securityholder irrevocably agreeing in writing to so serve, as its
agent to receive on its behalf service of all process in any such proceedings
in any such court, such service being hereby acknowledged by the Selling
Securityholder to be effective and binding service in every respect. A copy
of any such process so served shall be mailed by registered mail to the
Company or any Selling Securityholder 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. If any agent appointed by the Selling Securityholder refuses
to accept service, the Selling Securityholder hereby agrees that service of
process sufficient for personal jurisdiction in any action against the
Selling Securityholder in the State of New York may be made by registered or
certified mail, return receipt requested, to the Selling Securityholder at
its address provided in Section 13 hereof, and the Selling Securityholder
hereby acknowledges that such service shall be effective and binding in every
respect. 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 Securityholder 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.
32
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 Selling Securityholder and each of the several Underwriters.
Very truly yours,
EVERGREEN RESOURCES, INC.
By:
---------------------------------
President
SELLING SECURITYHOLDERS
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
THE FOREGOING AGREEMENT IS HEREBY
CONFIRMED AND ACCEPTED AS OF THE
DATE FIRST ABOVE WRITTEN.
PRUDENTIAL SECURITIES INCORPORATED
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX INCORPORATED
XXXXXXX, XXXXXX INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By:
-------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
33
SCHEDULE 1
NAMES AND ADDRESSES OF
SELLING SECURITYHOLDERS
1
SCHEDULE 2
UNDERWRITERS
Number of Firm
Underwriter Securities to be Purchased
----------- --------------------------
Prudential Securities Incorporated . . . . . . . .
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated. .
Xxxxxxx, Xxxxxx Inc. . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . $2,750,000
1
SCHEDULE 3
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
1
