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Exhibit 1.2
DRAFT 2/10/97
LOMAK PETROLEUM, INC.
$100,000,000
____________% SENIOR SUBORDINATED NOTES DUE 2007
UNDERWRITING AGREEMENT
----------------------
___________ ___, 1997
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
BEAR, XXXXXXX & CO., INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/o Chase Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Lomak Petroleum, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $100,000,000 principal amount of its __% Senior
Subordinated Notes due 2007 (the "Notes"). The Notes are to be issued pursuant
to an Indenture dated as of ________ __, 1997 (the "Indenture") to be entered
into between the Company and ______________, as trustee (the "Trustee"), the
form of which has been filed as an exhibit to the Registration Statement (as
defined below). The Notes will be jointly, severally and unconditionally
guaranteed (the "Guarantees" and, together with the Notes, the "Securities") on
a senior subordinated basis by each Restricted Subsidiary of the Company (as
defined in the Indenture) and any future Restricted Subsidiary of the Company
(the "Subsidiary Guarantors"). It is understood by all parties that the Company
is concurrently entering into an agreement, dated the date hereof (the "Common
Stock Underwriting Agreement") providing for the sale by the Company of an
aggregate of 4,000,000 shares (plus up to 600,000 shares to cover
over-allotments, if any) of the Company's Common Stock to certain underwriters
for whom Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxx Xxxxxx Incorporated, Xxxxx
Xxxxxx Inc., X.X. Xxxxxxx & Sons, Inc. and XxXxxxxx & Company Securities, Inc.
are acting as representatives. This is to confirm the agreement concerning the
purchase of the Securities from the Company by the several Underwriters named in
Schedule 1 hereto (the "Underwriters").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
represents and warrants to and agrees with the several Underwriters on and as of
the date hereof and the Closing Date (as defined in Section 3) that:
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(a) A registration statement on Form S-3 (No. 333- ),
including a form of prospectus, relating to the Securities has been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") and has been filed by the
Company with the Commission. The Company may have filed one or more
amendments thereto, including the related preliminary prospectus, each
of which has previously been furnished to you. The Company will next
file with the Commission either (i) prior to effectiveness of such
registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (ii) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). In the case of clause
(ii), the Company has included (or incorporated by reference) in such
registration statement, as amended at the Effective Time (as defined
below), all information (other than information permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A ("Rule 430A Information")) required by the Securities Act and
the rules thereunder to be included in the final prospectus with
respect to the Securities and the offering thereof. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other such
required information, with respect to the Securities and the offering
thereof and, except to the extent the Underwriters shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the execution of this Agreement or, to
the extent not completed at such time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the execution of this Agreement, will be included or made therein. For
purposes of this Agreement, "Effective Time" means the date and time as
of which such registration statement, or the most recent post-effective
amendment thereto, if any, was or is declared effective by the
Commission, and "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before it
becomes effective under the Securities Act, any prospectus filed with
the Commission by the Company pursuant to Rule 424(a) and the
prospectus included in the Registration Statement at the Effective Time
that omits Rule 430A Information. Such registration statement, as
amended at the Effective Time, including all Rule 430A Information, if
any, and any documents incorporated by reference therein at such time
is hereinafter referred to as the "Registration Statement", and the
form of prospectus relating to the Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) or, if no
such filing is required, as included in the Registration Statement is
hereinafter referred to as the "Prospectus". Reference made herein to
any Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the
date of such Preliminary Prospectus or the Prospectus, as the case may
be, and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any document filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any annual report of the Company
filed with the Commission pursuant to Section 13(a) or 15(d) of the
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Exchange Act after the Effective Time that is incorporated by reference
in the Registration Statement.
(b) At the Effective Time, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Securities Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
respective rules thereunder; at the Effective Time, the Registration
Statement did not or will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; at the Effective Time and on the Closing Date, the
Indenture did or will conform in all material respects with the
applicable requirements of the Trust Indenture Act and the rules
thereunder; and, at the Effective Time, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to (i) that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification
(Form T-1) of the Trustee under the Trust Indenture Act or (ii)
information contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use therein (the
"Underwriters' Information"). The parties acknowledge and agree that
the Underwriters' Information consists solely of the statements
relating to the Underwriters contained in the second, third and fifth
paragraphs under the caption "Underwriting" in the Prospectus.
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and none of such documents
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in the Prospectus, when such
documents are filed with Commission will conform in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Company and the transactions contemplated
by this Agreement meet the requirements for use of Form S-3 under the
Act.
(d) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the issuance of the Securities or suspends the
sale of the Securities in any jurisdiction; no injunction, restraining
order or order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of its
subsidiaries which would prevent or suspend the issuance or sale of the
Securities or the use of the Preliminary Prospectus or the Prospectus
in any jurisdiction; no action, suit or proceeding is pending
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against or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or
foreign, which could reasonably be expected to interfere with or
adversely affect the issuance of the Securities or in any manner draw
into question the validity or enforceability of this Agreement, the
Indenture or any other related agreement or any action taken or to be
taken pursuant thereto; and the Company has complied with any and all
requests by any securities authority in any jurisdiction for additional
information to be included in the Preliminary Prospectus and the
Prospectus.
(e) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations or limited
partnerships in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and
are in good standing as foreign corporations or limited partnerships in
each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority would not have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect").
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus. All the outstanding shares of capital
stock or partnership interests, as the case may be, of each subsidiary
of the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
Registration Statement, are owned by the Company directly or indirectly
through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party.
