EXHIBIT 1.02
SELECTED DEALERS AGREEMENT
PUBLIC OFFERING OF
1,650,000 SHARES OF COMMON STOCK
1,650,000 REDEEMABLE WARRANTS
OFFERING PRICE OF $______ PER SHARE
AND $.25 PER WARRANT
NATURAL GAS SERVICES GROUP, INC.
JUNE ____, 2002
Neidiger/Xxxxxx/Xxxxxx, Inc., on behalf of itself and other
underwriters (the "Underwriters") for which it is the representative (the
"Representative"), has severally agreed with Natural Gas Services Group, Inc., a
Colorado corporation (the "Company"), to purchase 1,650,000 shares (the "Firm
Shares") of common stock (the "Common Stock") and 1,650,000 redeemable warrants
(the "Firm Warrants"; together with the Firm Shares, the "Firm Securities") of
the Company, and the Representative has been granted the right to purchase up to
an additional 247,500 shares and/or warrants (the "Additional Securities") at
its option for the sole purpose of covering over-allotments in the sale of the
Firm Shares (the Firm Securities and Additional Securities being collectively
referred to as the "Securities" or a "Security"). The Underwriters are offering
the Securities to the public at an offering price of $_______ per Firm Share and
$.25 per Firm Warrant. Although the Firm Shares and Firm Warrants are not being
sold as Units, you must sell an equal number of both. Certain other capitalized
terms used herein are defined in the Underwriting Agreement and are used herein
as therein defined.
The Representative is offering the Securities to certain selected
dealers (the "Selected Dealers"), when, as and if accepted by the Representative
and subject to withdrawal, cancellation or modification of the offer without
notice and further subject to the terms of (i) the Company's current Prospectus,
(ii) the Underwriting Agreement, (iii) this Agreement, and (iv) the
Representative's instructions which may be forwarded to the Selected Dealer from
time to time. A copy of the Underwriting Agreement will be delivered to you
forthwith for inspection or copying or both, upon your request therefor. This
invitation is made by the Representative only if the Securities may be offered
lawfully to dealers in your state.
The further terms and conditions of this invitation are as follows:
1. Acceptance of Orders. Orders received by the Representative from the
Selected Dealer will be accepted only at the price, in the amounts and on the
terms which are set forth in the Company's current Prospectus, subject to
allotment in the Representative's uncontrolled discretion. The Representative
reserves the right to reject any orders, in whole or in part.
2. Selling Concession. As a Selected Dealer, you will be allowed on all
Securities purchased by you, which the Underwriters have not repurchased or
contracted to repurchase prior to termination of this Agreement at or below the
public offering price, a concession of _______% of the full 10% Underwriting
discount, i.e., $_________ per Firm Share and $_____ per Firm Warrant as shown
in the Company's current Prospectus. No selling concession will be allowed to
any domestic broker-dealer who is not a member of the National Association of
Securities Dealers, Inc. (the "Association"), or to any foreign broker-dealer
eligible for membership in the Association who is not a member of the
Association. Payment of such selling concession to you will be made only as
provided in Section 4 hereof. After the Securities are released for sale to the
public, the Representative is authorized to, and may, change the public offering
price and the selling concession.
3. Reoffer of Securities. Securities purchased by you are to be bona
fide reoffered by you in conformity with this Agreement and the terms of
offering set forth in the Prospectus. You agree that you will not bid for,
purchase, attempt to induce others to purchase, or sell, directly or indirectly,
any Securities except as contemplated by this Agreement and except as a broker
pursuant to unsolicited orders. You confirm that you have complied and agree
that you will at all times comply with the provisions of Regulation M of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") applicable to
this offering. In respect of Securities sold by you and thereafter purchased by
the Representative at or below the public offering price prior to the
termination of this Agreement as described hereinafter (or such longer period as
may be necessary to cover any short position with respect to the offering), you
agree at the
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Representative's option either to repurchase the Securities at a price equal to
the cost thereof to the Representative, including commissions and transfer taxes
on redelivery, or to repay the Representative such part of your Selected
Dealers' concessions on such Securities as the Representative designates.
