Exhibit 1.1
HANOVER COMPRESSOR COMPANY
____% CONVERTIBLE SENIOR NOTES DUE MARCH __, 2008
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Underwriting Agreement
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March ...., 2001
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities, Inc.
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Hanover Compressor Company, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of $150,000,000 principal amount of the Convertible Senior Notes, convertible
into common stock, par value $0.001 per share ("Stock") of the Company,
specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of $22,500,000 additional aggregate principal
amount (the "Optional Securities") (the Firm Securities and the Optional
Securities which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities").
The Company and the Underwriters, in accordance with the requirements of
Rule 2720 ("Rule 2720") of the National Association of Securities Dealers, Inc.
(the "NASD") and subject to the terms and conditions stated herein, also hereby
confirm the engagement of the services of Xxxxxxx, Xxxxx & Co. (the "Independent
Underwriter") as a "qualified independent underwriter" within the meaning of
Section 2(l) of Rule 2720 in connection with the offering and sale of the
Securities.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-.....) (the
"Initial Registration Statement") in respect of the Securities and shares
of the Stock issuable upon conversion thereof has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, delivered to you for each of the
other Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto but excluding Form T-1 and including
(i) the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time such
part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement;
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did 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 the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. or by the Independent Underwriter expressly for use
therein;
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(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission (except that no representation is made
with respect to statements that have been modified or superseded and
consequently excluded from the Registration Statement and Prospectus
pursuant to Rule 412 under the Act), conformed in all material respects to
the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the Commission thereunder,
and none of such documents (except as aforesaid) 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; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder 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; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. or by the Independent Underwriter
expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. or by
the Independent Underwriter expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock, preferred
securities or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them which is
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material to the business of the Company and its subsidiaries, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries;
(g) 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 power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; the shares of Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture referred to below, will be duly and
validly issued, fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims;
(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated as of March ....., 2001 (the "Indenture") between the
Company and. Wilmington Trust Company, as Trustee (the "Trustee"), under
which they are to be issued, which will be substantially in the form filed
as an exhibit to the Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and, when
executed and delivered by the Company and the Trustee, will constitute a
valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof in
the Prospectus;
(j) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture,
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mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, except for
any such conflict, breach, violation or default which would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any
of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except the registration under the Act of the
Securities and the shares of Stock issuable upon conversion thereof, such
as have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(k) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(l) The statements set forth in the Prospectus under the caption
"Description of Convertible Notes", "Description of Capital Stock", insofar
as they purport to constitute a summary of the terms of the Securities and
the Stock, under the caption "Certain U.S. Federal Income Tax
Consequences," and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects;
(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future financial position
taken as a whole, stockholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(n) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(o) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
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(p) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries and the Dresser-Rand
Compression Services Rental and Packaging Division, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(q) Other than as set forth in the Prospectus, the Company and each of
its subsidiaries have obtained all material environmental permits, licenses
and other authorizations required by federal, state, local and foreign law
in order to conduct their businesses as described in the Prospectus; the
Company and each of its subsidiaries are conducting their businesses in
substantial compliance with such permits, licenses and authorizations and
with applicable environmental laws, except where the failure to be in
compliance would not have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; and, except as described in
the Prospectus, the Company is not in violation of any Federal, state,
local or foreign law or regulation relating to the storage, handling,
disposal, release or transportation of hazardous or toxic materials;
(r) The Company and each of its subsidiaries have all licenses,
franchises, permits, authorizations, approvals and orders and other
concessions of and from all governmental or regulatory authorities that are
necessary to own or lease their properties and conduct their businesses as
described in the Prospectus, except for such licenses, franchises, permits,
authorizations, approvals and orders the failure to obtain which will not,
individually or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity, results of operations or
financial prospects of the Company or its subsidiaries taken as a whole;
(s) The Company and each of its subsidiaries is conducting business in
compliance with all applicable statutes, rules, regulations, standards,
guides and orders administered or issued by any governmental or regulatory
authority in the jurisdictions in which it is conducting business, except
where the failure to be so in compliance would not have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations or financial prospects of the Company or its
subsidiaries taken as a whole; and
(t) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, tradenames or other rights to
inventions, know-how, patents, copyrights, confidential information and
intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future financial position, stockholders
equity or results of operations of the Company and its subsidiaries taken
as a whole.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of .....% of the principal amount thereof, plus accrued
interest, if any, from March __, 2001 to the First Time of Delivery hereunder,
the principal amount of Securities set forth opposite the name of such
Underwriter in Schedule I hereto, and (b) in
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the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Securities as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at the same purchase price set
forth in clause (a) of this Section 2, that portion of the aggregate principal
amount of the Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractions of $1,000)
determined by multiplying such aggregate principal amount of Optional Securities
by a fraction, the numerator of which is the maximum aggregate principal amount
of Optional Securities which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum aggregate principal amount of Optional
Securities which all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $22,500,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount of Firm Securities. Any such election
to purchase Optional Securities may be exercised by written notice from you to
the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 5 hereof) or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Company hereby confirms its engagement of the services of the
Independent Underwriter as, and the Independent Underwriter hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Section 2(o) of Rule 2720 with respect to the
offering and sale of the Securities.