(g) The execution, delivery and performance of this Agreement,
the Indenture, the Notes and the agreement (the "Cometra Acquisition
Agreement"), dated December 31, 1996, between the Company and American
Cometra, Inc. ("Cometra") by the Company and the Guarantees by each of
the Subsidiary Guarantors, the issuance, authentication, sale and
delivery of the Securities and compliance by the Company with the terms
thereof and the consummation of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter, partnership agreement, by-laws or
other organizational documents of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the
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registration of the Securities under the Securities Act, the
qualification of the Indenture under the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities
laws in connection with the purchase and distribution of the Securities
by the Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency
or body is required for the execution, delivery and performance of this
Agreement, the Indenture and the Notes by the Company and the
Guarantees by the Subsidiary Guarantors, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company with
the terms thereof, and the consummation of the transactions
contemplated hereby and thereby.
(h) The oil and gas reserve estimates of the Company and its
subsidiaries contained in the Registration Statement and the Prospectus
have been prepared primarily by independent petroleum consultants
listed in the Prospectus in accordance with the Commission guidelines
applied on a consistent basis throughout the periods involved, and
neither of the Company nor any of its subsidiaries has any reason to
believe that such estimates do not fairly reflect the oil and gas
reserves of the Company and its subsidiaries at the dates indicated.
(i) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations and which have not been so described or filed.
(j) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which, singularly or in the aggregate, if determined adversely
to the Company or any of its subsidiaries, are reasonably likely to
have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(k) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter, partnership agreement, by-laws or other
organizational documents, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) is in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its properties or assets may be subject.
(l) The Company and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate state,
federal or foreign regulatory agencies or bodies which are necessary or
desirable for the ownership of their respective properties or the
conduct of their respective businesses as described in the Prospectus,
except where the failure to possess or make the same would not have,
singularly or in the aggregate, a Material Adverse Effect, and the
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Company has not received notification of any revocation or modification
of any such license, authorization or permit and has no reason to
believe that any such license, certificate, authorization or permit
will not be renewed in the ordinary course.
(m) The Company has full right, power and authority to execute
and deliver this Agreement, the Indenture and the Notes and to perform
its obligations hereunder and thereunder; and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of this Agreement, the Indenture and the Notes and the
consummation of the transactions contemplated thereby have been duly
and validly taken.
(n) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company.
(o) Each Subsidiary Guarantor has full right, power and
authority to execute and deliver the Indenture and the Guarantees and
to perform its obligations thereunder; and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of the Indenture and the Guarantees and the consummation
by each Subsidiary Guarantor of the transactions contemplated by the
Indenture and the Guarantees have been duly and validly taken.
(p) The Indenture has been duly authorized by the Company and
each Subsidiary Guarantor and, when duly executed by the proper
officers of the Company and each Subsidiary Guarantor and delivered by
the Company and each Subsidiary Guarantor, will constitute a valid and
binding agreement of the Company and each Subsidiary Guarantor
enforceable against the Company and each Subsidiary Guarantor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, and by
general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law); and the Notes have
been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture, will
be duly and validly issued and outstanding and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and each Guarantee has been duly
authorized by each Subsidiary Guarantor and, when duly executed,
authenticated, issued and delivered as provided in the Indenture, will
be duly and validly issued and outstanding and will constitute valid
and binding obligations of each Subsidiary Guarantor entitled to the
benefits of the Indenture and enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Indenture and the Securities
conform to the descriptions thereof contained in the Prospectus.
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(q) There are no persons with registration or other similar
rights either to have any securities registered pursuant to the
Registration Statement or to have any securities otherwise registered
by the Company under the Securities Act in connection with or as a
result of the execution, delivery and performance of this Agreement;
except as described in the Prospectus, there are no outstanding
subscriptions, rights, warrants, calls or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the
Company or any of its subsidiaries..
(r) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
or any of its subsidiaries have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
(s) Neither the Company nor any of its subsidiaries is (i) an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and the rules and
regulations of the Commission thereunder or (ii) a "holding company" or
a "subsidiary company" of a holding company or an "affiliate" thereof
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(t) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(u) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses and have no
reason to believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of
conflict with, any such rights of others.
(v) The Company and each of its Subsidiaries have (i) good and
defensible title to all its interests in its oil and gas properties,
title investigations having been carried out by or on behalf of the
Company or its subsidiaries in accordance with good practice in the oil
and gas industry in the areas in which they operate; and (ii) good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real or personal property which are
material to the business of the Company and its subsidiaries taken as a
whole, in each
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case free and clear of all liens, encumbrances, claims and defects
except such as (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries or (ii) could not reasonably be expected to have a
Material Adverse Effect.
(w) No labor disturbance by or dispute with the employees of
the Company or any of its subsidiaries exists or, to the best knowledge
of the Company, is contemplated or threatened.
(x) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of
any kind of toxic or other wastes or other hazardous substances,
including, but not limited to, brine, crude oil, natural gas liquids
and other petroleum materials, by, due to, or caused by the Company or
any of its subsidiaries (or, to the best of the Company's knowledge,
any other entity for whose acts or omissions the Company or any of its
subsidiaries is or may be liable) upon any of the property now or
previously owned or leased by the Company or any of its subsidiaries,
or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which
would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise
to any liability, except for any violation or liability which would not
have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal,
discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the Company
or any of its subsidiaries have knowledge, except for any such
disposal, discharge, emission, or other release of any kind which would
not have, singularly or in the aggregate with all such discharges and
other releases, a Material Adverse Effect.
