1
EXHIBIT 1.1
XXXXXX DRILLING COMPANY
(A DELAWARE CORPORATION)
10,056,600 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
March 2_, 1997
Xxxxxxxxx & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
As Representatives of
the Several Underwriters
c/o Jefferies & Company, Inc.
Attn: Syndicate Department
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Drilling Company, a Delaware corporation (the "Company") and
Energy Ventures, Inc. (the "Selling Stockholder"), hereby confirm their
agreement with you, as representatives (the "Representatives") of the
underwriters named in Schedule I hereto (the "Underwriters"), with respect to
the issuance and sale by the Company of an aggregate of 7,000,000 shares and the
sale by the Selling Stockholder of 3,056,600 shares (the "Firm Shares") of the
Company's Common Stock, $.16 2/3 par value (collectively, the "Common Stock"),
and the purchase of the Firm Shares by the Underwriters, acting severally and
not jointly. The Company also has agreed to sell up to 1,508,490 shares (the
"Additional Shares") of Common Stock to cover over-allotments, if any. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"Shares".
You have advised us that you desire to purchase the Shares and that you
propose to make a public offering of the Shares as soon as you deem advisable
after the Registration Statement referred to below becomes effective upon the
terms set forth in the Prospectus referred to below.
The terms that follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective and each date after the date hereof on which a
document incorporated by reference in the Registration Statement is filed.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
Section below and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information (as defined
below). "Registration Statement" shall mean the registration statement referred
to in Section below, including incorporated documents, exhibits and financial
statements, as amended at the Representation Date (as defined below) (or, if not
effective at the Representation Date, in the
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form in which it shall become effective) and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as defined in
Section hereof), shall also mean such registration statement as so amended. Such
term shall include Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A (as defined below). If the Company files
an additional registration statement to register additional shares of Common
Stock pursuant to Rule 462(b) (defined below) (the "Additional Registration
Statement"), all references in this Underwriting Agreement to "Registration
Statement" shall mean the Additional Registration Statement, as amended at the
Effective Date, including the contents of the initial registration statement
incorporated by reference therein and including all information (if any) deemed
to be a part of the Additional Registration Statement as of its effective time
pursuant to Rule 430A(b). The prospectus constituting a part of the Registration
Statement (including the Rule 430A Information), as from time to time amended or
supplemented, is hereinafter referred to as the "Prospectus", except that if any
revised prospectus shall be provided to the Underwriters by the Company that
differs from the prospectus on file at the Securities and Exchange Commission
(the "Commission") at the Effective Date (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424 of the Act
Regulations), the term "Prospectus" shall refer to each such revised prospectus
from and after the time it is first provided to the Underwriters for such use.
"Rule 158", "Rule 415", "Rule 424", "Rule 430A", "Rule 462" and "Regulation S-K"
refer to such rules or regulation under the Securities Act of 1933, as amended
(the "Act"; and the rules and regulations under the Act, the "Act Regulations").
"Rule 430A Information" means information with respect to the Shares and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. "Exchange Act" refers to the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder. Any reference herein to the Registration
Statement, a Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriters as of the
date hereof (such date being referred to as the "Representation Date") and as of
the Closing Date, as follows:
(i) the Company meets the requirements for use of Form S-3
under the Act and has filed with the Commission a registration
statement on such Form (Registration No. 333-22987), including a
related preliminary prospectus, and one or more
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amendments thereto, including the related preliminary prospectus, each
of which has previously been furnished to the Underwriters, for the
registration under the Act of the offering and sale of the Shares. The
Company will file with the Commission (A) prior to effectiveness of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus), (B) after
effectiveness of such registration statement, if applicable, an
additional registration statement pursuant to Rule 462(b) or (C) after
effectiveness of such registration statement or such additional
registration statement, a final prospectus in accordance with Rules
430A and 424(b)(1) or (4) or Rule 434 of the Act Regulations. The
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information in
the case of clause (B)) required by the Act and the Act Regulations to
be included in the prospectus with respect to the Shares 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 Shares 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 the
Underwriters prior to the date hereof;
(ii) on the Effective Date, the Representation Date and the
Closing Date, the Registration Statement did and will, and when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
the Prospectus will, comply in all material respects with the
applicable requirements of the Act and the Act Regulations and the
