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EXHIBIT 1.1
TORCH OFFSHORE, INC.
5,000,000 SHARES
COMMON STOCK
($0.01 Par Value)
UNDERWRITING AGREEMENT
June ___, 2001
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UNDERWRITING AGREEMENT
June ___, 2001
UBS Warburg LLC
CIBC World Markets Corp.
Xxxxxx Xxxx, a division of
Xxxx Xxxxx Xxxx Xxxxxx, Inc.
as representatives of the Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Torch Offshore, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom UBS Warburg LLC ("UBSW"), CIBC World
Markets Corp. and Xxxxxx Xxxx, a division of Xxxx Xxxxx Xxxx Xxxxxx, Inc., are
acting as representatives, an aggregate of 5,000,000 shares (the "Firm Shares")
of Common Stock, $0.01 par value (the "Common Stock"), of the Company. In
addition, solely for the purpose of covering over-allotments, the Company and
the persons named in Schedule B annexed hereto (the "Selling Stockholders")
propose to grant to the Underwriters the option to purchase from the Company and
the Selling Stockholders up to an additional 750,000 shares, in the aggregate,
of Common Stock (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the "Shares." The
Shares are described in the Prospectus which is referred to below.
The Company hereby acknowledges that in connection with the
proposed offering of the Shares, it has requested UBSW to administer a directed
share program (the "Directed Share Program") under which up to 250,000 Firm
Shares, or 5% of the Firm Shares, to be purchased by you (the "Reserved Shares")
shall be reserved for sale by you at the initial public offering price to the
Company's directors, officers, employees and certain business associates and
other persons, including family members, with a relationship to such persons
(the "Directed Share Participants") as part of the distribution of the Shares by
the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. ("NASD") and all other applicable laws, rules and regulations. The
number of Shares available for sale to the general public will be reduced to the
extent that Directed Share Participants purchase Reserved Shares. You may offer
any Reserved Shares not purchased by Directed Share Participants to the general
public on the same basis as the other Shares being issued and sold hereunder.
The Company has supplied UBSW with the names, addresses and telephone numbers of
the individuals or other entities that the Company previously designated in
writing to UBSW as Directed Share Participants. It
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is understood that any number of those designated to participate in the Directed
Share Program may decline to do so.
Immediately prior to the consummation of the sale of the Firm
Shares to the Underwriters pursuant hereto, Torch, Inc., a Louisiana corporation
("Torch"), Riverside Investments, LLC, a Delaware limited liability company
("Riverside"), and Friends of Lime Rock LP, a Delaware limited partnership
("Lime Rock"), will contribute their interests, constituting all of the
outstanding membership interests, in Torch Offshore, L.L.C., a Delaware limited
liability company ("Torch LLC"), to the Company in exchange for shares of Common
Stock of the Company (the "Contribution Shares") pursuant to that certain
Contribution Agreement, dated as January 15, 2001, between the Company, Torch,
Riverside and Lime Rock (the "Contribution Agreement"). The transactions
contemplated by the Contribution Agreement are referred to herein as the
"Contribution." As a result of the Contribution, Torch LLC will become a wholly
owned subsidiary of the Company.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(Registration No. 333-54120), including a prospectus, relating to the Shares.
The Company has furnished to you, for use by the Underwriters and by dealers,
copies of one or more preliminary prospectuses (each thereof being herein called
a "Preliminary Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it becomes
effective, including all documents filed as a part thereof, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430(A) under the Act and
also including any registration statement filed pursuant to Rule 462(b) under
the Act, is herein called the "Registration Statement." The prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second Business Day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the "Prospectus."
The Company, the Selling Stockholders and the Underwriters
agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
aggregate number of Firm Shares set forth opposite the name of such Underwriter
in Schedule A attached hereto in each case at a purchase price of $[ ] per
Share. The Company is advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon after
the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company and the Selling Stockholders hereby
grant to the several Underwriters the option to purchase, and upon the basis of
the warranties and representations and subject to the terms and conditions
herein set forth, the Underwriters shall have the right to purchase, severally
and not jointly, from each of the Company and the Selling
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Stockholders, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover sales of Shares in excess of the number of Firm Shares, at
the same purchase price per share to be paid by the Underwriters to the Company
for the Firm Shares, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Firm Shares but not
payable on the Additional Shares. The maximum number of Additional Shares to be
sold by the Company is 375,000, and the maximum aggregate number of Additional
Shares to be sold by the Selling Stockholders is 375,000. The maximum number of
Additional Shares that each Selling Stockholder agrees to sell is set forth
opposite the name of such Selling Stockholder in Schedule B hereto. This option
may be exercised by you on behalf of the several Underwriters at any time, or
from time to time, on or before the thirtieth day following the date hereof, by
written notice to the Company and the Selling Stockholders. Each such notice
shall set forth the aggregate number of Additional Shares as to which the option
is being exercised, and the date and time when such Additional Shares are to be
delivered (each such date and time being herein referred to as an "Additional
Time of Purchase"); provided, however, that no Additional Time of Purchase shall
be (i) earlier than the Time of Purchase (as defined below), (ii) earlier than
the second day on which the New York Stock Exchange is open for trading (such a
day being referred to herein as a "Business Day") after the date on which the
option regarding such Additional Shares shall have been exercised, or (iii)
later than the tenth Business Day after the date on which the option regarding
such Additional Shares shall have been exercised. The number of Additional
Shares to be sold to each Underwriter at any Additional Time of Purchase shall
be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased at such Additional Time of Purchase as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
If the Underwriters exercise the option granted hereby for less than the full
number of Additional Shares that may be purchased by them, the number of
Additional Shares to be sold by the Company and each of the Selling Stockholders
at the relevant Additional Time of Purchase shall be the number which bears the
same proportion to the aggregate number of Additional Shares being purchased at
such Additional Time of Purchase as 375,000 (in the case of the Company) and the
maximum number of Additional Shares set forth opposite the name of each Selling
Stockholder on Schedule B hereto (in the case of the Selling Stockholders) bears
to the total number of Additional Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on , 2001 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 9
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Time of Purchase." Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second Business Day preceding the Time
of Purchase. For the purpose of expediting the checking of the certificates for
the Firm Shares by you, the Company agrees to make such certificates available
to you for such purpose at least one full Business Day preceding the Time of
Purchase.
Payment of the purchase price for any Additional Shares shall
be made to the Company and to the Selling Stockholders at each Additional Time
of Purchase in the same
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manner and at the same office as the payment for the Firm Shares. Certificates
for such Additional Shares shall be delivered to you in definitive form in such
names and in such denominations as you shall specify no later than the second
Business Day preceding the applicable Additional Time of Purchase. For the
purpose of expediting the checking of the certificates for the Additional Shares
by you, the Company and the Selling Stockholders agree to make such certificates
available to you for such purpose at least one full Business Day preceding the
applicable Additional Time of Purchase.
3. Representations and Warranties of the Company, Torch and
the Selling Stockholders.