(y) As of the date hereof, (1) all royalties, rentals,
deposits and other amounts due on the oil and gas properties of the
Company and its subsidiaries have been properly and timely paid, and no
proceeds form the sale or production attributable to the oil and gas
properties of the Company and its subsidiaries are currently being held
in suspense by any purchaser thereof, except where such amounts due
could not, singly or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), business, prospects or
results of operation of the Company and its subsidiaries taken as a
whole and (2) there are no claims under take-or-pay contracts pursuant
to which natural gas purchasers have any make-up rights affecting the
interest of the Company and its subsidiaries in its oil and gas
properties, except where such claims could not, singly or in the
aggregate, have a Material Adverse Effect;
(z) As of date hereof, the aggregate undiscounted monetary
liability of the Company and its subsidiaries for petroleum taken or
received under any operating or gas balancing and storage agreement
relating to its oil and gas properties that permits any person to
receive any portion of the interest of the Company and its subsidiaries
in any petroleum or to receive cash or other payments to balance any
disproportionate allocations of petroleum could not, singly or in the
aggregate, have a Material Adverse Effect;
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(aa) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan
which could have a Material Adverse Effect; each employee benefit plan
is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company has not incurred and does not
expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any "pension plan"; and each
"pension plan" (as defined in ERISA) for which the Company would have
any liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could cause the
loss of such qualification.
(bb) Xxxxxx Xxxxxxxx LLP, Xxxxx & Xxxxx LLP, Coopers & Xxxxxxx
L.L.P. and KPMG Peat Marwick LLP, are each independent certified public
accountants with respect to the Company and its subsidiaries as
required by the Act and the Rules and Regulations. The financial
statements (including the related notes and supporting schedules)
contained or incorporated by reference in the Prospectus comply in all
material respects with the requirements under the Securities Act and
the Exchange Act (except that certain supporting schedules are
omitted); such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the
respective dates indicated and the results of their operations and
their cash flows for the respective periods indicated; and the
financial information contained in the Prospectus under the headings "
Prospectus Summary--Summary Historical and Pro Forma Financial Data",
"Capitalization", "Selected Consolidated Financial Data" "Management's
Discussion and Analysis of Results of Operations and Financial
Condition" and "Executive Compensation" are derived from the accounting
records of the Company and its subsidiaries and fairly present the
information purported to be shown thereby. The pro forma financial
statements and other pro forma financial information and data contained
in the Prospectus: (i) present fairly in all material respects the
information shown therein, (ii) have been prepared in accordance with,
and contain all material adjustments to the historical financial
statements required by, the Commission's rules and guidelines with
respect to pro forma financial statements, (iii) have been properly
compiled on the basis described therein, and (iv) the assumptions used
in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. The other historical financial and
statistical information and data included in the Prospectus are, in all
material respects, fairly presented.
(cc) The Company and each of its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, which insurance is in amounts
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and insures against such losses and risks as are adequate to protect
the Company and its subsidiaries and their respective businesses.
Neither the Company nor any of its subsidiaries has received notice
from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to
continue such insurance.
(dd) The Company has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in the stabilization or manipulation of the price of
the Securities and the Company has not distributed and will not
distribute any offering material in connection with the offering and
sale of the Securities other than any preliminary prospectus filed with
the Commission or the Prospectus or other materials, if any, permitted
by the Act or the Rules or Regulations; the Company has not taken and
will not take, directly or indirectly, any action prohibited by Rule
10b-6 under the Exchange Act in connection with the offering of the
Securities.
(ee) Since the date as of which information is given in the
Prospectus, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business,
(ii) the Company has not incurred any material liability or obligation,
direct or contingent, other than in the ordinary course of business,
(iii) the Company has not entered into any material transaction other
than in the ordinary course of business and (iv) there has not been any
change in the capital stock or long-term debt of the Company, or any
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(ff) Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(gg) On and immediately after the Closing Date, the Company
(after giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Prospectus) will be
Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the
Company is not less than the total amount required to pay the probable
liabilities of the Company on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured,
(ii) the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent
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obligations and commitments as they mature and become due in the normal
course of business, (iii) assuming the sale of the Securities as
contemplated by this Agreement and the Prospectus, the Company is not
incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which the Company is engaged. In computing the amount
of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(hh) Neither the Company nor any of its subsidiaries owns any
"margin securities" as that term is defined in Regulations G and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and none of the proceeds of the sale of the Securities
will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(ii) Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder's fee or like payment
in connection with the offering and sale of the Securities.
(jj) No forward looking statement within the meaning to
Section 27A of the Securities Act and Section 21E of the Exchange Act
contained in the Registration Statement has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
2. PURCHASE BY THE UNDERWRITERS. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company,
the principal amount of Notes together with the related Guarantees set forth
opposite the name of such Underwriter in Schedule 1 hereto at a purchase price
equal to _____% of the principal amount thereof plus accrued interest, if any,
from _______ __, 1997 to the Closing Date (as hereinafter defined).
The Company shall not be obligated to deliver any of the
Securities except upon payment for all the Securities to be purchased as
provided herein.
