EXHIBIT 1.1
TRANSMONTAIGNE OIL COMPANY
COMMON STOCK
($.01 Par Value)
UNDERWRITING AGREEMENT
____________, 1997
1
UNDERWRITING AGREEMENT
____________, 1997
Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxxx & Sons, Inc.
XXX XXXXX XXXXXXXXX XXXXXX
XX. XXXXX, XXXXXXXX 00000
Xxxxxx Xxxxxxx & Co.
000 00xx Xxxxxx
XXXXX 0000
XXXXXX, XXXXXXXX 00000
as Managing UnderwriterS
Ladies and Gentlemen:
TRANSMONTAIGNE OIL COMPANY, a Delaware corporation (the "Company"),
proposes to issue and sell and the persons named in Schedule B (the "Selling
Shareholders") propose to sell to the underwriters named in Schedule A (the
"Underwriters") an aggregate of ___________ shares (the "Firm Shares") of Common
Stock, par value $0.01 per share (the "Common Stock"), of the Company, of which
___________ shares are to be issued and sold by the Company and AN AGGREGATE OF
____________ shares are to be sold by the Selling Shareholders IN THE RESPECTIVE
AMOUNTS SET FORTH OPPOSITE THEIR NAMES IN SCHEDULE B. In addition, solely for
the purpose of covering overallotments, the Company proposes to issue and sell,
at the Underwriters' option, up to ____________ additional shares of the Common
Stock (the "Additional Shares"). The Additional Shares and the Firm Shares are
collectively referred to as the "Shares". The Shares are described in the
Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-2, including a prospectus,
relating to the Shares, which incorporates by reference documents that the
Company has filed in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules
and regulations thereunder (collectively, the "Exchange Act"). The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses and all documents incorporated by reference
therein (collectively, the "Preliminary Prospectus") relating to the Shares.
Except where the context otherwise requires, the registration statement as in
effect at the time of execution of this Agreement or, if the registration
statement is not yet effective, as amended when it becomes effective, including
all documents filed as a part thereof or incorporated by reference therein, and
including any registration statement filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act, is herein called
the "Registration Statement", and the prospectus, including all documents
incorporated therein by reference, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, in the form of final prospectus included in the Registration Statement
at the time it became effective, is herein called the "Prospectus".
The Company, the Selling Shareholders and the Underwriters agree as
follows:
1. Sale and Purchase. On the basis of the representations and
-----------------
warranties and the other terms and conditions herein set forth, the Company and
each Selling Shareholder, severally and not jointly, agrees to sell to the
respective Underwriters and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company and each Selling Shareholder the respective
number of Firm Shares (subject to such adjustment as you may determine to avoid
fractional shares) which bears the same proportion to the number of Firm Shares
to be sold by the Company or by that Selling Shareholder, as the case may be, as
the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A bears to the total number of Firm Shares to be sold by the Company
and the Selling Shareholders, in each case at a purchase price of $____ per
Share. You may release the Firm Shares for public sale promptly after this
Agreement becomes effective. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
2
In addition, on the basis of the representations and warranties and
the other terms and conditions herein set forth, the Company hereby grants to
the several Underwriters an option to purchase, and the Underwriters shall have
the right to purchase, severally and not jointly, from the Company all or a
portion of the Additional Shares as may be necessary to cover overallotments
made in connection with the offering of the Firm Shares, at the same purchase
price per share to be paid by the several Underwriters to the Company and the
Selling Shareholders for the Firm Shares. This option may be exercised in whole
or in part from time to time on or before the thirtieth day following the date
hereof, by written notice to the Company. Any such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (any such
date and time being herein referred to as an "additional time of purchase");
provided, however, that no additional time of purchase shall occur earlier than
the time of purchase (as defined below) nor earlier than the second business
day after the date on which the option shall have been exercised nor later than
the eighth business day after the date on which the option shall have been
exercised. The number of Additional Shares to be sold to each Underwriter at an
additional time of purchase shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased at such additional
time of purchase as the number of Firm Shares set forth opposite the name of
such Underwriter on Schedule A bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
--------------------
Firm Shares shall be made to the Company and to the Attorney-in Fact referred to
in Section 4(d) on behalf of the Selling Shareholders by certified or official
bank checks, in immediately available funds, at the office of Xxxxxx, Read & Co.
Inc. in New York City, against delivery of the certificates for the Firm Shares
to you for the respective accounts of the Underwriters. Such
_______________________
As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
3
payment and delivery shall be made at 9:30 A.M., New York City time, on
____________, 1997 (unless another time shall be agreed to by you, the Company
and the Selling Shareholders or unless postponed in accordance with the
provisions of Section 10). The time at which such payment and delivery are
actually made is called the "time of purchase". Certificates for the Firm Shares
shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the time
of purchase. For the purpose of expediting the checking of the certificates for
the Firm Shares by you, the Company and the Selling Shareholders agree to make
such certificates available to you for such purpose at least one full business
day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the additional time of
purchase. For the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Company and the Selling Shareholders agree to make
such certificates available to you for such purpose at least one full business
day preceding the additional time of purchase.