(a) The Company and Torch hereby jointly and severally
represent and warrant to each of the Underwriters, Riverside and Lime
Rock as of the date hereof, the Time of Purchase and each Additional
Time of Purchase (if any) and agree with each of the Underwriters,
Riverside and Lime Rock as follows:
(i) the Registration Statement has become effective
under the Act, and the Company has not received, and has no
notice of, any order of the Commission preventing or
suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose; and each Preliminary
Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act; at the times
the Registration Statement and any post-effective amendments
thereto became effective and at the Time of Purchase (and if
any Additional Shares are purchased, at any Additional Time of
Purchase), the Registration Statement and the Prospectus
complied and will comply in all material respects with the
provisions of the Act, and the Registration Statement did not
and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
the Prospectus did not and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; all
legal or governmental proceedings, statutes, regulations,
contracts, leases or other documents that are required to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement have
been so described or filed; provided, however, that the
Company makes no warranty or representation with respect to
any statement contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with information concerning the Underwriters and furnished in
writing by or on behalf of any Underwriter through you to the
Company expressly for use in the Registration Statement or the
Prospectus; and the Company has not distributed any offering
material in connection with the offering or sale of the Shares
other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or other materials, if any,
permitted by the Act;
(ii) as of the Time of Purchase and each Additional
Time of Purchase, as the case may be, the authorized, issued
and outstanding capital stock of the Company shall be as set
forth under the heading entitled "Pro forma for the
Contribution and the offering" in the section of the
Registration Statement and the Prospectus entitled
"Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, employee benefit plans referred to
in the Prospectus or the exercise of options referred to in
the
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Prospectus); as of the date of this Agreement, there are 1,000
shares of Common Stock issued and outstanding (the "Initial
Shares"), all of which are owned by Torch free and clear of
all liens and other encumbrances; the Initial Shares have been
duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all
federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of
first refusal or similar right;
(iii) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, and has corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement and
the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as herein contemplated;
(iv) the Company is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction
where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except
where the failure to so qualify would not have a material
adverse effect on the business, properties, financial
condition, results of operation or prospects of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole
(a "Material Adverse Effect");
(v) as of the date of this Agreement, the Company has
no subsidiaries; as of the Time of Purchase and any Additional
Time of Purchase, the Company will have no subsidiaries other
than Torch LLC, Torch S.A., a corporation organized under the
laws of the Grand Duchy of Luxembourg, Torch N.V., a
corporation incorporated under the laws of the Netherlands
Antilles, and Torch Deepwater, Inc., a Louisiana corporation
(collectively, the "Subsidiaries"); as of the Time of Purchase
and any Additional Time of Purchase, the Company will own,
either directly or indirectly, 100% of the outstanding capital
stock or membership interests, as the case may be, of each of
the Subsidiaries; other than the Subsidiaries, the Company
does not own, directly or indirectly, any shares of common
stock or any other equity or debt securities of any
corporation, limited liability company, partnership or other
entity or have any equity interest in any firm, partnership,
joint venture, association or other entity; complete and
correct copies of the certificates of incorporation, bylaws,
limited liability company agreements and other organizational
documents, as applicable, (collectively, the "Organizational
Documents") of the Company and the Subsidiaries and all
amendments thereto have been delivered to you, and except as
set forth in the exhibits to the Registration Statement no
changes therein will be made subsequent to the date hereof and
prior to the Time of Purchase or any Additional Time of
Purchase; each Subsidiary has been duly incorporated or formed
and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of
its incorporation or formation, and has corporate or limited
liability company power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus
and, in the case of Torch LLC, to execute and deliver this
Agreement and to perform its obligations hereunder; each
Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the
ownership or leasing of the properties or
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the conduct of its business requires such qualification,
except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect and each of the
Subsidiaries is in compliance with the laws, orders, rules,
regulations and directives enacted, adopted, issued or
administered by such jurisdictions, except where the failure
to so comply could not reasonably be expected to have a
Material Adverse Effect; all of the outstanding shares of
capital stock and membership interests of each of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance
with all federal and state securities laws and were not issued
in violation of any preemptive right, resale right, right of
first refusal or similar right and at the Time of Purchase and
any Additional Time of Purchase will be owned by the Company,
directly or indirectly, subject to no security interest, other
encumbrance or adverse claims; no options, warrants or other
rights to purchase, agreements or other obligations to issue
or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are
outstanding;
(vi) none of the Company, Torch and the Subsidiaries
is in breach of, or in default under or in (nor has any event
occurred which with notice, lapse of time, or both would
result in any breach of, or constitute a default under or in),
its respective Organizational Documents or the performance or
observance of any obligation, agreement, covenant or condition
contained in any license, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument to which the Company, Torch or any of the
Subsidiaries is a party or by which any of them or any of
their properties is bound, except for such defaults that,
individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the
issuance and sale of the Shares (and the use of the proceeds
therefrom as described in the Registration Statement and the
Prospectus under the heading "Use of Proceeds") and the
consummation of the transactions contemplated hereby will not
conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice,
lapse of time, or both would result in any breach of, or
constitute a default under), any provisions of the
Organizational Documents of the Company, Torch or any of the
Subsidiaries or under any provision of any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company, Torch or
any of the Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under
any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company,
Torch or any of the Subsidiaries;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company, Torch LLC and Torch and
is a legal, valid and binding agreement of the Company, Torch
LLC and Torch enforceable in accordance with its terms; and
the Contribution Agreement has been duly authorized, executed
and delivered by the Company and is a legal, valid and binding
agreement of the parties thereto enforceable in accordance
with its terms, except that (i) enforceability may be limited
by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to
or
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affecting creditors' rights generally, and by general
principles of equity, regardless of whether that
enforceability is considered in a proceeding in equity or at
law and (ii) rights to indemnity and contribution hereunder
may be limited by federal or state securities laws;
(viii) the capital stock of the Company, including
the Shares, conforms to the description thereof contained in
the Registration Statement and the Prospectus, and such
description conforms to the rights set forth in the
instruments defining the same; and the certificates for the
Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability solely by
reason of being such holders;
(ix) the Shares and the Contribution Shares have been
duly and validly authorized and, when issued and delivered
against payment therefor as provided herein and in the
Contribution Agreement, will be duly and validly issued, fully
paid and non-assessable and the issuance of the Shares and the
Contribution Shares is not subject to the preemptive or other
similar rights of any securityholder of the Company;
(x) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transactions
as contemplated hereby other than registration of the Shares
under the Act and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or
under the rules and regulations of the NASD;
(xi) no person has the right, contractual or
otherwise, to cause the Company or any Subsidiary to issue to
it, or register pursuant to the Act, any shares of capital
stock or other ownership interests of the Company or any
Subsidiary upon the issue and sale of the Shares to the
Underwriters hereunder other than those that have been
expressly waived prior to the date hereof, nor does any person
have preemptive rights, co-sale rights, rights of first
refusal or other rights to purchase any of the Shares other
than those that have been expressly waived prior to the date
hereof;
(xii) Xxxxxx Xxxxxxxx LLP, whose reports on the
consolidated financial statements of the Company and of Torch
LLC and its predecessor, Torch, are filed with the Commission
as part of the Registration Statement and the Prospectus, are
independent public accountants with respect to each of the
Company, Torch LLC, Torch and the Subsidiaries as required by
the Act;
(xiii) each of the Company, Torch and the
Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, in
order to conduct its respective business; neither the Company,
Torch nor any of the Subsidiaries is in violation of, or in
default under, any such license, authorization, consent or
approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment
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applicable to the Company, Torch or any of the Subsidiaries
except for such violations or defaults as could not reasonably
be expected to result in a Material Adverse Effect;
(xiv) there are no actions, suits, claims,
investigations or proceedings pending or, to the knowledge of
the Company, threatened to which the Company, Torch or any of
the Subsidiaries or any of their respective officers is a
party or of which any of their respective properties is
subject at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission,
board, body, authority or agency which could reasonably be
expected to result in a judgment, decree or order having a
Material Adverse Effect or which could reasonably be expected
to prevent consummation of the transactions contemplated
hereby and the aggregate of all pending legal or governmental
proceedings to which the Company, Torch or any of the
Subsidiaries is a party or of which any of their respective
properties is subject which are not described in the
Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect;
(xv) the financial statements, together with the
related schedules and notes thereto, included in the
Registration Statement and the Prospectus of (A) Torch LLC and
its predecessor Torch present fairly in all material respects
the consolidated financial position of Torch LLC, Torch and
the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of Torch
LLC, Torch and the Subsidiaries for the periods specified and
(B) the Company present fairly the financial position of the
Company as of the date indicated; such financial statements
have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
during the periods involved; the supporting schedules, if any,
included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated
therein; the pro forma condensed consolidated financial
statements of the Company and related notes thereto included
in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to
the transaction and circumstances referred to therein; the
summary historical and pro forma financial information and
selected historical financial information included in the
Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited and pro forma financial
statements included in the Registration Statement and the
Prospectus;
(xvi) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been (A) any material adverse
change, or any development which, in the Company's reasonable
judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the
Registration Statement, or the business, properties, financial
condition, results of operations, or prospects of the Company
and the Subsidiaries taken as a whole, (B) any
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transaction which is material to the Company or the
Subsidiaries, except transactions in the ordinary course of
business, other than as contemplated in the Registration
Statement and the Prospectus, (C) any obligation, direct or
contingent, which is material to the Company and the
Subsidiaries taken as a whole, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary
course of business, other than as contemplated in the
Registration Statement and the Prospectus, (D) any change in
the capital stock or outstanding indebtedness of the Company
or the Subsidiaries other than as contemplated in the
Registration Statement and the Prospectus or (E) any dividend
or distribution of any kind declared, paid or made on the
capital stock of the Company; neither the Company nor any of
the Subsidiaries has any material contingent obligation which
is not disclosed in the Registration Statement and the
Prospectus;
(xvii) each of the Company and Torch LLC has obtained
the agreement of each of its directors and executive officers
that such persons shall not, for a period of 180 days after
the date hereof, without the prior written consent of UBSW,
(A) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to
purchase Common Stock, whether now owned or hereafter acquired
by such person or with respect to which such person now has or
hereafter acquires the power of disposition, or (B) enter into
any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (A) or (B)
above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, except (x) as a bona
fide gift or gifts to members of the immediate family of such
person or (y) to any trust for the direct or indirect benefit
of such person or immediate family member, provided that,
prior to such transfer and as a condition thereof, the
transferee shall deliver to UBSW a written agreement to be
bound by the restrictions set forth herein until the
expiration of the aforementioned 180 day period;
(xviii) none of the Company, Torch and the
Subsidiaries is, and, after giving effect to the offering and
sale of the Shares and the application of the proceeds
therefrom as described in the Registration Statement and the
Prospectus, none of them will 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");
(xix) each of the Company, the Subsidiaries and Torch
is in compliance with all federal, state, local and foreign
laws and regulations respecting employment and employment
practices, terms and conditions of employment and wages and
hours, except where such noncompliance could not reasonably be
expected to have a Material Adverse Effect; there is no
strike, picketing, boycott, dispute, slowdown or stoppage
pending or, to the knowledge of the Company, threatened
against or involving the Company, any of the Subsidiaries or
Torch or any predecessor entity; no representation question
exists respecting the employees of the Company, any of the
Subsidiaries or Torch, and no
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collective bargaining agreement or modification thereof is
currently being negotiated by the Company, any of the
Subsidiaries or Torch; no grievance or arbitration proceeding
is pending under any expired or existing collective bargaining
agreement of the Company, any of the Subsidiaries or Torch; no
general labor dispute with the employees of the Company, any
of the Subsidiaries or Torch exists or, to the knowledge of
the Company, is imminent;
(xx) the Company and the Subsidiaries own or possess,
or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including
trade secrets and all other unpatented and/or unpatentable
proprietary or confidential information, systems or
procedures), trademarks, trademark registrations, service
marks, service xxxx registrations, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and
none of the Company, Torch and the Subsidiaries has received
any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate
to protect the interest of the Company, Torch and the
Subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(xxi) except as described in the Prospectus under
"Underwriting," there are no claims, payments, issuances,
arrangements or understandings, whether written or oral, for
services in the nature of a finder's or origination fee with
respect to the sale of the Shares hereunder caused by the
Company, Torch or any of the Subsidiaries or as a result of
any action by the Company, Torch or any of the Subsidiaries or
any other arrangements, agreements, understandings, payments
or issuance with respect to the Company, Torch or any of the
Subsidiaries or any of their officers, directors,
stockholders, members, partners, employees or affiliates that
may affect the Underwriters' compensation as determined by the
NASD;
(xxii) the minute books of the Company, Torch and the
Subsidiaries have been made available to the Underwriters and
contain a complete summary of all meetings and actions of the
directors, stockholders, members, audit committee,
compensation committee and any other committee of the Board of
Directors of the Company, Torch or the Subsidiaries since the
time of their respective incorporation or formation, and
reflect all transactions referred to in such minutes
accurately in all material respects;
(xxiii) except as described in the Registration
Statement and the Prospectus and except as could not
reasonably be expected, singly or in the aggregate, to result
in a Material Adverse Effect, (A) none of the Company, Torch
and the Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or
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wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company, Torch and the Subsidiaries have all
permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or, to the
knowledge of the Company, threatened administrative,
regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law
against or relating to the Company, Torch or any Subsidiary or
any of their respective properties, and (D) there are no
events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company,
Torch or any Subsidiary or any of their respective properties
relating to Hazardous Materials or any Environmental Laws;
(xxiv) the Company and the Subsidiaries have good and
defensible title to all real property owned by them and good
title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind
except such as (A) are described in the Registration Statement
and the Prospectus or (B) do not, singly or in the aggregate,
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 the Subsidiaries; and all of the
leases and subleases material to the business of the Company
and the Subsidiaries, considered as one enterprise, and under
which the Company and the Subsidiaries hold properties
described in the Registration Statement and the Prospectus,
are in full force and effect, and none of the Company, Torch
nor any of the Subsidiaries has received written notice of any
material claim of any sort that has been asserted by anyone
adverse to the rights of the Company, Torch or the
Subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company,
Torch or any Subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease;
(xxv) except as disclosed in the Registration
Statement and the Prospectus, there are no persons with
registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the Act; with
respect to the Registration Statement and offering of the
Shares contemplated thereby, all such registration and similar
rights have been irrevocably waived by the holders thereof and
any such waivers are valid, binding and enforceable against
such holders;
(xxvi) no relationship, direct or indirect, exists
between or among the Company, Torch or any of the
Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, Torch or
any of
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the Subsidiaries on the other hand, that is required to be
described in the Registration Statement and the Prospectus and
is not so described;
(xxvii) the Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and
customary in the subsea construction industry; neither the
Company nor Torch has any reason to believe that the Company
or any of the Subsidiaries will not be able to renew its
existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its operations, except where the failure
to renew or maintain such coverage could not, individually or
in the aggregate, reasonably be expected to result in a
Material Adverse Effect;
(xxviii) the Company, Torch and each of the
Subsidiaries has timely filed all federal, state, local and
foreign tax returns that are required to be filed or has duly
requested extensions thereof and all such tax returns are
true, correct and complete, except to the extent that any
failure to file or request an extension or any failure to be
correct and complete could not reasonably be expected to
result in a Material Adverse Effect; the Company, Torch and
each of the Subsidiaries has timely paid all taxes shown as
due on such filed tax returns (including any related
assessments, fines or penalties), except to the extent that
any such taxes are being contested in good faith and by
appropriate proceedings, or to the extent that any failure to
pay could not reasonably be expected to result in a Material
Adverse Effect; and adequate charges, accruals and reserves
have been provided for in the financial statements referred to
in Section 3(a)(xv) above in accordance with GAAP in respect
of all federal, state, local and foreign taxes for all periods
as to which the tax liability of the Company, Torch or any
Subsidiary, as the case may be, has not been finally
determined or remains open to examination by applicable taxing
authorities;
(xxix) the statistical and market-related data
included in the Registration Statement and the Prospectus are
derived from sources which the Company reasonably and in good
faith believes to be accurate, reasonable and reliable, and
the Company agrees, or has no reason to disagree, with the
sources from which such data was derived;
(xxx) the Company and each of the Subsidiaries has
established a system of internal accounting controls
sufficient to provide reasonable assurances that (A)
transactions were, are and will be executed in accordance with
management's general or specific authorization; (B)
transactions were, are and will be recorded as necessary to
permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (C) access to
assets was, is and will be permitted only in accordance with
management's general or specific authorizations; and (D) the
recorded accountability for assets was, is and will be
compared with existing assets at reasonable intervals and
appropriate action was, is and will be taken with respect to
any differences;
(xxxi) neither the Company nor Torch has any reason
to believe that the transactions contemplated by the
Contribution Agreement will not be consummated in accordance
with the Contribution Agreement at or prior to the Closing
Time; there have been no amendments or supplements to the
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Contribution Agreement since the original execution thereof on
January 15, 2001; at or prior to the Time of Purchase, the
transactions contemplated by the Contribution Agreement will
be consummated, with the result that Torch LLC will become a
wholly-owned subsidiary of the Company and all membership
interests in Torch LLC shall be converted, pursuant to the
Contribution Agreement, into (A) in the case of Torch,
7,504,000 shares of Common Stock, (B) in the case of
Riverside, 789,952 shares of Common Stock and (C) in the case
of Lime Rock, 38,381 shares of Common Stock; none of the
Company, Torch or any of the Subsidiaries nor any of their
respective "affiliates" (as defined in Rule 501(b) of
Regulation D under the 0000 Xxx) has directly, or through any
agent, (A) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of any "security" (as defined
in the Act), including any of the shares of Common Stock
issued to Torch, Riverside and Lime Rock as contemplated by
the Contribution Agreement, in a manner that would require the
registration under the Act of any such security, or (B)
engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
0000 Xxx) in connection with the offering of any such security
or in any manner involving a public offering within the
meaning of Section 4(2) of the Act; it is not necessary in
connection with the offer, sale and delivery of the
Contribution Shares as contemplated by the Contribution
Agreement to register such offer or sale under the Act or any
state law; and
(xxxii) The Common Stock has been approved for
listing on the NASD Automated Quotation National Market System
(the "Nasdaq National Market").