Exchange Act; on the Effective Date, the Representation Date and the
Closing Date, the Registration Statement did not 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 in order to make the
statements therein not misleading; and, on the Effective Date, the
Representation Date and the Closing Date, and on the date of any filing
pursuant to Rule 424(b), the Prospectus did not and will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, that the Company makes no
representation or warranty as to the information provided in writing to
the Company by or on behalf of the Selling Stockholder or the
Underwriters, expressly for use in the Registration Statement or the
Prospectus. The Company agrees that the only information provided in
writing by or on behalf of the Underwriters to the Company, expressly
for use in the Registration Statement or the Prospectus, is that
information contained in the table and the second, fifth and eighth
paragraphs following the table in the section of the Prospectus
entitled "Underwriting" and the last paragraph on the cover page of the
Prospectus;
(iii) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction where
the
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nature or location of its properties (owned or leased) or the conduct
of its business requires such registration or qualification, except
where the failure so to register or qualify would not have a Material
Adverse Effect. As used herein, the term "Material Adverse Effect"
shall mean an adverse effect on the financial condition, business,
properties, net worth or results of operations of the Company or any of
the Subsidiaries (as hereinafter defined) that would be, singly or in
the aggregate, material to the Company and the Subsidiaries, taken as a
whole, whether or not occurring in the ordinary course of business (a
"Material Adverse Effect");
(iv) the only significant subsidiaries (as defined in the Act
Regulations) of the Company are the subsidiaries listed on Schedule II
hereto (collectively, the "Subsidiaries"). Each of the Subsidiaries is
a corporation duly organized and validly existing in good standing
under the laws of its jurisdiction of incorporation with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and in
the Prospectus, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction where the nature
or location of its properties (owned or leased) or the conduct of its
business requires such registration or qualification, except where the
failure so to register or qualify would not have a Material Adverse
Effect;
(v) each of the Company and the Subsidiaries has all necessary
authorizations, approvals, orders, licenses, rights-of-way, operating
rights, easements, certificates and permits of and from, and has made
all declarations and filings with, all regulatory or governmental
officials and bodies, all self-regulatory organizations and all courts
and other tribunals ("Permits"), to own or lease its respective
properties and to conduct its respective businesses described in the
Prospectus and the Registration Statement, except where failure to have
obtained or made the same would not have a Material Adverse Effect, and
neither the Company nor any of the Subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Permits, if the failure to be so licensed or approved or if the subject
of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect; the Company and each of the Subsidiaries has fulfilled
and performed all its current material obligations with respect to such
Permits and no event has occurred that allows, or after notice or lapse
of time, or both, would allow, revocation or termination thereof or
result in any other material impairment of the rights of the holder of
any such Permit except where the nonfulfillment or performance or event
would not have a Material Adverse Effect; and the Company and each of
the Subsidiaries is in compliance with all applicable laws, rules,
regulations, orders and consents, the violation of which would have a
Material Adverse Effect. The property and business of the Company and
the Subsidiaries conform in all material respects to the descriptions
thereof contained in the Prospectus and the Registration Statement;
(vi) all of the Company's authorized and outstanding
capital stock has been duly authorized, validly issued and is fully
paid and nonassessable and the
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capitalization of the Company conforms to the descriptions thereof and
the statements made with respect thereto in the Registration Statement
and the Prospectus as of the date set forth therein. There are no
outstanding securities convertible into or exchangeable for, and no
outstanding options, warrants or other rights to purchase, any shares
of the capital stock of the Company, nor any agreements or commitments
to issue any of the same, except as described in the Registration
Statement and the Prospectus, and there are no preemptive or other
rights to subscribe for or to purchase, and no restrictions upon the
voting or transfer of, any capital stock of the Company pursuant to the
Company's restated certificate of incorporation or by-laws or any
agreement or other instrument to which the Company is a party, except
as described in the Registration Statement and the Prospectus;
(vii) all the outstanding shares of capital stock of each
Subsidiary have been duly authorized and are validly issued, fully paid
and nonassessable and were not issued in violation of or subject to any
preemptive or similar rights. Except as otherwise set forth in the
Registration Statement and the Prospectus, all outstanding shares of
capital stock of the Subsidiaries are owned by the Company, directly or
indirectly through another Subsidiary, free and clear of any security
interests, liens, encumbrances, equities or other claims;
(viii) each of the Company and the Subsidiaries has good and
indefeasible title to all real property and good and marketable title