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3. DELIVERY OF AND PAYMENT FOR THE SECURITIES. Delivery of and
payment for the Securities shall be made at the office of Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other place as
shall be agreed upon by the Underwriters and the Company, at 10:00 A.M., New
York City time, on ________ __, 1997, or at such other date or time, not later
than seven full business days thereafter, as shall be agreed upon by the
Underwriters and the Company (such date and time being referred to herein as the
"Closing Date"). On the Closing Date, the Company shall deliver or cause to be
delivered to the Underwriters certificates for the Securities in global
registered form against payment to or upon the order of the Company of the
purchase price by certified or official bank check or checks drawn in New York
Clearing House funds or similar next-day funds. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Securities shall be in definitive fully registered form, in such
denominations and registered in such names as the Underwriters shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company shall make the certificates for the Securities available for
inspection by the Underwriters in New York, New York, not later than one full
business day prior to the Closing Date.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with
each of the several Underwriters:
(a) That, if the Effective Time is prior to the execution and
delivery of this Agreement, to file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable
and if consented to by the Underwriters, subparagraph (4)) of Rule
424(b) within the time period prescribed by such rule and will provide
evidence satisfactory to the Underwriters of such timely filing; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a Prospectus is required in connection with the offering
and sale of the Securities;
(b) To advise the Underwriters promptly of any proposal to
amend or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and not to
effect such amendment or supplementation without the consent of the
Underwriters; to advise the Underwriters promptly of the receipt of any
comments from the Commission and of the effectiveness of the
Registration Statement (in each case if the Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of the Registration Statement or the
Prospectus, or of any request by the Commission therefor, and of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; to advise the Underwriters promptly of
any order preventing or suspending the use of any prospectus relating
to the Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction and of the
initiation or threatening of any proceeding for any such purpose; and
to use best
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efforts to prevent the issuance of any stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification and, if any such stop
order or order or suspension is issued, to obtain the lifting thereof
at the earliest possible time;
(c) To furnish promptly to each of the Underwriters and
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith; and to deliver promptly without charge to the
Underwriters such number of the following documents as the Underwriters
may from time to time reasonably request: (i) conformed copies of the
Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement, the Indenture, the Guarantees, the computation of the ratio
of earnings to fixed charges and the computation of per share
earnings), (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and (iii) any document incorporated
by reference in the Prospectus (excluding exhibits thereto);
(d) If the delivery of a prospectus is required at any time in
connection with the sale of the Securities and if at such time any
events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or if for
any other reason it shall be necessary or advisable at such time to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply with the Securities Act or the Exchange Act or with a request
from the Commission, to notify the Underwriters immediately thereof,
and to promptly prepare and file with the Commission an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(e) As soon as practicable to make generally available to the
Company's security holders and to deliver to the Underwriters an
earning statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(f) For so long as the Securities are outstanding, to furnish
to the Underwriters copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the
Securities pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
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(g) For a period of 180 days from the date of the Prospectus,
to not offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or
announce any offering of, any debt securities of the Company (other
than the Securities) without the prior written consent of the
Underwriters.
(h) Not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(i) In connection with the offering of the Securities, until
the Underwriters shall have notified the Company of the completion of
the distribution of the Securities, not to, and to cause its affiliated
purchasers (as defined in Rule 10b-6 under the Exchange Act) not to,
either alone or with one or more other persons, bid for or purchase,
for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(j) In connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Underwriters;
(k) To furnish to each of the Underwriters on the date hereof
a copy of the independent accountants' reports included in the
Prospectus signed by the accountants rendering such report;
(l) To do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
(m) To not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture;
(n) To not take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant to
Section 4(d);
(o) Prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the
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Underwriters are notified), without the prior written consent of the
Underwriters, unless in the judgment of the Company and its counsel,
and after notification to the Underwriters, such press release or
communication is required by law; and
(p) To apply the net proceeds from the sale of the Securities
as set forth in the Prospectus under the heading "Use of Proceeds".
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Registration Statement shall have
become effective and the Indenture shall have been qualified under the
Trust Indenture Act, and the Representative shall have received notice
thereof, not later than (i) 6:00 p.m. New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or
(ii) 12:00 noon New York City time on the business day following the
day on which the offering price was determined if such determination
occurred after 3:00 p.m. New York City time on such date. If the
Effective Time is prior to the execution and delivery of this
Agreement, the Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a) of this Agreement. Prior to
the Closing Date, no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) The Prospectus (and any amendments or supplements thereto)
shall have been printed and copies distributed to the Underwriters as
promptly as practicable on or following the date of this Agreement or
at such other date and time as to which the Underwriters may agree.
(c) None of the Underwriters shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
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(d) All corporate or partnership proceedings and other legal
matters incident to the authorization, form and validity of this
Agreement, the Notes, the Guarantees, the Indenture, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished and shall have
caused its subsidiaries to have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass
upon such matters.
(e) Xxxxxx & Xxxxxx L.L.P. shall have furnished to the
Underwriters their written opinion, as counsel to the Company and its
subsidiaries, addressed to the Underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Underwriters,
substantially to the effect set forth in Annex A hereto.
(f) The Representative shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Underwriters may reasonably require, and the Company and its
subsidiaries shall have furnished to such counsel such documents as
they request for enabling them to pass upon such matters.
(g) The Company shall have furnished to the Underwriters a
letter from Xxxxxx Xxxxxxxx LLP, dated the date of delivery thereof
(which, if the Effective Time is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement or,
if the Effective Time is subsequent to the execution and delivery of
this Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the Registration Statement to be filed
shortly prior to the Effective Time), in form and substance
satisfactory to the Underwriters, substantially to the effect set forth
in Annex B hereto.
(h) The Company shall have furnished to the Underwriters a
letter from Coopers & Xxxxxxx L.L.P., dated the date of delivery
thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the
amendment or post-effective amendment to the Registration Statement to
be filed shortly prior to the Effective Time), in form and substance
satisfactory to the Underwriters, substantially to the effect set forth
in Annex C hereto.
(i) The Company shall have furnished to the Underwriters a
letter from each of Ernst & Young LLP and KPMG Peat Marwick LLP, dated
the date of delivery thereof (which, if the Effective Time is prior to
the execution and delivery of this Agreement, shall be on or prior to
the date of this Agreement or, if the Effective Time is subsequent to
the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the Registration
Statement to be filed shortly
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prior to the Effective Time), in form and substance satisfactory to the
Underwriters, substantially to the effect set forth in Annex D hereto.