3. Representations and Warranties of the Company and the Selling
-------------------------------------------------------------
Shareholders. The Company and each of the Selling Shareholders, jointly and
------------
severally, represent and warrant to each of the Underwriters that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act; when the Registration Statement becomes or became
effective and at all times subsequent thereto up to the time of purchase and the
additional time of purchase, the Registration Statement and the Prospectus, and
any supplements or amendments thereto, complied and will comply in all material
respects with the provisions of the Act; and the Registration Statement at all
such times did not and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus at all such times
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
4
provided, however, that the Company and the Selling Shareholders make no
representation or warranty with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you with respect to you to the Company expressly for
use in the Registration Statement or the Prospectus and set forth in the section
of the Registration Statement and the Prospectus entitled "Underwriting"; the
documents incorporated by reference in the Prospectus, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Exchange Act, and do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) As of the date of this Agreement, the Company has an authorized
capitalization as set forth under the column entitled "At October 31, 1996
Actual" in the section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase, the capitalization of the
Company will be as set forth under the column entitled "At October 31, 1996 As
Adjusted" in the section of the Registration Statement and the Prospectus
entitled "Capitalization"; all of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable and are free of statutory and contractual preemptive
rights except as set forth in the Registration Statement with respect to the
capital stock owned by Xxxxxxx Xxxxx Growth Fund for Investment and Retirement
(the "Xxxxxxx Xxxxx Preemptive Right").
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware with full
power and authority to (i) own its properties and conduct its business as
described in the Registration Statement and the Prospectus and (ii) execute and
deliver this Agreement and to issue, sell and deliver the Shares as herein
contemplated.
(d) All of the issued and outstanding shares of capital stock of each
of the subsidiaries of the Company and of Lion Oil Company (collectively, the
"Subsidiaries") are owned directly by the Company (other than Continental Ozark
Holdings, Inc. ("Continental Ozark") as to which the Company owns 65% of the
voting capital stock and other than Lion Oil Company as to which Continental
owns [a 27.75% interest]); all of such shares have been duly authorized and
validly issued and are fully paid and nonassessable and, except as described in
the Prospectus, are owned free and clear of any pledge, lien, encumbrance,
security interest or other claim; there are no outstanding
5
rights, subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the capital stock of any of the
Subsidiaries.
(e) Each of the Subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its respective
jurisdiction of incorporation, with full corporate power and authority to own
its respective properties and to conduct its respective businesses; except as
set forth in the Registration Statement and the Prospectus, the Company does not
own, directly or indirectly, shares of capital stock or other equity interest in
any corporation or entity other than the Subsidiaries.
(f) Each of the Company and each of the Subsidiaries is duly qualified
or licensed by and is in good standing in each jurisdiction in which it owns or
leases property or conducts its business and in each other jurisdiction in which
the failure, individually or in the aggregate, to be so qualified or licensed
could have a material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the Company
and the Subsidiaries taken as a whole; each of the Company and each of the
Subsidiaries is in compliance in all material respects with the laws, orders,
rules, regulations and directives issued or administered by each such
jurisdiction.
(g) Neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of time
or both would constitute a breach of, or default under), its charter or bylaws,
or in the performance or observance of any obligation, agreement, covenant or
condition contained in any license, indenture, lease, mortgage, deed of trust,
bank loan or credit agreement, material supply agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them may be bound or affected. The execution, delivery and
performance of this Agreement, the issuance and sale of the Shares, the
application of the net proceeds thereof as described in the Prospectus and the
consummation of the transactions contemplated hereby will not conflict with, or
result in any breach of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would constitute a breach of, or
default under), the charter or bylaws of the Company or any of the Subsidiaries
or under any provision of any license, indenture, lease, mortgage, deed of
trust, bank loan or credit agreement, material supply agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or their properties may be bound or affected, or
under any federal, state, local or
6
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries.
(h) The Firm Shares and the Additional Shares, when issued and
delivered to and paid for by the Underwriters as contemplated hereby, will be
duly authorized and validly issued and fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive right or
other claim other than the Xxxxxxx Xxxxx Preemptive Right.
(i) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms; the Board of Directors of the Company
or a committee thereof duly authorized by the Board of Directors of the Company
has duly adopted resolutions authorizing the issuance and sale of the Shares by
the Company.
(j) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and the certificates for the Shares
are in due and proper form and the holders of the Shares after making payment
therefor will not be subject to personal liability by reason of being such
holders.
(k) No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and sale
of the Shares as contemplated hereby, other than registration of the Shares
under the Act, clearance of the offering of the Shares with the National
Association of Securities Dealers, Inc. (the "NASD") and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters.
(l) No person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any securities of the
Company in consequence of the issue and sale of the Shares to the Underwriters
hereunder other than with respect to the Xxxxxxx Xxxxx Preemptive Right. Each
person who has the right, contractual or otherwise, to cause the Company to
register pursuant to the Act any securities of the Company in consequence of the
issue and sale of the Shares to the Underwriters hereunder either included such
securities in the Registration Statement or duly waived such right and each
person who has the right, contractual or otherwise, to cause the Company to
issue to it any securities of the Company in consequence of the issue and sale
of the Shares to the Underwriters hereunder has duly waived such right.
(m) KPMG Peat Marwick LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries and report on the
7
historical summaries of revenue and direct operating expenses of Grasslands
System (as defined in such report) are included or incorporated by reference in
the Registration Statement and the Prospectus, are independent public
accountants with respect to the Company as required by the Act and the
applicable published rules and regulations thereunder.