to all personal property owned by it, including those properties
described in the Registration Statement and Prospectus, in each case
free and clear of all liens, charges, encumbrances and restrictions,
except such as are described in the Registration Statement and
Prospectus or such as would not have a Material Adverse Effect. Each of
the Company and the Subsidiaries has valid, subsisting and enforceable
leases for the properties described in the Registration Statement and
the Prospectus as leased by it, with such exceptions as are described
in the Registration Statement and the Prospectus or that in the
aggregate would not have a Material Adverse Effect;
(ix) the Company has all requisite power, authority,
authorizations, approvals, orders, licenses, certificates and permits
to enter into this Agreement and to carry out the provisions and
conditions hereof, and to issue and deliver the Shares to the
Underwriters as provided herein. This Agreement has been duly
authorized, executed and delivered by the Company;
(x) the Shares to be issued and sold by the Company have been
duly and validly authorized for issuance by the Company, and the
Company has full corporate power and authority to issue, sell and
deliver the Shares; and, when such Shares are issued and delivered
against payment therefor as provided by this Agreement, the Shares will
have been validly issued, fully paid and nonassessable, and the
issuance of such Shares will not be subject to any statutory preemptive
rights or similar statutory rights or any other preemptive or similar
rights. All corporate action required to be
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taken by the Company for the authorization, issuance and sale of the
Shares has been duly and validly taken;
(xi) Coopers & Xxxxxxx L.L.P. are independent accountants
with respect to the Company and the Subsidiaries as required by
the Act;
(xii) the consolidated financial statements and related notes
and schedules included in the Registration Statement or in the
Prospectus present fairly the financial position of the Company and the
Subsidiaries, on the basis stated in the Registration Statement, as of
the respective dates thereof and the consolidated statements of income,
shareholders' equity and cash flows of the Company and the
Subsidiaries, for the respective periods covered thereby; and such
financial statements and the related schedules and notes have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Registration Statement and the
Prospectus. The selected financial information included in the
Registration Statement or the Prospectus presents fairly the
information shown therein and has been compiled on a basis consistent
with that of the audited financial statements of the Company included
therein. The pro forma financial information in the Registration
Statement or in the Prospectus complies in all material respects with
the applicable accounting requirements of Article 11 of Regulation S-X
promulgated by the Commission and presents fairly the information shown
therein; the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein. No other financial
statements or schedules of the Company and the Subsidiaries are
required by the Exchange Act, the Act or the Act Regulations to be
included in the Registration Statement or Prospectus;
(xiii) the Shares conform in all material respects to the
descriptions thereof in the Registration Statement and Prospectus;
(xiv) since the respective dates as of which information is
provided in the Registration Statement and Prospectus, except as
otherwise specifically stated therein, there has been no change or
development with respect to the condition (financial or otherwise) or
business of the Company and the Subsidiaries, taken as a whole, whether
or not arising in the ordinary course of business, that would have a
Material Adverse Effect;
(xv) neither the Company nor any Subsidiary is in violation of
its certificate of incorporation or by-laws or other organizational
documents. Neither the Company nor any Subsidiary is, nor with the
passage of time or the giving of notice or both would be, in violation
of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries, or of
any judgment, order or decree of any court or governmental agency or
body or of any arbitrator having
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jurisdiction over the Company or any of the Subsidiaries, or in default
in the performance or observance of any obligation, agreement, covenant
or condition contained in any mortgage, loan agreement, note, bond,
debenture, credit agreement or any other evidence of indebtedness or in
any agreement, contract, indenture, lease or other instrument to which
the Company or any of the Subsidiaries is a party or by which it may be
bound, or to which any of the property or assets of the Company or any
of the Subsidiaries is subject, the effect of which violation or
default in performance or observance would have a Material Adverse
Effect;
(xvi) there is no action, suit or proceeding pending before or
by any court, arbitrator or governmental agency or body or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries or to which any of their respective property is subject
(A) that is required to be described in the Registration Statement or
the Prospectus but is not described as required or (B) that, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect. There is no agreement, contract, indenture, lease or
other document or instrument that is required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement that is not described or filed as required;
(xvii) except for the Selling Stockholder, no person has any
right to the registration of any security of the Company by reason of
the filing of the Registration Statement with the Commission or the
consummation of the transactions contemplated hereby, which right has
not been waived or lapsed;