4. Payment for Securities. Payment for the Securities purchased by you
is to be made at the net Selected Dealers' price of $_____ per Firm Share and
$_____ per Firm Warrant, at the offices of Neidiger/Xxxxxx/Xxxxxx, Inc., 0000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, Xxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department, at such time and on such date as the
Representative may designate, by certified or official bank check, payable in
clearing house funds to the order of the Representative, against delivery of
certificates for the Securities so purchased. If such payment is not made at
such time and on such date, you agree to pay the Representative interest on such
funds at the current interest rates. The Representative may in its discretion
deliver the Securities purchased by you through the facilities of the Depository
Trust Company or, if you are not a member, through your ordinary correspondent
who is a member unless you promptly give the Representative written instructions
otherwise.
5. Offering Representations. The Representative has been informed that
a Registration Statement in respect of the Securities is expected to become
effective under the Securities Act of 1933, as amended (the "Act"). You are not
authorized to give any information or to make any representations other than
those contained in the Prospectus or to act as agent for the Company or for the
undersigned when offering the Securities to the public or otherwise.
6. Blue Sky. Neither the Representative nor the Underwriters assume any
responsibility or obligations as to your right to sell the Securities in any
jurisdiction, notwithstanding any information furnished in that connection. The
Selected Dealer shall report in writing to the Representative the number of
Securities which have been sold by it in each state and the number of
transactions made in each such state. This state report shall be submitted to
the Representative as soon as possible after completion of billing, but in any
event not more than three days after the closing.
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7. Dealer Undertakings. By accepting this Agreement, the Selected
Dealer in offering and selling the Securities in the Public Offering (i)
acknowledges its understanding of (a) the Conduct Rules (the "Rules") of the
Association and the interpretations of such Rules promulgated by the Board of
Governors of the Association (the "Interpretations") including, but not limited
to the Rule and Interpretation with respect to "Free-Riding and Withholding"
defined therein, (b) Rule 174 of the rules and regulations promulgated under the
Act, (c) Regulation M promulgated under the Exchange Act, (d) Release No. 3907
under the Act, (e) Release No. 4150 under the Act, and (f) Sections 2410-2460
and 2710-2780 of the Rules and Interpretations thereunder, and (ii) represents,
warrants, covenants and agrees that it shall comply with all applicable
requirements of the Act and the Exchange Act in addition to the specific
provisions cited in subparagraph (i) above and that it shall not violate,
directly or indirectly, any provision of applicable law in connection with its
participation in the Public Offering of the Securities.
8. Conditions of Public Offering. All sales shall be subject to
delivery by the Company of certificates evidencing the Securities against
payment therefor.
9. Failure of Order. If an order is rejected or if a payment is
received which proves insufficient or worthless, any compensation paid to the
Selected Dealer shall be returned by (i) restoration by the Representative to
the Selected Dealer of the latter's remittance or (ii) a charge against the
account of the Selected Dealer with the Representative, as the latter may elect
without notice being given of such election.
10. Additional Representations, Covenants and Warranties of Selected
Dealer. By accepting this Agreement, the Selected Dealer represents that it is
registered as a broker-dealer under the Exchange Act; is qualified to act as a
dealer in the states or the jurisdictions in which it shall offer the
Securities; is a member in good standing of the Association; and shall maintain
such registrations, qualifications and membership in full force and effect and
in good standing throughout the term of this Agreement. If the Selected Dealer
is not a member of the Association, it represents that it is a foreign dealer
not registered under the Exchange Act and
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agrees to make no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents therein, and in
making any sales to comply with the Association's Rules and Interpretations with
respect to Free-Riding and Withholding. Further, the Selected Dealer agrees to
comply with all applicable federal laws including, but not limited to, the Act
and Exchange Act and the rules and regulations of the Commission thereunder; the
laws of the states or other jurisdictions in which Securities may be offered or
sold by it; and the Constitution, Bylaws, and rules of the Association. Further,
the Selected Dealer agrees that it will not offer or sell the Securities in any
state or jurisdiction except those in which the Securities have been qualified
or qualification is not required. The Selected Dealer acknowledges its
understanding that it shall not be entitled to any compensation hereunder for
any period during which it has been suspended or expelled from membership in the
Association.