(b) Each Selling Stockholder represents and warrants,
severally and not jointly, to each of the Underwriters as of the date
hereof and as of each Additional Time of Purchase (if any), and agrees
with each of the Underwriters, as follows:
(i) such Selling Stockholder has reviewed and is
familiar with the Registration Statement and the Prospectus
and, with respect to information furnished by such Selling
Stockholder for use therein, neither the Registration
Statement nor the Prospectus contains any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements therein not misleading;
(ii) such Selling Stockholder has full corporate or
partnership power and authority to enter into this Agreement
and a form of Power of Attorney and Custody Agreement (the
"Custody Agreement") among such Selling Stockholder, Xxxxxxx
X. Xxxxxxxxx and Xxxx X. Xxxxx, as Attorneys-in-Fact (the
"Attorneys-in-Fact"), and American Stock Transfer & Trust Co.,
as Custodian (the "Custodian"), and to sell, transfer and
deliver the Securities to be sold by such Selling Stockholder
hereunder; the execution and delivery of this Agreement and
the Custody Agreement, the sale and delivery of the Shares to
be sold by such Selling Stockholder and the consummation of
the transactions contemplated herein and therein and
compliance by such Selling Stockholder with its obligations
hereunder and thereunder have been duly authorized by such
Selling Stockholder and do not and will not, whether with or
without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Shares to be sold by such Selling
Stockholder or any
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property or assets of such Selling Stockholder pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or
instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder may be bound, or to which any
of the property or assets of such Selling Stockholder is
subject (but only to the extent that any such conflict,
breach, default, tax, lien, charge or encumbrance adversely
affects the ability of such Selling Stockholder to deliver
good and marketable title to the Shares to be sold by the
Selling Stockholder hereunder), nor will such action result in
any violation of the provisions of the charter or by-laws or
other organizational instrument or document of such Selling
Stockholder, if applicable, or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court having
jurisdiction over such Selling Stockholder or any of its
properties;
(iii) such Selling Stockholder (together with such
Selling Stockholder's spouse, if applicable) will at such
Additional Time of Purchase have good and marketable title to
the Shares to be sold by such Selling Stockholder hereunder,
free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other
than pursuant to this Agreement and the Custody Agreement; and
upon delivery of such Shares and payment of the purchase price
therefor as herein contemplated, assuming each such
Underwriter has no notice of any adverse claim, each of the
Underwriters will receive good and marketable title to the
Shares purchased by it from such Selling Stockholder, free and
clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind;
(iv) such Selling Stockholder has duly executed and
delivered, in the form heretofore furnished to the
Underwriters, the Custody Agreement; the Custodian is
authorized to deliver the Shares to be sold by such Selling
Stockholder hereunder and to accept payment therefor; and each
Attorney-in-Fact is authorized to execute and deliver this
Agreement and the certificate referred to in Section 7(i), to
sell, assign and transfer to the Underwriters the Shares to be
sold by such Selling Stockholder hereunder, to authorize the
delivery of the Shares to be sold by such Selling Stockholder
hereunder, to accept payment therefor, and otherwise to act on
behalf of such Selling Stockholder in connection with this
Agreement;
(v) such Selling Stockholder has not taken, and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Shares;
(vi) no filing with, or consent, approval,
authorization, license, order, registration, qualification or
decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the
performance by such Selling Stockholder of its obligations
hereunder or in the Custody Agreement, or in connection with
the offer, sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder or the consummation by such
Selling Stockholder of the transactions contemplated by this
Agreement, except such as
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may have previously been made or obtained or as may be
required under the Act or state securities laws;
(vii) such Selling Stockholder has, pursuant to the
Custody Agreement, irrevocably committed to place in custody
with the Custodian prior to such Additional Time of Purchase
certificates, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, for all of the
Shares to be sold by such Selling Stockholder pursuant to this
Agreement, with irrevocable conditional instructions to
deliver such Shares to the Underwriters pursuant to this
Agreement;
(viii) all conditions to consummation of the
transactions set forth in the Contribution Agreement to be
satisfied by such Selling Stockholder have been satisfied, and
such Selling Stockholder has no reason to believe that such
transactions will not be consummated in accordance with the
Contribution Agreement at or prior to the Closing Time; there
have been no amendments or supplements to the Contribution
Agreement since the original execution thereof on January 15,
2001; at or prior to the Time of Purchase, the transactions
contemplated by the Contribution Agreement will be
consummated, with the result that all of such Selling
Stockholder's membership interests in Torch LLC shall be
converted, pursuant to the Contribution Agreement, into shares
of Common Stock;
(ix) except as previously disclosed to the
Underwriters in writing, neither such Selling Stockholder nor
any of its affiliates directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is
under common control with, or has any other association with
(within the meaning of Article I, Section (ee) of the By-laws
of the NASD), any member firm of the NASD;
(x) except as described in the Registration Statement
and Prospectus, there are no private or governmental actions,
suits, claims, investigations or proceedings pending or, to
the knowledge of such Selling Stockholder, threatened to which
such Selling Stockholder or any of its respective officers is
a party or of which any of its properties is subject at law or
in equity, or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency which could reasonably be expected to
prevent consummation of the transactions contemplated hereby
in the manner contemplated hereby, including the offer and
sale of the Additional Shares to be sold by such Selling
Stockholder at any Additional Time of Purchase; and
(xi) any certificate signed by or on behalf of such
Selling Stockholder and delivered to you or to counsel for the
Underwriters in connection with the offering of the Additional
Shares to be sold by such Selling Stockholder shall be deemed
to be a representation and warranty by such Selling
Stockholder, as to the matters covered thereby, to each
Underwriter.
4. Certain Covenants of the Company and the Selling
Stockholders.
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(a) The Company hereby agrees:
(i) to furnish such information as may be required
and to otherwise cooperate in qualifying the Shares for
offering and sale under the securities or blue sky laws of
such states as you may designate and to maintain such
qualifications in effect so long as required for the
distribution of the Shares; provided that the Company shall
not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such
state (except service of process with respect to the offering
and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(ii) to make available to the Underwriters in New
York City, as soon as practicable after the Registration
Statement becomes effective, and thereafter from time to time
to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if
the Company shall have made any amendments or supplements
thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required
to deliver a prospectus within the nine-month period referred
to in Section 10(a)(3) of the Act in connection with the sale
of the Shares, the Company will prepare promptly upon request,
but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectuses
as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act;
(iii) to advise you promptly and (if requested by
you) to confirm such advice in writing, (A) when any
post-effective amendment to the Registration Statement becomes
effective and (B) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(iv) to advise you promptly, confirming such advice
in writing, of any request by the Commission for amendments or
supplements to the Registration Statement or Prospectus or for
additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of, a stop order
suspending the effectiveness of the Registration Statement
and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or
Prospectus and to file no such amendment or supplement to
which you shall object in writing;
(v) to file promptly all reports and any definitive
proxy or information statement required to be filed by the
Company with the Commission in order to comply with the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the
"Exchange Act") subsequent to the date of the Prospectus and
for so long as the delivery of a
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prospectus is required in connection with the offering or sale
of the Shares, and to promptly notify you of such filing;
(vi) if necessary or appropriate, to file a
registration statement pursuant to Rule 462(b) under the Act;
(vii) to advise the Underwriters promptly of the
happening of any event known to the Company within the time
during which a Prospectus relating to the Shares is required
to be delivered under the Act which, in the judgment of the
Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in
the light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at
the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be
necessary to reflect any such change and to furnish you a copy
of such proposed amendment or supplement before filing any
such amendment or supplement with the Commission;
(viii) to make generally available to its security
holders, and to deliver to you, an earnings statement of the
Company (which will satisfy the provisions of Section 11(a) of
the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined
in Rule 158(c) of the Act) as soon as is reasonably
practicable after the termination of such twelve-month period;
(ix) to furnish to you 4 conformed copies of the
Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all
exhibits thereto) and sufficient additional copies of the
foregoing (other than exhibits) for distribution of a copy to
each of the other Underwriters;
(x) to furnish to you as soon as practicable prior to
the Time of Purchase and any Additional Time of Purchase, as
the case may be, but not later than two Business Days prior
thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of Torch LLC or the
Company and the Subsidiaries, as applicable, which have been
read by the Company's independent certified public
accountants, as stated in their letter to be furnished
pursuant to Section 7(c) hereof;
(xi) to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of
Proceeds" in the Prospectus;
(xii) to furnish to you, before filing with the
Commission subsequent to the effective date of the
Registration Statement and during the period referred to in
subparagraph (v) above, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(xiii) for a period of 180 days after the date
hereof, without the prior written consent of UBSW, not to (A)
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or
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indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or
permit the registration under the Act of any shares of Common
Stock, or (B) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described
in clause (A) or (B) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise;
provided, however, that the foregoing restrictions shall not
apply to (1) the issuance, sale and delivery of the Shares to
the Underwriters pursuant to this Agreement, (2) the issuance,
sale and delivery of the Contribution Shares pursuant to the
Contribution Agreement and (3) any shares of Common Stock
issued or options to purchase Common Stock or other Common
Stock-based awards granted pursuant to existing employee
benefit plans referred to in the Registration Statement and
the Prospectus;
(xiv) to use its best efforts to cause the Common
Stock to continue to be listed for quotation on the Nasdaq
National Market;
(xv) to use its best efforts to comply with and
perform each of its covenants and agreements contained in the
Contribution Agreement; and
(xvi) to deliver (A) to American Stock Transfer &
Trust Co., as Custodian under that series of Custody
Agreements dated as of the date hereof by and among Xxxxxxx X.