(n) All legal or governmental proceedings, contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have been
so described or filed as required; neither the Company nor any of its
Subsidiaries is a party to any litigation, and there is no such litigation
pending or (to the best knowledge of the Company or any of its Subsidiaries),
threatened or contemplated, which seeks to enjoin or restrain the execution,
delivery and performance of this Agreement, the incurrence of the obligations
set forth herein or the consummation of the transactions contemplated hereby.
(o) There is no action, suit or proceeding pending or threatened
against the Company or any of the Subsidiaries or any of their properties, at
law or in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency that
could result in a judgment, decree or order having a material adverse effect on
the properties, assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a whole.
(p) The audited and unaudited financial statements included in the
Registration Statement and the Prospectus present fairly the consolidated
financial condition of the Company and the Subsidiaries and of Grasslands System
as of the dates indicated and the consolidated results of operations and cash
flows of the Company and the Subsidiaries and of Grasslands System for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved; the pro forma financial information (including the
notes thereto) included in the Registration Statement and the Prospectus (A)
have been prepared in all material respects in accordance with applicable
requirements of Rule 11-02 of Regulation S-X promulgated under the Exchange Act,
and (B) have been properly computed on the bases described therein and the
assumptions used in the preparation of the pro forma financial information
included in the Registration Statement and the Prospectus are reasonably and in
good faith believed by the Company to be reasonable and the adjustments used
therein are reasonably and in good faith believed by the Company to be
appropriate to give effect to the transactions or circumstances referred to
therein.
8
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or the Prospectus, there has not
been: (A) any material adverse change in the properties, assets, operations,
business, business prospects or condition (financial or other), present or
prospective, of the Company and the Subsidiaries taken as a whole; (B) any
transaction, that is material to the Company and the Subsidiaries taken as a
whole, contemplated or entered into by the Company or any of the Subsidiaries;
or (C) any obligation, contingent or otherwise, directly or indirectly incurred
by the Company or any of the Subsidiaries that is material to the Company and
the Subsidiaries taken as a whole.
(r) The Company has obtained the agreement of the shareholders listed
on Schedule C not to sell, contract to sell, grant any option to sell, transfer
or otherwise dispose of, directly or indirectly, any shares of Common Stock, or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock for a period of 180 days from the date of
the Prospectus without the prior written consent of Xxxxxx, Read & Co. Inc.
(s) Neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), the Interstate
Commerce Act or the Energy Policy Act of 1992 or any regulation promulgated by
the Texas Railroad Commission, or any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, or any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material adverse effect on
the properties, assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a whole.
(t) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any applicable
Environmental Laws, the Interstate Commerce Act or the Energy Policy Act of 1992
or under any regulations promulgated by the Texas Railroad Commission, as are
necessary to own, lease and operate its respective properties and to conduct its
business; the Company and each of the Subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
9
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of the Subsidiaries.
(u) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and the Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including without
limitation any capital or operating expenditure required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
reasonably has concluded that such associated costs and liabilities, singly or
in the aggregate, would not have a material adverse effect on the properties,
assets, operations, business, business prospects or condition (financial or
other) of the Company and the Subsidiaries taken as a whole.
(v) Neither the Company nor any of the Subsidiaries, nor any employee
of the Company or any of the Subsidiaries, has made any payment of funds of the
Company or any of the Subsidiaries prohibited by law, and no funds of the
Company or any of the Subsidiaries have been set aside to be used for any
payment prohibited by law.
(w) The Company and the Subsidiaries have filed all federal or state
income or franchise tax returns required to be filed and have paid all taxes
shown thereon as due, and there is no material tax deficiency which has been or
might be asserted against the Company or any of the Subsidiaries; all material
tax liabilities are adequately provided for on the books of the Company and the
Subsidiaries.
(x) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein contemplated.
(y) The Company and the Subsidiaries have good title to all properties
and assets owned or leased by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects
(except such as are described or referred to in the Prospectus and the financial
statements and the notes thereto contained therein or such as do not interfere
with the use made and proposed to be made of such property by the Company and
the Subsidiaries).
(z) Neither the Company nor any of the Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940,
10
as amended, or is subject to regulation under such Act.
4. Further Representations and Warranties of the Selling Shareholders. Each
--------------------------------------------- --------------------
Selling Shareholder, severally and not jointly, further represents and warrants
to each Underwriter that:
(a) Such Selling Shareholder is and at the time of delivery of the
Shares to be sold by such Selling Shareholder will be the lawful owner of the
number of Shares [or securities convertible into or warrants exercisable for the
number of Shares] to be sold by such Selling Shareholder pursuant to this
Agreement and, at the time of delivery thereof, will have valid and marketable
title to such Shares, and upon delivery of and payment for such Shares the
Underwriters will acquire valid and marketable title to such Shares free and
clear of any claim, lien, encumbrance, security interest, community property
right, restriction on transfer or other defect in title, assuming each of the
Underwriters has purchased the Shares purchased by it in good faith and without
notice of any adverse claim.