(xviii) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940 and is not subject to
registration under such Act;
(xix) as of the date of the Prospectus, neither the Company
nor any of the Subsidiaries currently is planning any probable
acquisitions for which disclosure of pro forma financial information
would be required by the Act;
(xx) except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), since the
respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
except as otherwise stated therein, (A) neither the Company nor any of
the Subsidiaries (1) has issued any securities other than in connection
with the exercise of any outstanding options, (2) incurred any material
liability or obligations, direct or contingent, for borrowed money, (3)
entered into any transaction, not in the ordinary course of business,
that is material to the Company and the Subsidiaries, taken as a whole,
(4) entered into any transaction with an affiliate of the Company (as
the term "affiliate" is defined in Rule 405 of the Act Regulations)
that would otherwise be required to be disclosed in the Prospectus or
the Registration Statement, or (5) declared or paid any dividend on its
capital stock, or made any other distribution to its equity holders,
(B) there has not been any material change in the
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capital stock or other equity, or material increase in the short-term
or long-term debt, of the Company or any of the Subsidiaries and (C)
there has been no change or development with respect to the condition
(financial or otherwise) or business of the Company and the
Subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, that would have a Material Adverse Effect;
(xxi) the Company has not distributed and, prior to the later
to occur of (A) the Closing Date and (B) completion of the distribution
of the Shares, will not distribute without your prior consent any
offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prospectus or other
materials, if any, permitted by the Act;
(xxii) prior to the Closing Date, the Shares will be duly
authorized for listing on the New York Stock Exchange upon official
notice of issuance;
(xxiii) neither the Company nor any Subsidiary is involved in
any labor dispute or, to the knowledge of the Company, is any dispute
threatened, other than disputes that would not have a Material Adverse
Effect;
(xxiv) neither the Company nor any Subsidiary nor, to the best
of its knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds of a character required to
be disclosed in the Prospectus;
(xxv) the Company and each of the Subsidiaries have filed (or
have obtained extensions thereto) all federal, state and local or
foreign tax returns that are required to be filed, which returns are
complete and correct in all material respects, and have paid all taxes
shown on such returns and all assessments with respect thereto to the
extent that the same have become due, except those taxes that are being
contested or protested in good faith by the Company or its Subsidiaries
or which the failure to have would not have a Material Adverse Effect;
(xxvi) except for the shares of capital stock of each of the
Subsidiaries, neither the Company nor any of the Subsidiaries owns any
shares of stock or any other securities of any corporation or has any
equity interest in any firm, partnership, association or other entity
other than as reflected in the consolidated financial statements
included in the Registration Statement and the Prospectus;
(xxvii) neither the execution or delivery of this Agreement,
the offer, issuance, sale or delivery of the Shares nor the
consummation by the Company of the terms of this Agreement (A) requires
the consent, approval, authorization or order of any court or
governmental agency or body, except such as have been obtained under
the Act and such as may be required under the state securities or blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters or
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such as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") and such other approvals as have been
obtained, (B) will conflict with, result in a breach of, or constitute
a default under the terms of any indenture, agreement, lease or other
instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or any of their respective properties may be
bound, or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to
which any of them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is subject, (C) will
conflict with or violate any law, order, statute, regulation, consent
or memorandum of understanding applicable to the Company or any
Subsidiary of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company or
any of the Subsidiaries (in the case of (B) or (C) above, where such
conflict, breach, default or violation, individually or in the
aggregate, would have a Material Adverse Effect), or (D) will conflict
with or violate the certificate of incorporation or by-laws or other
organizational documents of the Company or any Subsidiary;
(xxviii) the Company has not taken, directly or indirectly,
any action designed to cause or result in or that has constituted or
that might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares;
(xxix) the Company and each of the Subsidiaries (A) are in
compliance with any and all applicable federal, state, local and
foreign laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (B) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their business and (C) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or approvals or failure
to comply with the terms and conditions of such permits, licenses or
approvals would not have a Material Adverse Effect; and
(xxx) there are no costs or liabilities, to the Company's
knowledge after due inquiry, associated with the effect of
Environmental Laws on the business, operations and properties of the
Company and its Subsidiaries that would have a Material Adverse Effect.