Xxxxxxxxx and Xxxx X. Xxxxx, as Attorneys-in-Fact, American
Stock Transfer & Trust Co., as Custodian, and each Selling
Stockholder, immediately upon the closing of the Contribution,
certificates representing (1) ________ shares of Common Stock
registered in the name of Torch, (2) ________ shares of Common
Stock registered in the name of Riverside and (3) ________
shares of Common Stock registered in the name of Lime Rock, in
each case representing a portion of the shares of Common Stock
issuable to such parties in connection with the closing of the
Contribution and together constituting the maximum number of
Additional Shares that may be sold by the Selling Stockholders
hereunder and (B) to each of Torch, Riverside and Lime Rock
certificates representing the balance of the shares of Common
Stock issuable to such persons in connection with the closing
of the Contribution.
(b) Each of the Selling Stockholders hereby severally agrees:
(i) not to take, directly or indirectly, any action
which is designed to or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(ii) for a period of 180 days after the date hereof,
without the prior written consent of UBSW, not to (A) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock
or securities convertible into or exercisable or exchangeable
for Common Stock or warrants or other rights to purchase
Common Stock, whether now owned or hereafter acquired by such
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Selling Stockholder or with respect to which such Selling
Stockholder has or hereafter acquires the power of
disposition, or file, or request or demand that the Company
file, any registration statement under the Act with respect to
any of the foregoing within such period or (B) enter into any
swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (A) or (B) above is to
be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided, however, that the
foregoing shall not apply to the Additional Shares to be sold
by such Selling Stockholder hereunder;
(iii) to use its best efforts to comply with and
perform each of its covenants and agreements contained in the
Contribution Agreement.
5. Payment of Expenses. The Company agrees with each
Underwriter to pay all costs, expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as set
forth under Section 6 hereof and in (iii), (iv) and (vi) below) in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares, (iii) the producing, word
processing and/or printing of this Agreement, any Agreement Among Underwriters,
any dealer agreements, the Custody Agreement, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other disbursements of
counsel for the Underwriters) and the printing and furnishing of copies of any
blue sky surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or qualification of the
Shares for quotation on the Nasdaq National Market and any registration thereof
under the Exchange Act, (vi) any filing for review of the public offering of the
Shares by the NASD, (vii) the sale of the Additional Shares to be sold by the
Selling Stockholders to the Underwriters contemplated hereby and (viii) the
performance of the Company's and the Selling Stockholders' other obligations
hereunder;
6. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to (i) clause (z) of Section 8 hereof, (ii) the last paragraph of
Section 9 hereof or (iii) the default by one or more of the Underwriters in its
or their respective obligations hereunder, the Company or Torch LLC shall, in
addition to paying the amounts described in Section 5 hereof, reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
7. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to (i) the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the Time of Purchase (and the several
obligations of the Underwriters at each Additional Time of Purchase are subject
to the accuracy of the representations and warranties on the part of the Company
and the Selling Stockholders on the date hereof and at the Time of Purchase
(unless previously waived) and at each Additional Time of Purchase, as the case
may be), (ii) the performance by
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the Company and the Selling Stockholders of their obligations hereunder and
(iii) the following additional conditions precedent:
(a) The Company shall furnish to you at the Time of Purchase
and at each Additional Time of Purchase, as the case may be, the
opinions of Xxxxx Xxxxx L.L.P. and Xxxxx and Xxxxx L.L.P., counsel for
the Company, addressed to the Underwriters, and dated the Time of
Purchase or the applicable Additional Time of Purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in
form satisfactory to Xxxxxx & Xxxxxx L.L.P., counsel for the
Underwriters, to the effect set forth in Exhibit A-1 and Exhibit A-2,
respectively, hereto and to such further effect as counsel to the
Underwriters may reasonably request;
(b) Torch shall furnish to you at each Additional Time of
Purchase the opinion of Xxxxx and Xxxxx L.L.P., counsel for Torch, and
Riverside and Lime Rock shall furnish to you at each Additional Time of
Purchase the opinion of Xxxxxx & Xxxxxx L.L.P., counsel for Riverside
and Lime Rock, in each case addressed to the Underwriters and dated the
applicable Additional Time of Purchase, with reproduced copies for each
of the other Underwriters and in form satisfactory to Xxxxxx & Xxxxxx
L.L.P., counsel for the Underwriters, to the effect set forth in
Exhibit A-3 hereto and to such further effect as counsel to the
Underwriters may reasonably request;
(c) You shall have received from Xxxxxx Xxxxxxxx LLP, letters
dated, respectively, the date of this Agreement and the Time of
Purchase and each Additional Time of Purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by UBSW on behalf of the
Underwriters;
(d) You shall have received at the Time of Purchase and at
each Additional Time of Purchase, as the case may be, the favorable
opinion of Xxxxxx & Xxxxxx L.L.P., dated the Time of Purchase or the
applicable Additional Time of Purchase, as the case may be, in form and
substance reasonably satisfactory to you;
(e) No amendment or supplement to the Registration Statement
or Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which you shall reasonably object in
writing;
(f) The Registration Statement shall become effective at or
before 5:00 P.M., New York City time, on the date of this Agreement,
unless a later time (but not later than 5:00 P.M., New York City time,
on the second full Business Day after the date of this Agreement) shall
be agreed to by the Company and you in writing or by telephone,
confirmed in writing; provided, however, that the Company and you and
any group of Underwriters, including you, who have agreed hereunder to
purchase in the aggregate at least 50% of the Firm Shares may from time
to time agree on a later date; and, if Rule 430A under the Act is used,
the Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the time period prescribed by the Act;
(g) Prior to the Time of Purchase or each Additional Time of
Purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
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modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading;
(h) Between the time of execution of this Agreement and the
Time of Purchase or each Additional Time of Purchase, as the case may
be, (i) there shall have been no Material Adverse Effect and (ii) no
transaction which is material and unfavorable to the Company shall have
been entered into by the Company, Torch or any of the Subsidiaries;
(i) Each of the Company and the Selling Stockholders will, at
the Time of Purchase or each Additional Time of Purchase, as the case
may be, as to itself and not as to the others, deliver to you a
certificate of two of its executive officers (in the case of the
Company) or of an Attorney-in-Fact on behalf of the Selling
Stockholders (in the case of the Selling Stockholders) to the effect
that (A) the representations and warranties of the Company or such
Selling Stockholder, as the case may be, as set forth in this Agreement
are true and correct as of each such date, (B) the Company or such
Selling Stockholder, as the case may be, has performed such of its
obligations under this Agreement as are to be performed at or before
the Time of Purchase and at or before each Additional Time of Purchase,
as the case may be, and (C) solely in the case of the Company, the
conditions set forth in paragraphs (g) and (h) of this Section 7 have
been met;
(j) You shall have received signed letters, dated the date of
this Agreement, from each of the directors and executive officers of
the Company and Torch LLC to the effect that such persons shall not,
for a period of 180 days after the date hereof, without the prior
written consent of UBSW, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase
Common Stock, whether now owned or hereafter acquired by such person or
with respect to which such person now has or hereafter acquires the
power of disposition, or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of Common
Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, except (x) as a bona fide gift or
gifts to members of the immediate family of such person or (y) to any
trust for the direct or indirect benefit of such person or immediate
family member, provided that, prior to such transfer and as a condition
thereof, the transferee shall deliver to UBSW a written agreement to be
bound by the restrictions set forth herein until the expiration of the
aforementioned 180 day period;
(k) The Company and the Selling Stockholders shall have
furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration
Statement and the Prospectus as of the Time of Xxxxxxxx
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and each Additional Time of Purchase, as the case may be, as you may
reasonably request;
(l) The Shares shall have been approved for listing for
quotation on Nasdaq National Market, subject only to notice of issuance
at or prior to the Time of Purchase or each Additional Time of
Purchase, as the case may be;
(m) The transactions contemplated by the Contribution
Agreement shall have been consummated without waiver or modification,
except as may be approved by UBSW.
8. Effective Date of Agreement; Termination. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (y) since the time of execution of
this Agreement or the respective dates as of which information is given in the
Registration Statement and Prospectus, there has been any material adverse and
unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and the Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (z) at any time prior to the Time of
Purchase or, with respect to the purchase of any Additional Shares, the
applicable Additional Time of Purchase, as the case may be, trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or limitations or minimum
prices shall have been established on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market, or if a banking moratorium shall
have been declared either by the United States or New York State authorities, or
if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on the financial markets of the United States
as, in your judgment or in the judgment of such group of Underwriters, to make
it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 8, the Company, the Selling Stockholders
and each other Underwriter shall be promptly notified.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company or the Selling Stockholders, as the case may be, shall be unable to
comply with any of the terms of this Agreement, none of the Company, the Selling
Stockholders, the Subsidiaries or Torch shall be under any obligation or
liability under this Agreement (except to the extent provided in Sections 5, 6
and 10 hereof), and the Underwriters shall be under no obligation or liability
to the Company, the Selling Stockholders, the Subsidiaries or Torch under this
Agreement (except to the extent provided in Section 10 hereof) or to one another
hereunder.