(b) Such Selling Shareholder has and at the time of delivery of such
Shares will have full legal right, power and capacity, and any approval required
by law to sell, assign, transfer and deliver such Shares in the manner provided
in this Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
such Selling Shareholder. The Power of Attorney executed by the Sellings
Shareholders (the "Power of Attorney") and the Custody Agreement among the
Selling Shareholders and [Name of Custodian] (the "Custody Agreement") have been
duly executed and delivered by such Selling Shareholder and are legal, valid and
binding agreements of such Selling Shareholder, enforceable in accordance with
their terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity.
(d) Such Selling Shareholder has duly and irrevocably authorized the
Attorney-in-Fact (as defined in the Power of Attorney), on behalf of such
Selling Shareholder, to execute and deliver this Agreement and any other
document necessary or desirable in connection with the transactions contemplated
hereby and to deliver the Shares to be sold by such Selling Shareholder and
receive payment therefor pursuant hereto.
(e) The sale of the Shares by such Selling Shareholder pursuant hereto
is not prompted by any material adverse information concerning the Company; and
all information furnished in writing by or on behalf of such Selling Shareholder
specifically for use in the Registration Statement and the Prospectus, and any
supplement or amendment thereto, is and will be when the
11
Registration Statement became effective and at all times subsequent thereto up
to the time of purchase and the additional time of purchase, true and correct
and complete and at all such times did not and will not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) The consummation of the transactions contemplated hereby and by
the Power of Attorney and by the Custody Agreement and the fulfillment of the
terms hereof and thereof will not constitute a breach or violation of or default
under any trust, indenture, agreement or other instrument to which any such
Selling Shareholder is a party or by which any such Selling Shareholder is
bound.
5. Certain Covenants of the Company. The Company hereby agrees:
--------------------------------
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect as long as required for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); promptly to advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and to use its best efforts to obtain the withdrawal of any
order of suspension at the earliest practicable moment;
(b) to make available to you in New York City, as soon as practicable
after the Registration Statement becomes effective, and thereafter from time to
time to furnish to the Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendment or supplement thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated by the
Act;
(c) to advise you promptly and if requested by you to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective and (ii) when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under the Act,
if required under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you promptly, confirming such advice in writing, of
12
any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect thereto,
or of notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or removal
of such order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus, including by
filing any document that would be incorporated therein by reference, and to file
no such amendment or supplement to which you shall object in writing;
(e) to furnish to you and, upon request to each of the other
Underwriters, for a period of five years from the date of this Agreement (i)
copies of all reports or other communications that the Company shall send to its
shareholders or from time to time shall publish or publicly disseminate and (ii)
copies of all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar form as may be designated by the
Commission, and any other document filed by the Company pursuant to Section 12,
13, 14 or 15(d) of the Exchange Act;
(f) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a prospectus relating to the
Shares is required to be delivered under the Act that, in the reasonable
judgment of the Company, would require the making of any change in the
Prospectus then being used, or in the information incorporated therein by
reference, so that the Prospectus, as then supplemented, would not include an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they are made, not misleading and, during such time, promptly to prepare and
furnish, at the Company's expense, to the Underwriters such amendments or
supplements to such Prospectus as may be necessary to reflect any such change in
such quantities as requested by the Underwriters, and to furnish to you a copy
of such proposed amendment or supplement before filing any such amendment or
supplement with the Commission;
(g) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which need not be audited
and which will satisfy the provisions of Section 11(a) of the Act including, at
the option of the Company, Rule 158) covering a period of 12 months beginning
after the effective date of the Registration Statement but ending not later than
15 months after the date of the Registration Statement, as soon as is reasonably
practicable after the termination of such 12-month
13
period;
(h) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference therein)
and sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not later
than two business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements, if any, of the Company and the
Subsidiaries that have been read by the Company's independent certified public
accountants as stated in their letter to be furnished pursuant to Section 8(c);
(j) to apply the net proceeds from the sale of the Shares sold by the
Company in the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and the Prospectus;
(k) to cause the Shares to be listed on the American Stock Exchange;
(l) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement otherwise becomes effective or is terminated, to
pay all expenses, fees and taxes (other than (x) any transfer taxes and (y) fees
and disbursements of your counsel except as set forth under Section 5 and
clauses (iii) and (iv) below) in connection with (i) the preparation and filing
of the Registration Statement, each Preliminary Prospectus, the Prospectus and
any amendment or supplement thereto, and the printing and furnishing of copies
of each thereof to you and to dealers (including costs of mailing and shipment),
(ii) the issuance, sale and delivery of the Shares, (iii) the word processing or
printing of this Agreement and any dealer agreements, and the reproduction or
printing and furnishing of copies of each thereof to you and to dealers
(including costs of mailing and shipment), (iv) the qualification of the Shares
for offering and sale under state laws as aforesaid (including legal fees and
filing fees and other disbursements of your counsel) and the printing and
furnishing of copies of any blue sky surveys to you and to dealers, (v) the
listing of the Shares on the American Stock Exchange and any registration
thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD and (viii) the performance of the Company's
and the Selling Shareholders' other obligations hereunder;
(m) not to sell, contract to sell, grant any option to sell, transfer
or otherwise dispose of, directly or indirectly, any shares of Common
14
Stock or securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock or permit the registration
under the Act of any shares of Common Stock, except for the registration of the
Shares and the sales to you pursuant to this Agreement for a period commencing
on the date hereof and continuing for 180 days after the date of the Prospectus,
without the prior written consent of Xxxxxx, Read & Co. Inc.; and
(n) to refrain from investing the proceeds from the sale of the Shares
in a manner to cause the Company or any of the Subsidiaries to become an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
6. Certain Covenants of the Selling Shareholders. Each Selling
---------------------------------------------
Shareholder agrees with each Underwriter that such Selling Shareholder will not
sell, contract to sell, grant any option to sell, transfer or otherwise dispose
of, directly or indirectly, any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or warrants or other rights to purchase
Common Stock, except for the sales to you pursuant to this Agreement, for a
period commencing on the date hereof and continuing for 180 days after the date
of the Prospectus, without the prior written consent of Xxxxxx, Read & Co. Inc.