(j) The Company shall have furnished to the Underwriters a
letter (the "bring-down letter") from each of Xxxxxx Xxxxxxxx LLP,
Ernst & Young LLP, Coopers & Xxxxxxx L.L.P. and KPMG Peat Marwick LLP,
addressed to the Underwriters and dated the Closing Date confirming, as
of the date of such bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of
a date not more than three days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by such firms letter
delivered to the Underwriters concurrently with the execution of this
Agreement and described in paragraph (g), (h) or (i) as the case may be
(each, an "initial letter"). In addition, if the Effective Time is
prior to the execution and delivery of this Agreement, Xxxxxx Xxxxxxxx
LLP and Coopers & Xxxxxxx L.L.P. shall confirm in their bring-down
letters that they have performed the procedures specified in clause
(iii) of Annex B and Annex C, respectively, with respect to certain
amounts, percentages and financial information specified by the
Underwriters and deemed to be a part of the Registration Statement
pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in
clause (iii) of Annex B and Annex C, respectively.
(k) The Company shall have furnished to the Underwriters a
letter from each of Netherlands, Xxxxxx and Associates , Inc., Xxxxxx &
Co., Inc., X.X. Xxxx and Associates, Inc., Xxxxxxxxxx & Co., Inc. and
Clay, Xxxx & Xxxxxxx (the "Independent Petroleum Engineers") dated the
date of delivery thereof (which, if the Effective Time is prior to the
execution and delivery of this Agreement, shall be on or prior to the
date of this Agreement or, if the Effective Time is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing
of the amendment or post-effective amendment to the Registration
Statement to be filed shortly prior to the Effective Time), in form and
substance satisfactory to the Underwriters, confirming that they are
independent petroleum consultants with respect to the Company and its
subsidiaries, attaching their report with respect to the Company's and
its subsidiaries oil and gas reserves and stating that as of the date
of such letter they have no reason to believe that the conclusions and
findings of such firm contained in such report are not true or correct.
(l) The Company shall have furnished to the Underwriters a
letter (the "bring-down letter") from each of Independent Petroleum
Engineers, addressed to the Underwriters and dated the Closing Date
confirming, as of the date of the bring-down letter, the conclusions
and findings of such firm with respect to the information and other
matters covered by their letter delivered to the Underwriters
concurrently with the execution of this Agreement and described in
paragraph (k) and confirming in all material respects the conclusions
and findings set forth in such prior letter.
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(m) The Company shall have furnished to the Underwriters a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that (A) such officers have carefully examined the Registration
Statement and the Prospectus, (B) in their opinion, as of the Effective
Time, the Registration Statement and the Prospectus did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and since the Effective Time, no
event has occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus pursuant to
Section 4(d) hereof and (C) to the best of his or her knowledge after
reasonable investigation, as of the Closing Date, the representations
and warranties of the Company in this Agreement are true and correct,
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the best of his or her
knowledge, are contemplated by the Commission, and subsequent to the
date of the most recent financial statements included or incorporated
by reference in the Prospectus, there has been no material adverse
change in the financial position or results of operation of the Company
and its subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, except as set forth in the
Prospectus.
(n) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, the Notes shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee and
the Guarantees shall have been duly executed and delivered by each of
the Subsidiary Guarantors.
(o) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Prospectus, such amendment or supplement shall have been prepared, the
Underwriters shall have been given a reasonable opportunity to comment
thereon, and copies thereof shall have been delivered to the
Underwriters reasonably in advance of the Closing Date.
(p) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(q) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto), there shall not have
been any change in the capital stock or long-term debt of the Company
or any of
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its subsidiaries or any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, the effect of which, in any such
case described above, is, in the judgment of the Underwriters, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on
the terms and in the manner contemplated in the Prospectus (exclusive
of any supplement).
(r) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its
rating of the Securities or any of the Company's other debt securities.
(s) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on either of
such exchanges or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having
jurisdiction, or trading in securities of the Company on any exchange
or in the over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
Federal or New York State authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv),
is, in the judgment of the several Underwriters, so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the sale and delivery of the Securities on the terms
and in the manner contemplated by this Agreement and the Prospectus.
(t) The closing under the Common Stock Underwriting Agreement
shall have occurred concurrently with the closing hereunder.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
6. TERMINATION. This Agreement shall become effective upon the
later of (i) when the Underwriters and the Company shall have received
notification of the effectiveness of the Registration Statement or (ii) the
execution of this Agreement. The obligations of the Underwriters hereunder may
be terminated by the Underwriters, in their absolute discretion, by
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notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Sections
5(p), 5(q), 5(r), or 5(s) shall have occurred.