11. Employees and other Agents of the Selected Dealer. By accepting
this Agreement, the Selected Dealer assumes full responsibility for thorough and
proper training of its employees and other agents and representatives concerning
the selling methods to be used in connection with the Public Offering of the
Securities, giving special emphasis to the principles of full and fair
disclosure to prospective investors and the prohibitions against "Free-Riding
and Withholding" as set forth in Section 2110 of the Rules and the
Interpretations thereunder.
12. Indemnification by the Company. The Company has agreed in Section 8
of the Underwriting Agreement to indemnify and hold harmless the Underwriters,
the Representative and each person if any, who controls the Representative or
any one of the Underwriters within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act against any and all loss, liability, claim,
damage, and expense whatsoever (which shall include, for all purposes of Section
8 of the Underwriting Agreement, but not be limited to, attorneys' fees and any
and all expense whatsoever incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation) as and when
incurred arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement, or the Prospectus (as from
time to time
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amended and supplemented), or any amendment or supplement thereto, or
(B) in any application or other document or communication (in the Underwriting
Agreement collectively called an "application") in any jurisdiction in order to
qualify the Securities under the "blue sky" or securities laws thereof or filed
with the Commission or any securities exchange; or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in the
Underwriting Agreement. The Representative has agreed to give the Company an
opportunity and the right to participate in the defense or preparation of the
defense of any action brought against the Representative, any Underwriter or any
controlling person thereof to enforce any such loss, claim, demand, liability or
expense. The agreement of the Company under this indemnity is conditioned upon
notice of any such action having been promptly given by the indemnified party to
the Company. Failure to notify the Company as provided in the Underwriting
Agreement shall not relieve the Company of its liability which it may have to
the Representative, the Underwriters, or any controlling person thereof other
than pursuant to Section 8(a) of the Underwriting Agreement. This agreement is
subject in all respects, especially insofar as the foregoing description of the
indemnification provisions set forth in the Underwriting Agreement is concerned,
to the terms and provisions of the Underwriting Agreement, a copy of which will
be made available for inspection or copying or both to the Selected Dealer upon
written request to the Representative therefor. The Selected Dealer acknowledges
and confirms that, by signing a counterpart of this Agreement, it shall be
deemed an agent of the Underwriters or a "Representative" for all purposes of
Section 8 of the Underwriting Agreement, as expressly set forth therein.
13. Indemnification by the Selected Dealer. The Selected Dealer shall
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall have signed the Registration Statement, each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, to the same extent as the
indemnity from the Company to the Underwriters in Section 8(a) of the
Underwriting Agreement, but only with respect to statements or omissions, if
any, made in any Preliminary Prospectus, the Registration Statement, or the
Prospectus (as from time to time
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amended and supplemented), or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with information furnished to
the Representative or the Company with respect to the Selected Dealer by or on
behalf of the Selected Dealer expressly for inclusion in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or are based upon
alleged misrepresentations or omissions to state material facts in connection
with statements made by the Selected Dealer or the Selected Dealer's employees
or other agents to the Company or the Representative orally or by any other
means; provided, however, that the obligation of the Selected Dealer to provide
indemnity hereunder shall be limited to the amount which represents the product
of the number of Firm Securities and Additional Securities sold by the Selected
Dealers and the initial public offering price per Security set forth on the
cover page of the Prospectus. If any action shall be brought against the Company
or any other person so indemnified in respect of which indemnity may be sought
against the Selected Dealer pursuant to this provision, the Selected Dealer
shall have the rights and duties given to the Company in the Underwriting
Agreement, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
8(a) of the Underwriting Agreement; and the Selected Dealer shall reimburse the
Company and the Representative for any legal or other expenses reasonably
incurred by them in connection with the investigation of or the defense of any
such action or claim. The Representative shall, after receiving the first
summons or other legal process disclosing the nature of the action being brought
against it or the Company in any proceeding with respect to which indemnity may
be sought by the Company or the Representative hereunder, notify promptly the
Selected Dealer in writing of the commencement thereof; and the Selected Dealer
shall be entitled to participate in (and, to the extent the Selected Dealer
shall wish, to direct) the defense thereof at the expense of the Selected
Dealer, but such defense shall be conducted by counsel satisfactory to the
Company and the Representative. If the Selected Dealer shall fail to provide
such defense, the Company or the Representative may defend such action at the
cost and expense of the Selected Dealer. The Selected Dealer's obligation under
this Section 13 shall survive any termination of this Agreement, the
Underwriting Agreement and the delivery of and payment for the Securities under
the Underwriting Agreement, and shall remain in full force and effect regardless
of the
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investigation made by or on behalf of any Representative within the meaning of
Section 15 of the Act.