7. Reimbursement of Underwriters' Expenses. If the Firm Shares or
---------------------------------------
the Additional Shares are not delivered for any reason, other than the failure
of the Underwriters to purchase the Firm Shares or the Additional Shares as
provided herein (unless such failure is permitted under the provisions of
Section 8 or Section 9(b) of this Agreement), the Company will reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Shareholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at any additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Shareholders on the date hereof and at the time of purchase and at such
additional time of purchase, as the case may be), the performance by each of the
Company and the Selling Shareholders of their obligations hereunder and to the
following conditions:
(a) The Company shall furnish to you at the time of purchase and at
such additional time of purchase, as the case may be, an opinion of Holme
Xxxxxxx & Xxxx, LLP, counsel for the Company, addressed to the Underwriters
15
and dated the time of purchase or such additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in form
satisfactory to Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Underwriters, stating
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority (A) to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus and (B) to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the state in which such Subsidiary is incorporated, with full
corporate power and authority to own its properties and to conduct its
business as described in the Registration Statement and the
Prospectus;
(iii) each of the Company and each of the Subsidiaries is
duly qualified or licensed to do business by and is in good standing
as a foreign corporation in each jurisdiction in which it conducts
business or owns property and in which the failure, individually or in
the aggregate, to be so licensed or qualified could have a material
adverse effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of the Company
and the Subsidiaries taken as a whole;
(iv) all of the issued and outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable and, except for Continental Ozark
as to which the Company owns 65% of the voting capital stock and Lion
Oil Company as to which Continental Ozark owns [a 27.75% interest],
are owned, directly or indirectly, by the Company free and clear of
any pledge, lien, encumbrance, security interest, preemptive right or
other claim, and there are no rights, warrants, options or other
agreements to acquire or instruments convertible into or exchangeable
for any shares of capital stock or other equity interest of any
Subsidiary, except as set forth in the Prospectus;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
16
(vi) (a) the Shares, when delivered to and paid for by the
Underwriters, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of any pledge, lien, encumbrance,
claim or preemptive right other than the Xxxxxxx Xxxxx Preemptive
Right; and (b) the certificates for the Shares are in due and proper
form and the holders of the Shares will not be subject to personal
liability by reason of being such holders;
(vii) (a) the Company has an authorized capitalization as
set forth under the heading "Capitalization" in the Registration
Statement and the Prospectus, and (b) the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid, nonassessable and free of statutory and
contractual preemptive rights other than the Xxxxxxx Xxxxx Preemptive
Right;
(viii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
(ix) the Registration Statement and the Prospectus (except
as to the financial statements and schedules contained or incorporated
by reference therein as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act;
(x) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(xi) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance or sale of the Shares as contemplated
hereby other than registration of the Shares under the Act (except
such counsel need express no opinion as to any necessary qualification
under the state securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters);
(xii) the execution, delivery and performance of this
Agreement by the Company, the issuance and sale of the Shares, the
application of the net proceeds thereof as
17
described in the Prospectus and the consummation by the Company of the
transactions contemplated hereby do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time or both would constitute a
breach of or default under), the charter or bylaws of the Company or
any of the Subsidiaries, or any provision of any license, indenture,
lease, mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their properties are bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries;
(xiii) to the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in breach of or in default
under (nor has any event occurred which with notice, lapse of time or
both would constitute a breach of or default under) any license,
indenture, lease, mortgage, deed of trust, bank loan or credit
agreement or any other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or their properties are bound or affected or under
any law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries, except for such
matters as could not, individually or in the aggregate, have a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole;
(xiv) to the best of such counsel's knowledge, after due inquiry,
neither the Company nor any of the Subsidiaries has violated any
Environmental Laws, the Interstate Commerce Act or the Energy Policy
Act of 1992 or any regulation promulgated by the Texas Railroad
Commission, or any federal or state law relating to discrimination in
the hiring, promotion or pay of employees or any applicable federal or
state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the
18
Subsidiaries taken as a whole;
(xv) the Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, the Interstate Commerce Act, the Energy
Policy Act of 1992 or under any regulation promulgated by the Texas
Railroad Commission, as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner
described in the Prospectus; to the best of such counsel's knowledge,
after due inquiry, the Company and each of the Subsidiaries has
fulfilled and performed all of its material obligations with respect
to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the
holder of any such permit, subject in each case to such qualification
as may be set forth in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of the Subsidiaries;
(xvi) all contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so
described or filed;
(xvii) except as described in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings of which such
counsel has knowledge pending or threatened against the Company or any
of the Subsidiaries, or any of their respective properties, at law or
in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency that individually or in the aggregate could result in a
judgment, decree or order having a material adverse effect on the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole;