7. DEFAULTING UNDERWRITERS. (a) If, on the Closing Date, any
Underwriter or Underwriters defaults in the performance of its or their
obligations under this Agreement, the remaining non-defaulting Underwriters may
make arrangements for the purchase of such Securities by other persons
satisfactory to the Company and the non-defaulting Underwriters, but if no such
arrangements are made by the Closing Date, then each remaining non-defaulting
Underwriter shall be severally obligated to purchase the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase on the
Closing Date in the respective proportions which the principal amount of Notes
set forth opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the aggregate principal amount of Notes set forth
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Securities on the Closing Date if
the aggregate principal amount of Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds one-eleventh of
the aggregate principal amount of the Notes to be purchased on the Closing Date,
and any remaining non-defaulting Underwriter shall not be obligated to purchase
in total more than 110% of the principal amount of the Notes which it agreed to
purchase on the Closing Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded and the remaining Underwriters or other
underwriters satisfactory to the remaining Underwriters and the Company do not
elect to purchase the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 8 and 12 and except that the provisions of
Sections 9 and 10 shall not terminate and shall remain in effect. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto who, pursuant to this Section 7, purchases Securities which a
defaulting Underwriter agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have for damages caused by its default. If
other underwriters are obligated or agree to purchase the Securities of a
defaulting Underwriter, either the remaining Underwriters or the Company may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectus that
effects any such changes.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) no notice
shall have been given pursuant to Section 6 causing this Agreement to become
effective, (b) the Company shall fail to tender the Securities for delivery to
the Underwriters for any reason permitted under this Agreement or (c) the
Underwriters shall decline to purchase the Securities for any reason
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permitted under this Agreement, the Company shall reimburse the Underwriters for
the fees and expenses of their counsel and for such other out-of-pocket expenses
as shall have been reasonably incurred by them in connection with this Agreement
and the proposed purchase of the Securities, and upon demand the Company shall
pay the full amount thereof to the Underwriters. If this Agreement is terminated
pursuant to Section 7 by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
9. INDEMNIFICATION. (a) The Company shall indemnify and hold
harmless each Underwriter, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act or the Exchange Act
(collectively referred to for the purposes of this Section 9 and Section 10 as
the Underwriter) from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which that Underwriter may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Underwriter promptly upon demand
for any legal or other expenses reasonably incurred by that Underwriter in
connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any such document in reliance upon and in conformity with any Underwriters'
Information.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for the purposes of this Section 9 and
Section 10 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement
22
22
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Underwriters' Information, and shall reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or preparing to defend or defending against or
appearing as third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with
23
23
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), 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.
The obligations of the Company and the Underwriters in this
Section 9 and in Section 10 are in addition to any other liability which the
Company or the Underwriters, as the case may be, may otherwise have, including
in respect of any breaches of representations, warranties and agreements made
herein by any such party.
10. CONTRIBUTION. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities 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 on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Securities purchased under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
24
24
such action or claim. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total underwriting discounts and commissions received by such
Underwriter exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10 are several in proportion to their respective
underwriting obligations and not joint.
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 9 and 10 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the Initial
Purchasers. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. EXPENSES. The Company agrees with the Underwriters to pay
(a) the costs incident to the authorization, issuance, sale, preparation,
printing and delivery of the Notes and the related Guarantees and any stamp
duties and transfer taxes payable in that connection; (b) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
printing and distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), any Preliminary Prospectus, the Prospectus and any
amendment or supplement to the Prospectus, all as provided in this Agreement;
(d) the costs of printing, reproducing and distributing the Indenture, this
Agreement and any other underwriting and selling group documents by mail, telex
or other means of communications; (e) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Notes and the related Guarantees; (f) the fees and expenses
of the Company's counsel and independent accountants; (g) the fees and expenses
of preparing, printing and distributing Blue Sky Memoranda (including related
fees and expenses of counsel to the Underwriters); (h) any fees charged by
securities rating services for rating the Securities; (i) all fees and expenses
of the Trustee and any paying agent (including related fees and expenses of any
counsel to such parties); and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as otherwise provided in this Section 12 and in Section 8, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel.
13. SURVIVAL. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any
25
25
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any person controlling any of them.
14. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Chase Securities Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx,
fax: (000) 000-0000;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxx X. Xxxxxxxxx;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail to such Underwriter at its address set forth
on Schedule 2 hereto. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Company shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Underwriters.
15. DEFINITIONS OF CERTAIN TERMS. For purposes of this
Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding of
the agreement between the Company and the several Underwriters, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
LOMAK PETROLEUM, INC.
By ________________________________
Name:
Title:
Accepted:
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
BEAR, XXXXXXX & CO., INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: Chase Securities Inc.
By ____________________________________
Authorized Signatory
27
SCHEDULE 1
Principal
Amount
Underwriters of Notes
------------ --------
Chase Securities Inc........................................... $
NationsBanc Capital Markets, Inc...............................
Bear, Xxxxxxx & Co., Inc.......................................
Credit Suisse First Boston Corporation.........................
------------
Total.......................................................... $100,000,000
============
28
Schedule 2
ADDRESSES FOR NOTICES
Chase Securities Inc.
Xxx Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
NationsBanc Capital Markets, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Attention:
Bear, Xxxxxxx & Co., Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Credit Suisse First Boston Corporation
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention:
29
ANNEX A
[Form of Opinion of Counsel for the Company]
Xxxxxx & Xxxxxx shall have furnished to the Initial Purchasers their written
opinion, as counsel to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
substantially to the effect set forth below:
(i) The Company and each of its subsidiaries have
been duly organized and are validly existing as corporations
or limited partnerships in good standing under the laws of
their respective jurisdictions of organization, are duly
qualified to do business and are in good standing as foreign
corporations or limited partnerships in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged (except where the failure
to so qualify or have such power and authority would not have
a Material Adverse Effect);
(ii) The Company has the authorized capitalization
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock or
partnership interests, as the case may be, of each subsidiary
of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iii) The Registration Statement was declared
effective under the Securities Act and the Indenture was
qualified under the Trust Indenture Act as of the date and
time specified in such opinion; the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) of
the Rules and Regulations specified in such opinion on the
date specified therein; and no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the best of such counsel's knowledge, no proceeding