(b) The Independent Underwriter hereby represents and warrants to, and
agrees with, the Company and the Underwriters that with respect to the offering
and sale of the Securities as described in the Prospectus:
(i) The Independent Underwriter constitutes a "qualified independent
underwriter" within the meaning of Section 2(o) of Rule 2720;
(ii) The Independent Underwriter has participated in the preparation
of the Registration Statement and the Prospectus and has exercised the
usual standards of "due diligence" in respect thereto;
(iii) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the Act
specifically including those inherent in Section 11 thereof;
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(iv) Based upon (A) a review of the Company, including an examination
of the Registration Statement, information regarding the earnings, assets,
capital structure and growth rate of the Company and other pertinent
financial and statistical data, (B) inquiries of and conferences with the
management of the Company and its counsel and independent public
accountants regarding the business and operations of the Company, (C)
consideration of the prospects for the industry in which the Company
competes, estimates of the business potential of the Company, assessments
of its management, the general condition of the securities markets, market
prices of the capital stock and debt securities of, and financial and
operating data concerning, companies believed by the Independent
Underwriter to be comparable to the Company with debt securities of
maturity and seniority similar to the Securities and that are convertible
into capital stock similar to the Stock issuable upon conversion of the
Securities and the demand for securities of comparable companies similar to
the Securities, and (D) such other studies, analyses and investigations as
the Independent Underwriter has deemed appropriate, and assuming that the
offering and sale of the Securities is made as contemplated herein and in
the Prospectus, the Independent Underwriter recommends, as of the date of
the execution and delivery of this Agreement, that the yield on the
Securities be not less than ...% (corresponding to an initial public
offering price of ...%), which minimum yield should in no way be considered
or relied upon as an indication of the value of the Securities; and
(v) Subject to the provisions of Section 8 hereof, the Independent
Underwriter will furnish to the Underwriters at the First Time of Delivery
a letter, dated the First Time of Delivery, in form and substance
satisfactory to the Underwriters, to the effect of clauses (i) through (iv)
above.
(c) The Independent Underwriter hereby agrees with the Company and the
Underwriters that, as part of its services hereunder, in the event of any
amendment or supplement to the Prospectus, the Independent Underwriter will
render services as a "qualified independent underwriter" within the meaning of
Section 2(l) of Rule 2720 with respect to the offering and sale of the
Securities as described in the Prospectus as so amended or supplemented that are
substantially the same as those services being rendered with respect to the
offering and sale of the Securities as described in the Prospectus (including
those described in subsection (b) above).
(d) The Company, the Underwriters and the Independent Underwriter agree to
comply in all material respects with all of the requirements of Rule 2720
applicable to them in connection with the offering and sale of the Securities.
The Company agrees to cooperate with the Underwriters and the Independent
Underwriter to enable the Underwriters to comply with Rule 2720 and the
Independent Underwriter to perform the services contemplated by this Agreement.
(e) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $10,000 at the
First Time of Delivery. In addition, the Company agrees promptly to reimburse
the Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this Agreement
and the services to be rendered hereunder.
5. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request in writing upon at least forty-eight
hours' notice to the Company prior to the Time of Delivery
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(as defined below), shall be delivered by or on behalf of the Company to
Xxxxxxx, Xxxxx & Co., through the facilities of The Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company in writing to Xxxxxxx,
Xxxxx & Co. at least forty-eight hours in advance of the Time of Delivery. The
Securities to be purchased by each Underwriter hereunder will be represented by
one or more definitive global Securities in book-entry form which will be
deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian. The Company will deliver the Securities to
Xxxxxxx, Xxxxx & Co., for the account of each Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to Xxxxxxx,
Xxxxx & Co. at least forty-eight hours in advance, by causing DTC to credit the
Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause
the certificates representing the Securities to be made available to Xxxxxxx,
Xxxxx & Co. for checking at least twenty-four hours prior to the Time of
Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Securities, 9:30 a.m., New York City time, on ................, 2001
or such other time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree
upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New
York City time, on the date specified by Xxxxxxx, Xxxxx & Co. in the written
notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase
such Optional Securities, or such other time and date as Xxxxxxx, Xxxxx & Co.
and the Company may agree upon in writing. Such time and date for delivery of
the Firm Securities is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Securities, if not the First Time of Delivery,
is herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 8 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 8(k) hereof, will be delivered at the offices of Sidley &
Austin, Bank Xxx Xxxxx, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 2:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 5, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York City are generally
authorized or obligated by law or executive order to close.
6. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to such Time of
Delivery which shall be disapproved by you or the Independent Underwriter
promptly after reasonable notice thereof; to advise you and the Independent
Underwriter promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with
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copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities; to advise
you and the Independent Underwriter, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities or the shares of Stock
issuable upon conversion of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, to promptly use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation, to submit to taxation generally or to file a
general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters and the Independent Underwriter with written and electronic copies
of the Prospectus in New York City in such quantities as you and the Independent
Underwriter may reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the
Securities and the shares of Stock issuable upon conversion of the Securities
and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you and the Independent Underwriter and upon
your request (or, during such period, the Independent Underwriter) to file such
document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many written and electronic copies as you may from
time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities and the shares of Stock issuable
upon conversion of the Securities at any time nine months or more after the time
of issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined
10
in Rule 158(c)), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Securities or
the Stock, including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than (i) pursuant to employee option and
restricted stock plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities, or the exercise of warrants, in each
case outstanding as of, the date of this Agreement or (ii) issuances of shares
of Common Stock pursuant to one or more acquisitions or in one or more private
placements to finance such acquisitions provided that the aggregate number of
shares issued pursuant to this clause (ii) does not exceed 15% of the number of
shares of Common Stock outstanding after giving effect to the underwritten
offering of Common Stock contemplated as of the date of this Agreement and
(except with respect to up to 500,000 shares of Common Stock in the aggregate)
that any person receiving shares of Common Stock in a transaction contemplated
by this clause (ii) shall have entered into an agreement not to sell or hedge
such shares of Common Stock in form acceptable to representatives during such
90-day period), without your prior written consent;
(f) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish or make available to you copies of all
reports or other communications (financial or other) furnished to stockholders,
and to (i) deliver or make available to you as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Securities or any
class of securities of the Company is listed; and (ii) deliver to you such
additional information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such additional
financial information to be on a consolidated basis to the extent the accounts
of the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
11
(j) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities; and
(k) To use its best efforts to list, subject to notice of issuance, the
shares of Stock issuable upon conversion of the Securities on the New York Stock
Exchange (the "Exchange").