(xviii) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), complied as to form in
19
all material respects with the Exchange Act (except as to the
financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such
counsel need express no opinion);
(xix) to the best of such counsel's knowledge, no person has the
right, contractual or otherwise, to cause the Company to issue to it,
or register pursuant to the Act, any securities of the Company in
consequence of the issue and sale of the Shares to the Underwriters
hereunder other than with respect to the Xxxxxxx Xxxxx Preemptive
Right; to the best of such counsel's knowledge, each person who has
the right, contractual or otherwise, to cause the Company to register
pursuant to the Act any securities of the Company in consequence of
the issue and sale of the Shares to the Underwriters hereunder either
included such securities in the Registration Statement or duly waived
such right and each person who has the right, contractual or
otherwise, to cause the Company to issue to it any securities of the
Company in consequence of the issue and sale of the Shares to the
Underwriters hereunder has duly waived such right;
(xx) the statements in the Registration Statement and the
Prospectus under the captions "Business -- Environmental Regulation --
Rate Regulation", "Description of Capital Stock", "Long-Term
Indebtedness" and "Shares Eligible For Future Sale", insofar as they
are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other
legal documents, or refer to statements of law or legal conclusions,
have been reviewed by such counsel and are accurate in all material
respects;
(xxi) neither the Company nor any of the Subsidiaries is an
"investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended; and
(xxii) nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at
20
all times up to and including the time of purchase contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules
included in the Registration Statement or Prospectus).
(b) The Selling Shareholders shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be, an opinion
of __________, counsel for the Selling Shareholders, addressed to the
Underwriters and dated the time of purchase or such additional time of purchase,
as the case may be, with reproduced copies for each of the other Underwriters
and in form satisfactory to Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Underwriters, stating that:
(i) this Agreement, the Power of Attorney and the Custody
Agreement have been duly executed and delivered by each of the Selling
Shareholders; the Power of Attorney and the Custody Agreement are
legal, valid and binding agreements of each of the Selling
Shareholders enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity;
(ii) each of the Selling Shareholders has full legal right and
power, and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue sky
laws of certain jurisdictions), to sell, assign, transfer and deliver
the Shares to be sold by such Selling Shareholder in the manner
provided in this Agreement;
(iii) delivery of certificates for the Shares to be sold by the
Selling Shareholders pursuant hereto will pass title thereto to the
Underwriters severally, free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction
on transfer or other defect in title assuming that the several
Underwriters are good faith purchasers and without notice of any
adverse claim;
(iv) to the best of such counsel's knowledge, the consummation of
the transactions contemplated hereby and by the Power of Attorney and
the Custody Agreement
21
and the fulfillment of the terms hereof and thereof will not
constitute a breach or violation of or default under any trust,
indenture, agreement or other instrument to which any of the Selling
Shareholders is a party or by which any of the Selling Shareholders is
bound;
(v) the Attorney-in-Fact has been duly authorized by each Selling
Shareholder to execute and deliver on behalf of each Selling
Shareholder this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and
to deliver the Shares to be sold by the Selling Shareholders and
receive payment therefor pursuant hereto;
(vi) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the sale of the Shares to be sold by the Selling Shareholders as
contemplated hereby other than registration of the Shares under the
Act (except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters); and
(vii) nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of
purchase contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and
schedules included in the Registration Statement or Prospectus).
(c) You shall have received from KPMG Peat Marwick LLP letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the
22
Underwriters (with reproduced copies for each of the Underwriters) in form and
substance satisfactory to you.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, opinions from Xxxxxx Xxxxxx &
Xxxxxxx in form and substance satisfactory to you.
(e) No amendment or supplement to the Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you shall have objected in writing.
(f) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement and, if Rule 430A
under the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act at or before 5:00 P.M., New York City
time, on the second full business day after the date of this Agreement;
provided, however, that the Company, the Selling Shareholders and you and any
group of Underwriters, including you, who have agreed hereunder to purchase in
the aggregate at least 50% of the Firm Shares from time to time may agree in
writing or by telephone, confirmed in writing, on a later date.
(g) Prior to the time of purchase or the additional time of purchase,
as the case may be: (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there has not
been: (i) any material and adverse change, present or prospective, in the
properties, assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a whole, other
than as described in the Registration Statement and the Prospectus; (ii) any
transaction that is material to the Company and the Subsidiaries taken as a
whole contemplated or entered into by the Company or any of the Subsidiaries,
other than as described in the Registration Statement and the Prospectus; or
(iii) any obligation, contingent or otherwise, directly or
23
indirectly, incurred by the Company or any of the Subsidiaries that is material
to the Company and the Subsidiaries taken as a whole, other than as described in
the Registration Statement and the Prospectus.
(i) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such date
and the conditions set forth in Section 8(g) and Section 8(h) have been met.
(j) You shall have received a signed letter, dated the date of this
Agreement, from each of the shareholders listed in Schedule C to the effect that
such persons shall not sell, contract to sell, grant any option to sell,
transfer or otherwise dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock for a period of 180 days from
the date of the Prospectus without the prior written consent of Xxxxxx, Read &
Co. Inc.