for that purpose is pending or threatened by the Commission;
(iv) The Registration Statement and the Prospectus
and any further amendments or supplements to the Registration
Statement or the Prospectus made by the Company and the
Subsidiary Guarantors prior to the Closing Date (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations;
(v) The documents incorporated by reference in the
Prospectus and the Registration Statement, as of the dates
they were filed with the Commission or
30
2
became effective, as the case may be, comply as to form in all
material respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations thereunder (other than financial statements and
related schedules therein, as to which such counsel need
express no opinion);
(vi) The Indenture complies as to form in all
material respects with the requirements of the Trust Indenture
Act and the rules and regulations of the Commission
thereunder;
(vii) the descriptions in the Offering Memorandum of
statutes, legal and governmental proceedings and contracts and
other documents are accurate in all material respects; and to
the best of such counsel's knowledge, there are no contracts
or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations and
which have not been so described or filed;
(viii) (x) The Company has full right, power and
authority to execute and deliver this Agreement, the Indenture
and the Notes and to perform its obligations hereunder and
thereunder, (y) each Subsidiary Guarantor has the full right,
power and authority to execute and deliver the Guarantees and
to perform its obligations hereunder and thereunder; and all
corporate action required to be taken for the due and proper
authorization, execution and delivery of this Agreement, the
Indenture, the Notes and the Guarantees and the consummation
of the transactions contemplated hereby and thereby have been
duly and validly taken;
(ix) The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
(x) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent
that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(xi) The Notes have been duly authorized and executed
by the Company and, upon the due authentication and delivery
thereof by the Trustee and upon payment and delivery in
accordance with this Agreement, will constitute valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable in accordance with their terms,
except to the extent that such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable
principles (whether considered in a
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3
proceeding in equity or at law); and the Indenture and the
Securities conform to the descriptions thereof contained in
the Prospectus;
(xii) The Guarantees have been duly authorized,
executed and delivered by each Subsidiary Guarantor and
constitutes a valid and binding agreement of the parties
thereto enforceable against the parties thereto in accordance
with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a
proceeding in equity or at law);
(xiii) The execution, delivery and performance of
this Agreement, the Cometra Acquisition Agreement, the
Indenture and the Notes by the Company, the Guarantees by each
of the Subsidiary Guarantors, the issuance, authentication,
sale and delivery of the Securities and compliance by the
Company with the terms thereof and the consummation of the
transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter,
partnership agreements, by-laws or other organizational
documents of the Company or any of its subsidiaries or any
statute or any order, rule or regulation of any court,
arbitrator or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the
Securities under the Securities Act, the qualification of the
Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Securities by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court, arbitrator or governmental
agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution,
delivery and performance of this Agreement, the Indenture, the
Notes and the Guarantees by the Company and the Subsidiary
Guarantors, the issuance, authentication, sale and delivery of
the Securities and compliance by the Company with the terms
thereof and the consummation of the transactions contemplated
hereby and thereby;
(xiv) To the best of such counsel's knowledge and
except as set forth in the Prospectus, there are no pending
actions or suits or judicial, arbitral, rule-making,
administrative or other proceedings to which the Company or
any of its
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subsidiaries is a party or of which any property or assets of
the Company or any of its subsidiaries is subject which (A)
singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect or (B) questions
the validity or enforceability of this Agreement, the
Indenture, the Notes or the Guarantees or any action taken or
to be taken pursuant thereto; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(xv) Neither the Company nor any of its subsidiaries
is an "investment company" within the meaning of the
Investment Company Act and the rules and regulations of the
Commission thereunder, without taking account of any exemption
under the Investment Company Act arising out of the number of
holders of the Company's securities or (B) a "holding company"
or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility
Holding Company Act of 1935, as amended; and
(xvi) neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance,
execution or delivery of the Securities will violate
Regulation G, T, U or X of the Federal Reserve Board;
References to the Prospectus in such counsel's opinion shall
include any supplements thereto at the Closing Date.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and counsel at which conferences the contents of the
Registration Statement and the Prospectus and any amendment and supplement
thereto and related matters were discussed and, although such counsel assumes no
responsibility for the accuracy, completeness or fairness of the Prospectus, any
amendment or supplement thereto (except as expressly provided above), nothing
has come to the attention of such counsel to cause such counsel to believe that
the Registration Statement (or any post-effective amendment thereto), at the
time of its effective date (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A or
Rule 434, if applicable), contained any 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 as of its date and the Closing Date contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or that any document incorporated by reference in
the Prospectus when they were filed with the Commission contained any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (other than the financial statements and other financial
and statistical information contained therein, as to which such counsel need
express no belief) .
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5
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials which are furnished to the Underwriters.
34
ANNEX B
[Form of Initial Comfort Letter of Xxxxxx Xxxxxxxx LLP]
The Company shall have furnished to the Underwriters a letter
from Xxxxxx Xxxxxxxx LLP, dated the date of delivery thereof (which, if the
Effective Time is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time is
subsequent to the execution and delivery of this Agreement, shall be prior to
the filing of the amendment or post-effective amendment to the Registration
Statement to be filed shortly prior to the Effective Time), in form and
substance satisfactory to the Underwriters, substantially to the effect set
forth below:
(i) they are independent public accountants with
respect to the Company and its subsidiaries within the meaning
of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the
Commission;
(ii) in their opinion the consolidated financial
statements and financial statement schedules audited by them
and included or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act, the Exchange Act and the Rules and
Regulations;
(iii) based upon the procedures of the American
Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of
Auditing Standards No. 71 ("SAS No. 71"), reading of the
minutes, inquiries of certain officials of the Company and its
subsidiaries who have responsibility for financial and
accounting matters and certain other limited procedures
requested by the Underwriters and described in detail in such
letter, nothing has come to their attention that causes them
to believe that: (A) any unaudited financial statements
included or incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all
material respects with the accounting requirements; (B) any
material modifications should be made to the unaudited
condensed consolidated financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Registration Statement and the
Prospectus; (C) the unaudited condensed consolidated financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to
form in all material respects with the applicable requirements
of the Securities Act, the Exchange Act and the related
published rules and regulations; (D) at the date of last
available balance sheet, there was any change in the capital
stock, increase in long-term debt, decrease in net current
assets or stockholders' equity as compared with the amounts
shown in the ___________, 199_ unaudited condensed
consolidated balance sheet included in the Registration
Statement and the Prospectus or (E) for
35
2
the period from ________, 199_ to the last date included in
the period covered by the latest available income statement
there were any decreases, as compared with the corresponding
period in the preceding year in net revenues, income from
operations or EBITDA or in total or per share amounts of net
income of the Company and its subsidiaries except, in all
instances for changes, increases or decreases set forth in
such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Underwriters.