7. The Company covenants and agrees with the several Underwriters and the
Independent Underwriter that the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Securities and the shares
of Stock issuable upon conversion of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters, the Independent Underwriter and dealers; (ii) the
cost of printing or producing any Agreement among Underwriters, this Agreement,
the Indenture, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under state
securities laws as provided in Section 6(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 10 and 13 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
8. The respective obligations of the Underwriters and the Independent
Underwriter hereunder shall be subject, in the discretion of the Underwriters or
the Independent Underwriter, as the case may be, to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of such Time of Delivery, true and correct, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed, the condition (in the case of the Underwriters) that the Independent
Underwriter shall have furnished the Underwriters the letter referred to in
clause (v) of Section 4(b) hereof and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 6(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have
12
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Underwriters or the Independent Underwriter, as
the case may be;
(b) Xxxxxx & Xxxxxx, counsel for the Underwriters, shall have furnished to
the Underwriter or the Independent Underwriter, as the case may be, such written
opinion or opinions (a draft of each such opinion is attached as Xxxxx XX(a)
hereto), dated such Time of Delivery, with respect to the matters covered in
paragraphs (i), (ii), (vi), (vii), (viii), (xi) and (xv) of subsection (c)
below as well as such other related matters as the Underwriters or the
Independent Underwriter, as the case may be, may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx & Xxxxxxx, counsel for the Company, shall have furnished to the
Underwriters or the Independent Underwriter, as the case may be, their written
opinion (a draft of such opinion is attached as Xxxxx XX(b) hereto), dated such
Time of Delivery, in form and substance satisfactory to the Underwriters or the
Independent Underwriter, as the case may be, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the shares of Stock initially issuable upon conversion
of the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture, will be duly and validly issued and
fully paid and non-assessable, and will conform in all material respects to
the description of the Stock contained in the Prospectus;
(iii) Based solely on certificates of public officials, the Company
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
listed on Schedule II (such counsel (A) being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of the Company and (B)
stating that they have obtained a certificate from an officer of the
Company stating that the Company conducts business only in the
jurisdictions listed on Schedule II, provided that such counsel shall state
that they believe that both the Underwriters and the Independent
Underwriter, as the case may be, and they are justified in relying upon
such opinions and certificates and that such counsel furnishes such
opinions and certificates to the representatives);
(iv) Each subsidiary of the Company listed on Schedule III has been
duly organized and is validly existing in good standing under the laws of
its jurisdiction of organization; and all of the issued equity interests of
each such subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable (in the case of equity interests of a
subsidiary that is a corporation), and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims other than those described in
the Prospectus (such counsel (A) stating that they have obtained a
certificate from an officer of the Company stating that the subsidiaries of
the Company
13
identified on Schedule III constitute all of its subsidiaries other than
those which individually and in the aggregate would not constitute a
material subsidiary of the Company, and (B) being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates and that such counsel furnishes such opinions and certificates
to the representatives);
(v) To the best of such counsel's knowledge and other than as set forth
in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
individually or in the aggregate could reasonably be expected to have a
material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement has been duly authorized, executed and delivered by
the Company;
(vii) The Securities have been duly authorized, and when issued,
executed and authenticated in accordance with the terms of the Indenture,
and delivered to and paid for by you in accordance with the terms of this
Indenture, will constitute legally valid and binding obligations of the
Company enforceable in accordance with their terms entitled to the benefits
provided by the Indenture, subject as to enforceability to (w) the effect
of bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to or affecting the rights and remedies
of creditors, (x) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or law, and the
discretion of the court before which any proceeding therefor may be
brought, (y) the potential unenforceability under certain circumstances
under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability
where such indemnification or contribution is contrary to public policy,
and (z) no opinion need be expressed as to the waiver of rights or defenses
contained in Section 10.08 of the Indenture; and the Securities and the
Indenture conform in all material respects to the descriptions thereof in
the Prospectus;
(viii) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming due authorization, execution and delivery by
the Trustee) constitutes a legally valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms,
subject as to enforceability to (w) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors, (x) the
effect of general principles of equity, whether enforcement is considered
in a proceeding in equity or law, and the discretion of the court before
which any proceeding therefor may be brought, (y) the potential
unenforceability under certain circumstances under law or court decisions
of provisions providing for the indemnification of or contribution to a
party with respect to a liability where such indemnification or
contribution is contrary to public policy, and (z) no opinion need be
14
expressed as to the waiver of rights or defenses contained in Section 10.08
of the Indenture; and the Indenture has been duly qualified under the Trust
Indenture Act;
(ix) The issue and sale of the Securities being issued at such Time of
Delivery and the compliance by the Company with all of the provisions of
the Securities, the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or the Delaware
General Corporation Law or any federal or New York statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties;
(x) No consent, approval, authorization, order, registration or
qualification of or with any such federal or New York court or governmental
agency or body is required for the issue and sale of the Securities being
issued at such Time of Delivery or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except such
as have been obtained under the Act and the Trust Indenture Act, such as
may be required under the Act in connection with the shares of Stock
issuable upon conversion of the Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(xi) The statements set forth in the Prospectus under the captions
"Description of Convertible Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, under the caption "Certain U.S. Federal Income
Tax Consequences", insofar as the statements under such caption constitute
a summary of legal matters, and under the caption "Underwriting", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate in all material respects;