(k) The Company and the Selling Shareholders shall have furnished to
you such other documents and certificates as to the accuracy and completeness of
any statement in the Registration Statement or the Prospectus as of the time of
purchase and the additional time of purchase, as the case may be, as you
reasonably may request.
(l) The Company and the Selling Shareholders shall have performed such
of their respective obligations under this Agreement as are to be performed by
the terms hereof at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(m) The Shares shall have been approved for listing on the American
Stock Exchange.
(n) The Attorney-in-Fact, at the time of purchase or additional time
of purchase, as the case may be, shall have delivered to you a certificate to
the effect that the Attorney-in-Fact is not aware that any of the
representations and warranties of the Selling Shareholders as set forth in this
Agreement are not true and correct as of such date.
(o) On or prior to the date hereof, the NASD shall have approved the
Underwriters' participation in the distribution of the Shares to be sold by the
Selling Shareholders.
9. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective (i) if Rule 430A under the
Act is not used, when you shall have received notification of the effectiveness
of the Registration Statement, or (ii) if Rule 430A under the
24
Act is used, when the parties hereto have executed and delivered this Agreement.
(b) The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York [or American] Stock Exchange shall have been suspended or minimum
prices shall have been established on the New York [or American] Stock Exchange
or if a banking moratorium shall have been declared either by the United States
or New York State authorities, or if the United States shall have declared war
in accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in your
judgment or in the judgment of such group of Underwriters, makes it
impracticable to market the Shares. If you or any group of Underwriters elect to
terminate this Agreement as provided in this Section 9(b), the Company and each
other Underwriter shall be notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to take up and
pay for the Firm Shares to be purchased by it hereunder and if the number of
Firm Shares which all Underwriters so defaulting shall have agreed but failed to
take up and pay for does not exceed 10% of the total number of Firm Shares, the
non-defaulting Underwriters shall take up and pay for (in addition to the
aggregate principal amount of Firm Shares they are obligated to purchase
pursuant to Section 1) the number of Firm Shares agreed to be purchased by all
such defaulting Underwriters as hereinafter provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriter or Underwriters in such
amount or amounts as you may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such non-
defaulting Underwriters in Schedule A.
(d) If any Underwriter shall default in its obligation to take up and
pay for the Firm Shares to be purchased by it hereunder and if the number of
Firm Shares which all Underwriters so defaulting shall have agreed but failed to
take up and pay for exceeds 10% of the total number of Firm Shares, and
arrangements satisfactory to you and the Company are not made
25
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter.
(e) Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted underwriters selected by you with the
approval of the Company or selected by the Company with your approval pursuant
to Section 9(d)). If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter or Underwriters in accordance with Section 9(d), the
Company or you shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary change in
the Registration Statement and the Prospectus and other documents may be
effected. The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 9 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
(f) If the purchase of the Shares by the Underwriters, as contemplated
by this Agreement, is not consummated for any reason permitted under this
Agreement or if such purchase is not consummated because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 5(l), 7 and 10), and the Underwriters shall be under no
obligation or liability to the Company under this Agreement (except to the
extent provided in Section 10) .
10. Indemnity by the Company, the Selling Shareholders and the
----------------------------------------------------------
Underwriters.
------------
(a) The Company and the Selling Shareholders, jointly and severally,
agree to indemnify, defend and hold harmless each Underwriter, each person that
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and each Underwriter's agents, employees, officers and
directors and the agents, employees, officers and directors of any such
controlling person (collectively, the "Underwriter indemnified parties") from
and against any and all losses, claims, damages, judgments, liabilities and
expenses (including the fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action or claim)
which, jointly or severally, any Underwriter indemnified party may incur as they
are incurred (and regardless of whether such Underwriter indemnified party is a
party to the litigation, if any) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement relating
26
to the Shares or the Prospectus or any Preliminary Prospectus, or arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, judgments,
liabilities or expenses arise out of, or are based upon, any such untrue
statement or omission or alleged untrue statement or omission based upon and in
conformity with information with respect to any Underwriter furnished in writing
by any Underwriter through you to the Company expressly for use therein with
reference to such Underwriter; provided, however, that no Selling Shareholder
shall be liable under this Section 10 in an amount exceeding the total price at
which the Shares sold by such Selling Shareholder were offered to the public.