14. No Authority to Act as Partner or Agent. Nothing herein shall
constitute the Selected Dealers as an association or other separate entity or
partners with or agents of the Representative or with each other, but each
Selected Dealer shall be responsible for its pro rata share of any liability or
expense based upon any claims to the contrary. The Representative shall not be
under any liability for or in respect of the value, validity or form of the
Securities, or the delivery of certificates for the Securities or the
performance by any person of any agreement on its part, or the qualification of
the Securities for sale under the laws of any jurisdiction, or for or in respect
of any matter in connection with this Agreement, except for lack of good faith
and for obligations expressly assumed by the Representative in this Agreement.
15. Expenses. No expenses incurred in connection with offers and sales
of the Securities under the Public Offering will be chargeable to the Selected
Dealers. A single transfer tax, if any, on the sale of Securities by the
Selected Dealer to its customers will be paid when such Securities are delivered
to the Selected Dealer for delivery to its customers. Notwithstanding the
foregoing, the Selected Dealer shall pay its proportionate share of any transfer
tax or any other tax (other than the single transfer tax described above) if any
such tax shall at any time be assessed against the Representative and other
Selected Dealers.
16. Notices. All notices, demands or requests required or authorized
hereunder shall be deemed given sufficiently if in writing and sent by
registered or certified mail, return receipt requested and postage prepaid, or
by tested telex, telegram, cable or facsimile to, in the case of the
Representative, the address set forth above directed to the attention of the
President of the Representative, and in the case of the Selected Dealer, to the
address provided below by the Selected Dealer, directed to the attention of the
President.
17. Termination. This Agreement may be terminated by the Representative
with or without cause upon written notice to the Selected Dealer to such effect;
and such notice having
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been given, this Agreement shall terminate at the time specified therein.
Additionally, this Agreement shall terminate upon the earlier of the termination
of the Underwriting Agreement, or at the close of business sixty days after the
Securities are released by the Representative for sale to the public.
18. General Provisions. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Colorado. This
Agreement embodies the entire agreement and understanding between the
Representative and the Selected Dealer and supersedes all prior agreements and
understandings related to the subject matter hereof, and this Agreement may not
be modified or amended or any term or provision hereof waived or discharged
except in writing signed by the party against whom such amendment, modification,
waiver or discharge is sought to be enforced. All the terms of this Agreement,
whether so expressed or not, shall be binding upon, and shall inure to the
benefit of, the respective successors, legal representatives and assigns of the
parties hereto; provided, however, that none of the parties hereto can assign
this Agreement or any of its rights hereunder without the prior written consent
of the other party hereto, and any such attempted assignment or transfer without
the other party's prior written consent shall be void and without force or
effect. The headings of this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
If the foregoing correctly sets forth the terms and conditions of your
agreement to purchase the Securities allotted to you, please indicate your
acceptance thereof by signing and returning to Neidiger/Xxxxxx/Xxxxxx, Inc. the
duplicate copy of this Agreement, whereupon this letter and your acceptance
shall become and evidence a binding contract between you and the Representative.
XXXXXXXX/XXXXXX/XXXXXX, INC.
By:________________________________
Title:_____________________________
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Gentlemen:
The undersigned confirms its agreement to purchase __________ shares of
Common Stock and __________ Warrants of Natural Gas Services Group, Inc., upon
the terms and subject to the conditions of the foregoing Selected Dealers
Agreement, and further agrees that any agreement by it to purchase additional
Securities during the life of such Agreement will be upon the same terms and
subject to the same conditions. The undersigned acknowledges receipt of the
Prospectus relating to the public offering of the Securities and confirms that
in agreeing to purchase such Securities it has relied on such Prospectus and not
on any other statement whatsoever written or oral.
Firm Name:_________________________________
(Print or Type name of Firm)
By:________________________________________
(Authorized Agent)
___________________________________________
(Print or Type Name and Title of
Authorized Agent)
Address:___________________________________
Telephone No.:_____________________________
IRS Employer Identification No.:___________
Dated:___________________, 2002
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