(b) The Selling Stockholder represents and warrants to the
Underwriters as of the Representation Date and as of the Closing
Date, as follows:
(i) The Selling Stockholder now has, and on the Closing Date
will have, valid title to the Shares to be sold by the Selling
Stockholder pursuant to this Agreement,
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free and clear of any security interests, liens, encumbrances, equities
or other claims, including, without limitation, any restriction on
transfer (except for restrictions imposed by applicable federal or
state securities laws) other than as specified on the certificate(s)
representing such Shares.
(ii) The Selling Stockholder now has, and on the Closing Date
will have, full legal right, power and authorization, and any approval
required by law (except such as may be required under the Act or such
as may be required by the NASD or under state securities or blue sky
laws governing the purchase and distribution of the Shares), to sell,
assign, transfer and deliver the Shares to be sold by the Selling
Stockholder pursuant to this Agreement in the manner provided in this
Agreement, and upon delivery of and payment for such Shares hereunder,
the several Underwriters will acquire valid title to such Shares free
and clear of any adverse claims, assuming that the Underwriters have
acquired such Shares for value, in good faith and without notice of any
adverse claim.
(iii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(iv) Neither the execution and delivery of this Agreement by
or on behalf of the Selling Stockholder nor the consummation of the
transactions herein contemplated by or on behalf of the Selling
Stockholder requires any consent, approval, authorization or order of,
or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required under the Act or such as may be
required by the NASD or under state securities or blue sky laws
governing the purchase and distribution of the Shares) or conflicts or
will conflict with or constitutes or will constitute a breach of, or
default under, or violates or will violate, any agreement, indenture or
other instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is or may be bound or to which any of the
Selling Stockholder's property or assets is subject, or any statute,
law, rule, regulation, ruling, judgment, injunction, order or decree
applicable to the Selling Stockholder or to any property or assets of
the Selling Stockholder, which breach, default or violation would
impair the Selling Stockholder's ability to perform under this
Agreement and would have any adverse impact on the Company or the
Underwriters under this Agreement.
(v) The information with respect to the Selling Stockholder
contained in the section entitled "Selling Stockholder" in the
Prospectus does not and will not on the Closing Date contain an 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, in light of the circumstances under which they were made, not
misleading.
(vi) The Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or
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manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares, except for the lock-up arrangements described in
the Prospectus.
(c) Any certificate signed by any officer of the Company or the Selling
Stockholder delivered to the Underwriters or to counsel for the Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by the Company or the Selling Stockholder, as the case may be, to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) Subject to the terms and conditions set forth herein, and
subject to adjustments as you may determine to avoid fractional shares:
(i) the Company agrees to sell to each Underwriter, severally
and not jointly, and, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, each Underwriter, severally and not jointly, agrees
to purchase from the Company, at a purchase price of $__________ per
share (the "Initial Price"), the aggregate number of Firm Shares that
bears the same proportion to the aggregate number of Firm Shares to be
issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I (or such number of
Firm Shares increased as provided in Section 9 hereof) bears to the
aggregate number of Firm Shares to be sold by the Company and the
Selling Stockholder. The Company will have no obligation to sell to the
Underwriters any of such Firm Shares that are being issued and sold by
the Company hereunder unless the Underwriters purchase all of the Firm
Shares hereunder; and
(ii) the Selling Stockholder agrees, severally and not
jointly, to sell to each Underwriter, severally and not jointly, and,
on the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, each Underwriter,
severally and not jointly, agrees to purchase from the Selling
Stockholder at the Initial Price, the aggregate number of Firm Shares
that bears the same proportion to the aggregate number of Firm Shares
to be sold by the Selling Stockholder as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as provided in Section 9 hereof)
bears to the aggregate number of Firm Shares to be sold by the Company
and the Selling Stockholder, and the Selling Stockholder will have no
obligation to sell to the Underwriters any of the Firm Shares to be
sold by the Selling Stockholder hereunder unless the Underwriters
purchase all of such Firm Shares hereunder.