This indemnity agreement will be in addition to any liability the Company or the
Selling Shareholders otherwise may have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Underwriter indemnified party, with respect to which indemnity may be sought
against the Company or A Selling Shareholder pursuant to this Section 10, such
Underwriter indemnified party shall promptly notify the Company and each Selling
Shareholder in writing, and the Company and the Selling Shareholders shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Underwriter indemnified party and payment of all fees and
expenses; provided that the omission so to notify the Company and the Selling
Shareholders shall not relieve them from any liability that they may have to any
Underwriter indemnified party. An Underwriter indemnified party shall have the
right to employ separate counsel in any such action or proceeding and to assume
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the employment of such
counsel has been authorized in writing by the Company or the Selling
Shareholders, (ii) the Company and the Selling Shareholders have failed promptly
to assume the defense and employ counsel satisfactory to the Underwriter
indemnified party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Underwriter indemnified party
and the Company or the Selling Shareholders and such Underwriter indemnified
party shall have reasonably concluded that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Company and the Selling Shareholders (in which case the Company
and the Selling Shareholders shall not have the right to assume the defense of
such action on behalf of such Underwriter indemnified party), in any of which
events such fees and expenses shall be borne by the Company and the Selling
27
Shareholders and reimbursed as they are incurred. It is understood, however,
that the Company and the Selling Shareholders shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all such Underwriter
indemnified parties, which firm shall be designated in writing by Xxxxxx, Read &
Co. Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The Company and the Selling Shareholders shall not be liable for any
settlement of any such action effected without the written consent of the
Company or the Selling Shareholders (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the Company or
the Selling Shareholders, or if there is a final judgment with respect thereto,
the Company and the Selling Shareholders agree to indemnify and hold harmless
each Underwriter indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration Statement,
and any person that controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act (collectively, the "Company indemnified
parties") and each Selling Shareholder to the same extent as the foregoing
indemnity from the Company and the Selling Shareholders to the Underwriter
indemnified parties, but only with respect to information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use with respect to such Underwriter in the
Registration Statement, any Preliminary Prospectus or the Prospectus. In case
any action shall be brought against any Company indemnified party or any Selling
Shareholder based on the Registration Statement, any Preliminary Prospectus or
the Prospectus and in respect of which indemnity may be sought against any
Underwriter pursuant to this Section 10(c), such Underwriter shall have the
rights and duties given to the Company and the Selling Shareholders by Section
10(b) (except that if the Company and the Selling Shareholders shall have
assumed the defense thereof such Underwriter shall not be required to do so, but
may employ separate counsel therein and participate in the defense thereof,
provided that the fees and expenses of such separate counsel shall be at the
expense of such Underwriter), and the Company indemnified parties and the
Selling Shareholders shall have the rights and duties given to the Underwriter
indemnified parties by Section 10(b).
(d) If the indemnification provided for in this Section 10 is
28
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or any Selling Shareholder, then the
party required to indemnify such indemnified party under this Section 10, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, judgments, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Shares, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Shareholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue
statement 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, by the Selling Shareholders or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, judgments, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
10(d) were determined by pro rata allocation or by any other method of
allocation (even if the Underwriters were treated as one entity for such
purpose) which does not take account of the equitable considerations
29
referred to in this Section 10(d). Notwithstanding the provisions of this
Section 10(d), no Underwriter indemnified party shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter indemnified party and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter indemnified party otherwise has been required to pay by reason of
such untrue statement or alleged untrue statement or omission or alleged
omission. 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 pursuant to this Section 10 are several in proportion
to their respective underwriting commitments and are not joint.
The statements under the caption "Underwriting" in the Prospectus (to
the extent such statements relate to an Underwriter) constitute the only
information furnished to the Company in writing by such Underwriter expressly
for use in the Registration Statement, any Preliminary Prospectus or the
Prospectus.
(e) The indemnity and contribution agreements contained in this
Section 10 and the representations, warranties and covenants of the Company and
the Selling Shareholders contained in this Agreement shall remain in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter indemnified party or by or on behalf of any Company indemnified
party or any Selling Shareholder, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. Subject to the provisions
of Section 10(b) and Section 10(c), the Company, each Selling Shareholder and
each Underwriter agree promptly to notify the other of the commencement of any
litigation or proceeding against it in connection with the issuance and sale of
the Shares or in connection with the Registration Statement or the Prospectus.
11. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Xxxxxx, Read & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
2750 Republic Plaza, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
00
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Xx.; and if to the Selling
Shareholders, shall be sufficient in all respects, if delivered or sent to
____________.
12. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
------------
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN
INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS
AGREEMENT.
13. Parties at Interest. The Agreement herein set forth has been
-------------------
and is made solely for the benefit of the Underwriters, the Company, the Selling
Shareholders, the Underwriter indemnified parties and the Company indemnified
parties, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in
------------
counterparts which together shall constitute one and the same agreement among
the parties.
31
If the foregoing correctly sets forth the understanding among the Company, the
Selling Shareholders and the Underwriters, please so indicate in the space
provided below for such purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company, the Selling Shareholders and
the Underwriters, severally.
Very truly yours,
TRANSMONTAIGNE OIL COMPANY
By: __________________________
Name:
Title:
THE SELLING SHAREHOLDERS NAMED
IN SCHEDULE B ATTACHED HERETO
By: __________________________
[ATTORNEY-IN-FACT]
Accepted and agreed to as of
the date first above written,
on behalf of themselves,
X.X. Xxxxxxx & Sons, Inc.
and Xxxxxx Xxxxxxx & Co.
and the other several
Underwriters named in
Schedule A
XXXXXX, READ & CO. INC., as
Managing Underwriter
By: ___________________________
Name:
Title:
32
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
Xxxxxx, Read & Co. Inc. . . . . . . . . . . .
X.X. Xxxxxxx & sons, Inc. . . . . . . . . . .
Xxxxxx Xxxxxxx & Co. . . . . . . . . . . . .
-----
Total
=====
SCHEDULE B
Number of Firm
Name Shares to be Sold
---- -----------------
SCHEDULE C
SHAREHOLDERS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