(xii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
(xiii) To the best of counsel's knowledge, except as have been waived
at such Time of Delivery, there are no persons with registration or similar
rights to have any securities of the Company registered pursuant to the
Registration Statement;
(xiv) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related schedules
and financial data therein, as to which such counsel need express no
opinion), when they were filed with the Commission complied as to form in
all material respects with the requirements of the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder; and
15
(xv) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder;
With such counsel also stating that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters, at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although they are not passing upon, and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained or incorporated by reference in the Registration Statement or the
Prospectus and have not made any independent check or verification thereof,
during the course of such participation, no facts came to their attention
that caused them to believe that the Registration Statement, at the time it
became effective or any further amendment thereto made by the Company prior
to such Time of Delivery 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, as of its
date, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery contained an untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need not express any belief with respect to
the financial statements, schedules and other financial data included or
incorporated by reference in, or omitted from, the Registration Statement
or the Prospectus; and, to such counsel's knowledge, there are no contracts
or other documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed under the
Exchange Act, if by such filing they would be incorporated by reference
therein) or required to be filed as exhibits to the Registration Statement
that are not described or filed as required;
(d) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any post-
effective amendment to the Registration Statement filed subsequent to the date
of this Agreement and also at each Time of Delivery, PricewaterhouseCoopers LLP
shall have furnished to the Underwriters and the Independent Underwriter, as the
case may be, a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to the Underwriters or the
Independent Underwriter, as the case may be, to the effect set forth in Annex I
hereto (the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex I(b)
hereto");
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
16
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock, preferred
securities or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities being issued at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities or preferred securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York or Texas State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;
(h) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the Exchange;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to the
Underwriters and the Independent Underwriter at such Time of Delivery
certificates of officers of the Company satisfactory to the Underwriter and the
Independent Underwriter as to the accuracy of the representations and warranties
of the Company herein at and as of such Time of Delivery, as to the performance
by the Company of all of its obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in subsections (a) and (e)
of this Section and as to such other matters as you may reasonably request.
9. The Independent Underwriter hereby consents to the references to it as
set forth under the caption "Underwriting" in the Prospectus and in any
amendment or supplement thereto made in accordance with Section 6(a) hereof.
17
10. (a) The Company will indemnify and hold harmless each Underwriter and
the Independent Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or the Independent Underwriter, as
the case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. or the Independent Underwriter expressly for use
therein or constitutes a reference to the Independent Underwriter consented to
it pursuant to Section 9 hereof.
(b) Each Underwriter will indemnify and hold harmless the Company and the
Independent Underwriter, as the case may be, against any losses, claims, damages
or liabilities to which the Company or the Independent Underwriter, as the case
may be, may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx
& Co. expressly for use therein; and will reimburse the Company or the
Independent Underwriter, as the case may be, for any legal or other expenses
reasonably incurred by the Company or the Independent Underwriter, as the case
may be, in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) The Independent Underwriter will indemnify and hold harmless the
Company and each Underwriter against any losses, claims, damages or liabilities
to which the Company or such Underwriter, as the case may be, may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Independent Underwriter expressly for use
therein or
18
constitutes a reference to the Independent Underwriter consented to by it
pursuant to Section 9 hereof; and will reimburse the Company or each
Underwriter, as the case may be, for any legal or other expenses reasonably
incurred by the Company or each Underwriter, as the case may be, in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 10 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by each party to this Agreement from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of each party to this Agreement in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Underwriters and the Independent Underwriter shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the total underwriting discounts and
commissions received by the Underwriters, set forth in the table on the cover
page of the Prospectus and the fee payable to the Independent Underwriter
pursuant to the first sentence of Section 4(e) hereof, respectively, bear to the
sum of the total proceeds from the sale of the Securities (before deducting
expenses) in the offering and the fee payable to the Independent Underwriter
pursuant to the first sentence of Section 4(e) hereof. The
19
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or either the Underwriters or the Independent
Underwriter on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Underwriters and the Independent Underwriter agree that it
would not be just and equitable if contribution pursuant to this subsection (e)
were determined by pro rata allocation (even if the Underwriters and the
Independent Underwriter were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(e) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (e), no
Underwriter nor the Independent Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter or the Independent
Underwriter, as the case may be, have otherwise been required to pay by reason
of such untrue 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 in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company under this Section 10 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter or the Independent Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 10 shall be in addition
to any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company or the Independent
Underwriter within the meaning of the Act; and the obligations of the
Independent Underwriter under this Section 10 shall be in addition to any
liability which the Independent Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company or any Underwriters within
the meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein at a Time of Delivery. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Securities, or the Company notifies
you that it has so arranged for the purchase of such Securities, you or the
Company shall have the right to postpone such Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary.