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9. Increase in Underwriters' Commitments. Subject to Sections
7 and 8, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares or the Additional Shares, as the case may be, to be
purchased by it hereunder (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 hereof) and if
the number of Firm Shares or Additional Shares, as the case may be, which all
Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed 10% of the total number of Firm Shares or Additional Shares, as
the case may be, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate number of Firm Shares or Additional Shares, as the
case may be, they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Shares or Additional Shares, as the case may be, agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the Time of Purchase for a period not exceeding five Business Days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 9 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
five Business Days for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company or the Selling Stockholders to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company or the Selling Stockholders. Nothing in this paragraph, and no action
taken hereunder, shall relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
10. Default by the Company. If the Company shall fail at the
Time of Purchase to sell the number of Shares that it is then obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Section
3, 5, 6 and 11 shall remain in full force and effect.
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11. Indemnity and Contribution.
(a) The Company, Torch LLC and Torch (together, the "Torch
Indemnitors") jointly and severally agree to indemnify, defend and hold
harmless each of the Underwriters, Riverside and Lime Rock and their
respective partners, directors and officers, and any person who
controls any of the Underwriters, Riverside and Lime Rock within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which any of the Underwriters,
Riverside or Lime Rock or any such person may incur under the Act, the
Exchange Act, common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 11 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the
statements made therein not misleading in light of the circumstances in
which they were made, except (A) insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use with
reference to such Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading in light of the
circumstance in which they were made or (B) with respect to any
Preliminary Prospectus to the extent that any such loss, damage,
expense, liability or claim would not have been incurred, but for the
fact that such Underwriter, in contravention of a requirement of
applicable law, sold Shares to a person to whom such Underwriter failed
to send or give, at or prior to the written confirmation of the sale of
such Shares (the "Confirmation"), a copy of the Prospectus, as then
amended or supplemented if the Company has previously furnished copies
thereof (sufficiently in advance of the Confirmation and in sufficient
quantity to allow for distribution by the Confirmation) and the loss,
liability, claim, damage or expense of such Underwriter resulted from
an untrue statement or omission of a material fact contained in or
omitted from the Preliminary Prospectus that was corrected in the
Prospectus as, if applicable, amended or supplemented prior to the
Confirmation and it is finally judicially determined that such
Prospectus was required by law to be delivered at or prior to the
Confirmation; or (ii) any untrue statement or alleged untrue statement
made in Section 3(a) of this Agreement or the failure by any of the
Torch Indemnitors to perform when and as required any agreement or
covenant contained herein; or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information
furnished by or on behalf of the Company including, without limitation,
slides, videos, films or tape recordings used in connection with the
marketing of the Shares; or (iv) the Directed Share Program, provided
that the Torch Indemnitors shall not be responsible for any loss,
damage, expense, liability, or claim that is finally judicially
determined to have resulted from the bad faith or gross negligence of
the Underwriters in conducting the Directed Share Program.
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If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Torch Indemnitors or the
Selling Stockholders (together, the "Indemnitors") pursuant to the
foregoing paragraph, such Underwriter or such person shall promptly
notify the Indemnitors in writing of the institution of such
Proceeding, and the Indemnitors shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses;
provided, however, that the failure to so notify the Indemnitors shall
not relieve the Indemnitors from any liability which the Indemnitors
may have to any Underwriter or any such person or otherwise unless the
Indemnitors are materially and irrevocably prejudiced in their defense
by reason of such delay. Such Underwriter or such person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the Indemnitors in connection
with the defense of such Proceeding or the Indemnitors shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Indemnitors
(in which case the Indemnitors shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne
by the Indemnitors and paid as incurred (it being understood, however,
that the Indemnitors shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). The Indemnitors shall not be liable for any settlement of
any Proceeding effected without their written consent but if settled
with the written consent of the Indemnitors, the Indemnitors agree to
indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered
into more than 60 Business Days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice
of its intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) In connection with the offer and sale of the Reserved
Shares, the Company agrees to purchase from UBSW, at its request, for
full purchase price all Reserved Shares which were subject to a
properly confirmed agreement to purchase
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and for which any Directed Share Participant failed to pay therefor and
accept delivery thereof.
(c) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, the Selling Stockholders and any
person who controls the Company or a Selling Stockholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which the Company, the Selling
Stockholders or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information ("Underwriter Information")
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading. Each of the
Company and the Selling Stockholders acknowledge and agree that the
only information defined as "Underwriter Information" in this Agreement
shall be the statements set forth in the fourth paragraph, the last two
sentences of the fifth paragraph, and the eighth, ninth and tenth
paragraphs under the caption "Underwriting" in the Prospectus.
If any Proceeding is brought against the Company, a Selling
Stockholder or any such person in respect of which indemnity may be
sought against any Underwriter pursuant to the foregoing paragraph, the
Company, the Selling Stockholder or such person shall promptly notify
such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the
failure to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the
Company, such Selling Stockholder or any such person or otherwise
unless the Underwriters are materially and irrevocably prejudiced in
their defense by reason of such delay. The Company, such Selling
Stockholder or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Company, such Selling Stockholder or
such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from or
additional to or in conflict with those available to such Underwriter
(in which case such Underwriter shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or
parties, but such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at
the expense of such Underwriter), in any of which events such fees and
expenses shall be borne by such Underwriter and paid as incurred (it
being understood, however, that such Underwriter shall not be liable
for the expenses of more than one separate counsel (in
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addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter
shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the
written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company, such Selling Stockholder and
any such person from and against any loss or liability by reason of
such settlement. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested such Underwriter to reimburse
the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then such Underwriter agrees
that it shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered into more
than 60 Business Days after receipt by such Underwriter of the
aforesaid request, (ii) such Underwriter shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given such
Underwriter at least 30 days' prior notice of its intention to settle.
No Underwriter shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such Proceeding and does not include and
admission of fault, culpability or failure to act, by or on behalf of
such indemnified party.
(d) Riverside and Lime Rock jointly and severally agree to
indemnify, defend and hold harmless the Company, its directors, each of
its officers who signed the Registration Statement, the Selling
Stockholders and any person who controls the Company or a Selling
Stockholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation) which the
Company or any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information ("Lime Rock Information") furnished
in writing by or on behalf of Riverside or Lime Rock to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading; or (ii) any untrue statement or alleged untrue statement
made in Section 3(b) of this Agreement with respect to Riverside or
Lime Rock or the failure by Riverside or Lime Rock to perform when and
as required any agreement or covenant contained herein; provided,
however, that the aggregate liability of Riverside and Lime Rock under
this Section 11 shall be limited to an amount equal to the net proceeds
(after deducting the underwriting discount, but before deducting
expenses) received by Riverside and Lime Rock from the sale of Shares
pursuant to this Agreement. Each of the Company, Riverside and Lime
Rock acknowledge and agree that the only information defined as "Lime
Rock Information" in this Agreement shall be the statements set forth
in the third sentence of the first paragraph under the caption
"Prospectus summary - Our Business - Structure and ownership" and in
footnotes 4
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and 11 to the table set forth under the caption "Principal and selling
stockholders" in the Prospectus.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against Riverside or
Lime Rock pursuant to the foregoing paragraph, the Company or such
person shall promptly notify Riverside and Lime Rock in writing of the
institution of such Proceeding and Riverside and Lime Rock shall assume
the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the failure to so notify
Riverside and Lime Rock shall not relieve Riverside and Lime Rock from
any liability which they may have to the Company or any such person or
otherwise unless Riverside and Lime Rock are materially and irrevocably
prejudiced in their defense by reason of such delay. The Company or
such person shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense
of the Company or such person unless the employment of such counsel
shall have been authorized in writing by Riverside and Lime Rock in
connection with the defense of such Proceeding or Riverside and Lime
Rock shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to or in conflict with those available to
Riverside and Lime Rock (in which case Riverside and Lime Rock shall
not have the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties, but Riverside and Lime Rock may
employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of Riverside and Lime
Rock), in any of which events such fees and expenses shall be borne by
Riverside and Lime Rock and paid as incurred (it being understood,
however, that Riverside and Lime Rock shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties
to such Proceeding). Riverside and Lime Rock shall not be liable for
any settlement of any such Proceeding effected without their written
consent but if settled with their written consent, Riverside and Lime
Rock agree to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested Riverside and Lime Rock to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then Riverside
and Lime Rock agree that they shall be liable for any settlement of any
Proceeding effected without their written consent if (i) such
settlement is entered into more than 60 Business Days after receipt by
Riverside and Lime Rock of the aforesaid request, (ii) Riverside and
Lime Rock shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and (iii) such
indemnified party shall have given Riverside and Lime Rock at least 30
days' prior notice of its intention to settle. Riverside and Lime Rock
shall not, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include and admission of fault,
culpability or failure to act, by or on behalf of such indemnified
party.