(iv) based upon the procedures detailed in such
letter with respect to the period subsequent to the date of
the last available balance sheet, including reading of minutes
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, nothing
has come to their attention that causes them to believe that
(A) at a specified date not more than three business days
prior to the date of such letter, there was any change in
capital stock, increase in long-term debt or decrease in net
current assets or stockholders' equity as compared with the
amounts shown in the __________ ___, 199_ unaudited balance
sheet included in the Prospectus or (B) for the period from
__________ ____, 199_ to a specified date not more than three
business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the
preceding year, in net revenues, income from operations,
EBITDA or in total or per share net income, except in all
instances for changes, increases or decreases that the
Prospectus discloses have occurred or which are set forth in
such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Underwriters;
(v) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus agrees with the accounting
records of the Company and its subsidiaries, excluding any
questions of legal interpretation; and
(vi) on the basis of a reading of the unaudited pro
forma financial statements and information included in the
Registration Statement and the Prospectus; carrying out
certain specified procedures; inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro
forma financial statements and information do not comply in
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements and
information.
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References to the Prospectus in such comfort letter include any supplement
thereto at the date of the letter.
37
ANNEX C
[Form of Initial Comfort Letter of Coopers & Xxxxxxx L.L.P.]
The Company shall have furnished to the Underwriters a letter
from Coopers & Xxxxxxx L.L.P., dated the date of delivery thereof (which, if the
Effective Time is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time is
subsequent to the execution and delivery of this Agreement, shall be prior to
the filing of the amendment or post-effective amendment to the Registration
Statement to be filed shortly prior to the Effective Time), in form and
substance satisfactory to the Underwriters, substantially to the effect set
forth below:
(i) they are independent public accountants
with respect to the Company and its subsidiaries within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the
Commission;
(ii) in their opinion the consolidated
financial statements and financial statement schedules of
America Cometra, Inc. ("Cometra") audited by them and included
in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules and
Regulations;
(iii) based upon the procedures of the American
Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of
Auditing Standards No. 71 ("SAS No. 71"), inquiries of certain
officials of Cometra who have responsibility for financial and
accounting matters and certain other limited procedures
requested by the Underwriters and described in detail in such
letter, nothing has come to their attention that causes them
to believe that: (A) any unaudited Cometra financial
statements included or incorporated by reference in the
Registration Statement and Prospectus do not comply as to form
in all material respects with the accounting requirements; (B)
any material modifications should be made to the unaudited
condensed consolidated Cometra financial statements included
or incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally
accepted accounting principles; (C) the unaudited condensed
consolidated Cometra financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material
respects with the applicable requirements of the Securities
Act and the related published rules and regulations; (D) (1)
at the date of last available balance sheet for Cometra, there
was any increase in long-term debt, decrease in consolidated
net current assets or stockholders' equity as compared with
the amounts shown in the ___________, 199_ unaudited condensed
consolidated balance sheet included in the Registration
Statement or (2) for the period from _________, 199_ to the
last date included in the period covered by the latest
available income statement there were any decreases, as
compared with the corresponding period in the
38
preceding year in net revenues, income from operations, EBITDA
or in total or per share amounts of net income of Cometra
except, in all instances for changes, increases or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by Cometra as to the
significance thereof unless said explanation is not deemed
necessary by the Underwriters.
(iv) based upon the procedures detailed in
such letter with respect to the period subsequent to the date
of the last available balance sheet, including reading of
minutes and inquiries of certain officials of Cometra who have
responsibility for financial and accounting matters, nothing
has come to their attention that causes them to believe that
(A) at a specified date not more than three business days
prior to the date of such letter, there was any increase in
long-term debt or decrease in net current assets as compared
with the amounts shown in the ____________ ____, 199_
unaudited balance sheet included in the Prospectus or (B) for
the period from _____________ _____, 199_ to a specified date
not more than three business days prior to the date of such
letter, there were any decreases, as compared with the
corresponding period in the preceding year, in net revenues,
income from operations, EBITDA or total or per share amounts
of net income, except in all instances for changes, increases
or decreases that the Prospectus discloses have occurred or
which are set forth in such letter, in which case the letter
shall be accompanied by an explanation by Cometra as to the
significance thereof unless said explanation is not deemed
necessary by the Underwriters;
(v) they have performed certain other
specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or
statistical information derived from the general accounting
records of the Company and its subsidiaries) set forth in the
Registration Statement and the Prospectus agrees with the
accounting records of Cometra and its subsidiaries, excluding
any questions of legal interpretation; and
References to the Prospectus in such comfort letter include any supplement
thereto at the date of the letter.
39
ANNEX D
[Form of Initial Comfort Letter of Ernst & Young LLP and KPMG Peat Marwick LLP]
The Company shall have furnished to the Underwriters a letter
from each of Ernst & Young LLP and KPMG Peat Marwick LLP, dated the date of
delivery thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the Registration Statement to be filed shortly prior to the
Effective Time), in form and substance satisfactory to the Underwriters,
substantially to the effect set forth below:
(i) they are independent public accountants with
respect to the Company and its subsidiaries within the meaning
of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the
Commission; and
(ii) in their opinion the consolidated financial
statements and financial statement schedules audited by them
and included or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Rules and Regulations.
References to the Prospectus in such comfort letters include any supplement
thereto at the date of the letter.