20
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities to be purchased at such Time of
Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Securities which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities to be purchased at such Time of Delivery, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligation of the Underwriters to purchase and of the
Company to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 7 hereof and the indemnity and contribution agreements in Section 10
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
12. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the several Underwriters and the Independent
Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter, the Independent Underwriter or any
controlling person of any Underwriter, the Independent Underwriter or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
13. If this Agreement shall be terminated pursuant to Section 11 hereof,
the Company shall not then be under any liability to any Underwriter or the
Independent Underwriter except as provided in the second sentence of Section
4(e) hereof and Sections 7 and 10 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including reasonable fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter or the Independent Underwriter
except as provided in the second sentence of Section 4(e) hereof and Sections 7
and 10 hereof.
21
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the Independent Underwriter shall be delivered or sent by
mail, letter or facsimile transmission to Xxxxxxx, Xxxxx & Co. as Independent
Underwriter at such address; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 10(d) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Independent Underwriter, the Company and, to the
extent provided in Sections 10 and 12 hereof, the officers and directors of the
Company and each person who controls the Company, the Independent Underwriter or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Securities from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
22
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Underwriters plus one for each
counsel counterparts hereof, and upon the acceptance hereof by you, on behalf of
each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters, the Independent
Underwriter and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
HANOVER COMPRESSOR COMPANY
By:
--------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities, Inc.
By:
----------------------------------
(Xxxxxxx, Xxxxx & Co.)
Xxxxxxx, Xxxxx & Co., as
Independent Underwriter
By:
----------------------------------
23
SCHEDULE I
Principal
Principal Amount of
Amount of Optional Securities
Firm Securities to be Purchased
to be if Maximum Option
Underwriter Purchased Exercised
----------- --------------- -------------------
Xxxxxxx, Xxxxx & Co. $ $
Xxxxxxx Xxxxx Xxxxxx Inc...................
Credit Suisse First Boston Corporation.....
X.X. Xxxxxx Securities, Inc................
------------ -----------
Total............................ $150,000,000 $22,500,000
============ ===========
24
Draft of February 26, 2001
SCHEDULE II
Jurisdictions in Which the Company Conducts Business
SCHEDULE III
Subsidiaries
Draft of February 26, 2001
ANNEX I
DESCRIPTION OF COMFORT LETTER OF PRICEWATERHOUSE COOPERS LLP
Pursuant to Section 8(d) of the Underwriting Agreement,
PricewaterhouseCoopers, LLP shall furnish letters to the Underwriters and the
Independent Underwriter to the effect that:
(i) They (A) are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder and (B) were
independent certified public accountants with respect to the Dresser-Rand
Compression Services Rental and Packaging Division (the "Division") during
the respective periods covered by the financial statements of the Division
incorporated by reference in the Registration Statement or the Prospectus
audited by PricewaterhouseCoopers LLP and through the date of its report
issued thereon;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) of the Company or the
Division examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows of the Company and the Division
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached hereto; and
on the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated
financial statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries and the Division, inspection
of the minute books of the Company and its subsidiaries (including, without
limitation, entities included in the Division) since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
(including, without limitation, entities included in the Division)
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus of the Company and the Division do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows of the Company and the Division included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be conformity
with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year or in the case of
items relating to the Division or OEC, the audited financial statement
of the Division incorporated by reference in the Registration Statement
or the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
I-2
or incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options or
warrants, upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the date
of the latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated preferred securities or
long-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
I-3