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(e) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a), (b), (c) or
(d) of this Section 11 in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Stockholders and the total
underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company and the Selling Stockholders on the one hand and
of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company, by the Selling Stockholders or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to above in this
subsection. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by
such Underwriter and distributed to the public exceeds the amount of
any damage which such Underwriter has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
12. Survival. The agreements, covenants, warranties and
representations of the Company and the Selling Stockholders contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, its partners, directors
29
31
or officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers, the Selling Stockholders, or any person who controls the
Company or any Selling Stockholder within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company, the Selling
Stockholders and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
13. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department with a copy to Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxx
0000, Xxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx; if to the Company or Torch,
shall be sufficient in all respects if delivered or sent to the Company or Torch
at the offices of the Company at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX
00000, Attention: Xxxxxxx X. Xxxxxxxxx, with a copy to Xxxxx Xxxxx L.L.P., 000
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, Attention: R. Xxxx Xxxxxxx; and if to Riverside
or Lime Rock, shall be sufficient in all respects if delivered or sent to
Riverside or Lime Rock at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxx XX, 0xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxx Xxxxxxxx, with a copy to Xxxxxx &
Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxxx
X. Xxxxx.
14. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company, Torch, Torch LLC and the Selling Stockholders consent to the
jurisdiction of such courts and personal service with respect thereto. The
Company, Torch, Torch LLC and the Selling Stockholders hereby consent to
personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party
against UBSW or any indemnified party. Each of UBSW and the Company, Torch,
Torch LLC and the Selling Stockholders (on their behalf and, to the extent
permitted by applicable law, on behalf of their stockholders, members and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company, Torch, Torch LLC and the
Selling Stockholders agree that a final judgment in any such action, proceeding
or counterclaim brought in any such court shall be conclusive and binding upon
them and may be enforced in any other court in the jurisdiction of which they
are or may be subject, by suit upon such judgment.
16. Parties at Interest. This Agreement has been and is made
solely for the benefit of the parties hereto and to the extent provided in
Section 11 hereof the controlling
30
32
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, limited liability company,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
17. Counterparts. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
18. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their successors and assigns and any successor or
assign of any substantial portion of their respective businesses and/or assets.
19. Miscellaneous.
(a) UBSW, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBSW is a separately incorporated
entity, it is solely responsible for its own contractual obligations
and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by
UBSW are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
(b) A lending affiliate of UBSW may have lending relationships
with issuers of securities underwritten or privately placed by UBSW. To
the extent required under the securities laws, prospectuses and other
disclosure documents for securities underwritten or privately placed by
UBSW will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBSW.
31
33
If the foregoing correctly sets forth the understanding among the
Company, Torch, Torch LLC, the Selling Stockholders and the Underwriters, please
so indicate in the space provided below for the purpose, whereupon this letter
and your acceptance shall constitute a binding agreement among the Company,
Torch, Torch LLC, the Selling Stockholders and the Underwriters, severally.
Very truly yours,
TORCH OFFSHORE, INC.
By:
---------------------------------------------
Name:
Title:
TORCH OFFSHORE L.L.C.
By:
---------------------------------------------
Name:
Title:
TORCH, INC.
By:
---------------------------------------------
Name:
Title:
SELLING STOCKHOLDERS
By:
---------------------------------------------
Name:
As Attorney-in-Fact acting on behalf of the
Selling Stockholders named in Schedule B
hereto.
32
34
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS WARBURG LLC
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
33
35
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS Warburg LLC.....................................................................
CIBC World Markets..................................................................
Xxxxxx Xxxx, a division of Xxxx Xxxxx Xxxx Xxxxxx, Inc..............................
------------
Total............................... 5,000,000
============
36
SCHEDULE B
Maximum Number of
Selling Stockholder Additional Shares
------------------- -----------------
Torch, Inc..........................................................................
Riverside Investments, LLC..........................................................
Friends of Lime Rock LP.............................................................
Total............................... 375,000
=================
37
EXHIBIT A-1
FORM OF OPINION OF XXXXX XXXXX L.L.P.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of
Delaware.
(ii) The Company has all requisite corporate and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement and the Contribution Agreement.
(iii) The authorized, issued and outstanding capital stock of the
Company is, assuming no Additional Shares are issued or sold, as set forth under
the heading "Pro forma for the Contribution and the offering" in the section of
the Prospectus entitled "Capitalization" (except for subsequent issuances, if
any, pursuant to employee benefit plans referred to in the Prospectus or
pursuant to the exercise of options referred to in the Prospectus). The shares
of issued and outstanding capital stock of the Company, including (i) the shares
of Common Stock issued pursuant to the Contribution Agreement and (ii) any
Additional Shares to be purchased by the Underwriters from the Selling
Stockholders, have been duly authorized and validly issued and are fully paid
and non-assessable; and none of such shares of capital stock of the Company was
issued in violation of statutory preemptive rights or, to such counsel's
knowledge, contractual preemptive rights or other similar rights of any
securityholder of the Company that have not been waived. It is not necessary in
connection with the offer, sale and delivery of the shares of Common Stock
pursuant to the Contribution Agreement to register such offer or sale under the
0000 Xxx.
(iv) The Shares to be purchased by the Underwriters from the
Company have been duly authorized by the Company for issuance and sale to the
Underwriters pursuant to the Underwriting Agreement and, when issued and
delivered by the Company pursuant to the Underwriting Agreement against payment
of the consideration set forth in the Underwriting Agreement, will be validly
issued and fully paid and non-assessable and no holder of the Shares is or will
be subject to personal liability solely by reason of being such a holder.
(v) The issuance and sale of the Shares to be sold by the Company
and the sale of the Shares to be sold by the Selling Stockholders is not subject
to statutory preemptive rights or, to such counsel's knowledge, contractual
preemptive rights or other similar rights of any security holder of the Company.
(vi) The Underwriting Agreement and the Contribution Agreement have
been duly authorized, executed and delivered by the Company and Torch LLC.
(vii) The Contribution Agreement is a legal, valid and binding
agreement of each of the Company and Torch LLC, enforceable against it in
accordance with its terms, except that enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally, and by
general principles of equity, regardless of whether that enforceability is
considered in a proceeding in equity or at law and except that such counsel need
express no opinion with respect to the enforceability of indemnification or
contribution provisions therein.
38
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
Act and no proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus and each amendment or supplement to the
Registration Statement and the Prospectus as of their respective effective or
issue dates (other than the financial statements and supporting schedules
(including the auditors' reports on the financial statements and the notes to
the financial statements) and other financial data included therein or omitted
therefrom, as to which such counsel need express no opinion) appeared on their
face to comply as to form in all material respects with the requirements of the
Act.
(x) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(xi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements and
with any applicable requirements of the charter and bylaws of the Company.
(xii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which any of the Company Torch
LLC or any of the U.S. Subsidiaries is a party or to which any of their
respective property is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described.
(xiii) The information in the Prospectus under "Management's
discussion and analysis of financial condition and results of operations -
Liquidity and capital resources," "Business - Government and environmental
regulation," "Management - 2001 Incentive Plan," "Management - 401(k) Plan,"
"Management - Employment agreements," "Certain relationship and related party
transactions - The Contribution," "Description of capital stock," "Shares
eligible for future sale," and "Material United States federal tax consequences
to Non-United States holders of common stock" and in the Registration Statement
under Item 14, to the extent that it constitutes matters of law, legal
conclusions or summaries of legal matters, the Company's charter or bylaws or
contracts and agreements (including the Contribution Agreement) to which any of
the Company, Torch or the Subsidiaries is a party, has been reviewed by such
counsel and is correct in all material respects.
(xiv) To such counsel's knowledge, there are no contracts or other
agreements required to be described or referred to in the Registration Statement
or to be filed as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency of the United States or of the States of Delaware, Texas or
New York (other than (1) under the Act, which have been obtained, or (2) as may
be required under the securities or blue sky laws of the various states in
connection with the offering made by the Prospectus, as to which such counsel
need express
39
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Underwriting Agreement or the Contribution
Agreement by the Company and Torch LLC, for the consummation of the transactions
contemplated by the Contribution Agreement to be consummated on or prior to the
date of the opinion or for the offering, issuance, sale or delivery of the
Shares.
(xvi) The execution, delivery and performance of the Underwriting
Agreement and the Contribution Agreement and the consummation of the
transactions contemplated in the Underwriting Agreement, the Contribution
Agreement or the Registration Statement (including the issuance and sale of the
Shares and the use of the proceeds from the sale of the Shares as described in
the Prospectus under the caption "Use of Proceeds") and compliance by each of
the Company and Torch LLC with its obligations under the Underwriting Agreement
and the Contribution Agreement, as applicable, have been duly authorized by all
necessary corporate or limited liability company action and proceedings by such
parties, and do not and will not, whether with or without the giving of notice
or lapse of time or both, conflict with or constitute a breach of, or default
under or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the Company, Torch, Torch LLC or any of
their subsidiaries pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument filed
as an exhibit to the Registration Statement (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter, bylaws or other organizational instrument of any of the Company
or Torch LLC or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to such counsel, excluding any securities or blue sky laws
and the rules and regulations of the NASD, of any Governmental Authority having
jurisdiction over any of the Company or Torch LLC or any of their properties,
assets or operations. For purposes of this paragraph, the term "Governmental
Authority" means any Delaware, New York or United States federal executive,
legislative, judicial, administrative or regulatory body.
(xvii) To such counsel's knowledge, except as disclosed in the
Prospectus under the caption "Certain transactions and related party
transactions - The Contribution," there are no persons with registration rights
or other similar rights to have any securities of the Company registered
pursuant to the Registration Statement or otherwise registered by the Company
under the Act.
(xviii) To such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of the capital stock of the Company or any such options, rights,
convertible securities or obligations.
(xix) Neither the Company nor Torch LLC is an "investment company"
or an entity "controlled" by an "investment company," as such terms are defined
in the 1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto (except for financial
statements and schedules (including the auditors' reports on the financial
statements and the notes to the financial statements) and other financial data
included therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to
40
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto (except for financial
statements and schedules (including the auditors' reports on the financial
statements and the notes to the financial statements) and other financial data
included therein or omitted therefrom, as to which we need make no statement),
at the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Time of Purchase, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
41
EXHIBIT A-2
FORM OF OPINION OF XXXXX AND XXXXX L.L.P.
(i) Each of Torch and Torch LLC has been duly incorporated or
formed and is validly existing as a corporation or limited liability company in
good standing under the laws of the jurisdiction of its incorporation or
formation.
(ii) Each of Torch and Torch LLC has all requisite corporate or
limited liability company power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Underwriting Agreement and the
Contribution Agreement.
(iii) The Underwriting Agreement and the Contribution Agreement have
been duly authorized, executed and delivered by Torch.
(iv) The Contribution Agreement is a legal, valid and binding
agreement of Torch, enforceable against it in accordance with its terms, except
that enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally, and by general principles of equity,
regardless of whether that enforceability is considered in a proceeding in
equity or at law and except that such counsel need express no opinion with
respect to the enforceability of indemnification or contribution provisions
therein.
(v) Each of the Company, Torch and Torch LLC is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction set forth on Annex A to such opinion.
(vi) Each U.S. subsidiary of each of the Company, Torch and Torch
LLC set forth on Annex B to such opinion (individually, a "U.S. Subsidiary" and,
collectively, the "U.S. Subsidiaries") has been duly incorporated or formed and
is validly existing as a corporation or other entity in good standing under the
laws of the jurisdiction of its incorporation or formation, has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction set forth on Annex C to such opinion; except as otherwise disclosed
in the Registration Statement (a) all of the issued and outstanding capital
stock or other equity interests of each such U.S. Subsidiary and of Torch LLC
has been duly authorized and validly issued and is fully paid and non-assessable
and (b) to such counsel's knowledge, all of the issued and outstanding capital
stock or other equity interests of each U.S. Subsidiary and of Torch LLC is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim, except as
described in the Prospectus. None of the outstanding shares of capital stock or
other equity interests of any such U.S. Subsidiary or of Torch LLC was issued in
violation of the statutory preemptive rights or, to such counsel's knowledge,
contractual preemptive rights or similar rights of any securityholder of such
U.S. Subsidiary or Torch LLC.
(vii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency of the United States or
42
of the States of Louisiana, Delaware or New York (other than (1) under the Act,
which have been obtained, or (2) as may be required under the securities or blue
sky laws of the various states in connection with the offering made by the
Prospectus, as to which such counsel need express no opinion) is necessary or
required in connection with the due authorization, execution and delivery of the
Underwriting Agreement or the Contribution Agreement by Torch, for the
consummation of the transactions contemplated by the Contribution Agreement to
be consummated on or prior to the date of the opinion or for the offering,
issuance, sale or delivery of the Shares.
(viii) The execution, delivery and performance of the Underwriting
Agreement and the Contribution Agreement and the consummation of the
transactions contemplated in the Underwriting Agreement, the Contribution
Agreement or the Registration Statement (including the issuance and sale of the
Shares and the use of the proceeds from the sale of the Shares as described in
the Prospectus under the caption "Use of Proceeds") and compliance by Torch with
its obligations under the Underwriting Agreement and the Contribution Agreement,
as applicable, have been duly authorized by all necessary corporate action and
proceedings by Torch, and do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of Torch pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument filed as an exhibit to the Registration Statement
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter, bylaws or other
organizational instrument of any of Torch or any of the U.S. Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to such counsel, excluding any securities or blue sky laws and the rules
and regulations of the NASD, of any Governmental Authority having jurisdiction
over any of Torch or any of the U.S. Subsidiaries or any of its properties,
assets or operations. For purposes of this paragraph, the term "Governmental
Authority" means any Delaware, Louisiana, New York or United States federal
executive, legislative, judicial, administrative or regulatory body.
(ix) To such counsel's knowledge, except for the Subsidiaries,
Torch and Torch LLC do not own, directly or indirectly, any shares of capital
stock or any other equity interest in any corporation, limited liability
company, partnership, joint venture or other entity.
(x) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which any of the Company,
Torch, Torch LLC or any of the U.S. Subsidiaries is a party or to which any of
their respective property is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described.
(xi) To such counsel's knowledge, there are no contracts or other
agreements required to be described or referred to in the Registration Statement
or to be filed as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto.
(xii) To such counsel's knowledge, except as disclosed in the
Prospectus under the caption "Certain transactions and related party
transactions - The Contribution," there are no persons with registration rights
or other similar rights to have any securities of the Company registered
pursuant to the Registration Statement or otherwise registered by the Company
under the Act.
43
(xiii) To such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of the capital stock or other equity interests of the Subsidiaries or any
such options, rights, convertible securities or obligations.
(xiv) Torch is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto (except for financial
statements and schedules (including the auditors' reports on the financial
statements and the notes to the financial statements) and other financial data
included therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules (including the auditors' reports
on the financial statements and the notes to the financial statements) and other
financial data included therein or omitted therefrom, as to which we need make
no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the time of purchase,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
44
EXHIBIT A-3
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS
(i) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than as may be necessary under
United States or state securities laws, as to which we need express no opinion)
is necessary or required to be obtained by the Selling Stockholder for the
performance by the Selling Stockholder of its obligations under the Underwriting
Agreement, or in the Custody Agreement, or in connection with the offer, sale or
delivery of the Shares to be sold by such Selling Stockholder.
(ii) The Custody Agreement has been duly authorized, executed and
delivered by the Selling Stockholder named therein and constitutes the legal,
valid and binding agreement of such Selling Stockholder. The Underwriting
Agreement has been duly authorized, executed and delivered by or on behalf of
the Selling Stockholder.
(iii) Each Attorney-in-Fact has been duly and irrevocably authorized
by the Selling Stockholder to deliver the Shares on behalf of such Selling
Stockholder in accordance with the terms of the Underwriting Agreement.
(iv) The execution, delivery and performance of the Underwriting
Agreement and the Custody Agreement and the sale and delivery of the Shares to
be sold by such Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated in the Underwriting Agreement and
in the Registration Statement and compliance by such Selling Stockholder with
its obligations under the Underwriting Agreement and the Custody Agreement have
been duly authorized by all necessary action on the part of such Selling
Stockholder and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Shares or any property or assets of such Selling
Stockholder pursuant to any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, license, lease or other instrument or agreement to
which such Selling Stockholder is a party or by which it may be bound, or to
which any of the property or assets of such Selling Stockholder may be subject
(but only to the extent that any such conflict, breach, default, tax, lien,
charge or encumbrance adversely affects the ability of such Selling Stockholder
to deliver good and marketable title to the Shares to be sold by the Selling
Stockholder thereunder), nor will such action result in any violation of the
provisions of the charter or bylaws (or other organizational documents) of the
Selling Stockholder, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over such Selling Stockholder or any of its
properties.
(v) Assuming the Underwriters purchase the Shares to be sold by
such Selling Stockholder in good faith and without "notice of an adverse claim"
(as that phrase is used in Section 8-105 of the Uniform Commercial Code as in
effect in the State of Delaware on the date hereof (the "Delaware UCC")), upon
(i) delivery to the Underwriters of the certificates representing such Shares
endorsed in blank by an effective endorsement, and (ii) payment therefor in
accordance with the terms of the Underwriting Agreement, the Underwriters will
become "protected purchasers" (as defined in Section 8-303(a) of the Delaware
UCC) of the Shares to be sold by such Selling Stockholder, free and clear of
"adverse claims" (as defined in
45
Section 8-102 of the Delaware UCC), except for any such adverse claims created
by or at the behest of the Underwriters.
Such opinion shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