(b) The Company grants to the Underwriters an option to purchase all or
any part of the Additional Shares at the Initial Price. Additional
Shares shall be purchased from the Company, severally and not jointly,
for the accounts of the Underwriters in proportion to the
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Xxxxxxxxx & Company, Inc.
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March 2_, 1997
Page 12
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter. Such option may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters and may be exercised in whole or in
part at any time on or before 12:00 noon, New York City time, on the business
day before the Firm Shares Closing Date (as hereinafter defined), and only once
thereafter within 30 days after the date of the Prospectus, in each case upon
written or telegraphic notice, or oral or telephonic notice confirmed by written
or facsimile notice, by the Underwriters to the Company no later than 12:00
noon, New York City time, on the business day before the Firm Shares Closing
Date or at least two business days before the Additional Shares Closing Date (as
hereinafter defined), as the case may be, setting forth the number of Additional
Shares to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
(c) Payment of the purchase prices for, and delivery of, the Firm
Shares to be purchased by the Underwriters shall be made at the offices of
Xxxxxxxxx & Company, Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 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 the third or fourth business day following
the date of the Registration Statement becomes effective (or, if the Company
elected to rely upon Rule 430A, the fourth business day after the date of
execution of this Agreement), or such other time not later than ten business
days after such date as shall be agreed upon by the Underwriters and the Company
(such time and date of payment and delivery being herein called the "Firm Shares
Closing Date"). Payment shall be made to the Company and the Selling
Stockholder, as the case may be, by wire transfer or in same day funds payable
to the order of the Company or the Selling Stockholder, as applicable, against
delivery to the Underwriters of the Firm Shares.
(d) Payment of the purchase price for, and delivery of, the Additional
Shares to be purchased by the Underwriters shall be made at the office as set
forth above or at such other place as shall be agreed upon by the Underwriters
and the Company at the time and on the date (which may be the same as, but in no
event shall be earlier than, the Firm Shares Closing Date) specified in the
notice referred to in Section (such time and date of delivery and payment being
herein called the "Additional Shares Closing Date"). The Firm Shares Closing
Date and the Additional Shares Closing Date are called, individually, the
"Closing Date" and together, the "Closing Dates". Payment shall be made to the
Company by wire transfer in same day funds payable to the order of the Company
against delivery to the Underwriters of the Additional Shares.
(e) Certificates representing the Shares shall be in such denominations
and registered in such names as the Underwriters may request in writing at least
two business days before the Firm Shares Closing Date or, in the case of
Additional Shares, on the day of notice of exercise of the option as described
in Section . The certificates representing the Shares will be made available for
examination and packaging by the Underwriters not later than 1:00 P.M., New York
City time, on the last business day prior to the Firm Shares Closing Date (or
the Additional Shares Closing Date in the case of the Additional Shares) at such
place as is designated by the Underwriters.
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SECTION 3. Covenants of the Company.
The Company covenants with each of the Underwriters as follows:
(a) the Company will use its best efforts to cause the Registration
Statement, if not effective at the Representation Date, and any amendment
thereof, to become effective, as promptly as possible after the filing thereof.
The Company will not file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus to which the Underwriters shall
reasonably object in writing after a reasonable opportunity to review such
amendment or supplement. Subject to the foregoing sentences in this clause (a),
if the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus or supplement to the Prospectus is otherwise
required under Rule 424(b), the Company will cause the Prospectus, properly
completed, or such supplement thereto to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriters of such timely filing.
The Company will promptly advise the Underwriters (i) when the Registration
Statement, if not effective at the Representation Date, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (iii) when any amendment to the Registration Statement
shall have been filed or become effective, (iv) of any request by the Commission
for any amendment of the Registration Statement or supplement to any Prospectus
or for any additional information, (v) of the receipt by the Company of any
notification of, or if the Company otherwise has knowledge of, the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the lifting
thereof;
(b) if, at any time when a prospectus relating to the Shares is
required to be delivered under the Act or the Act Regulations, any event occurs
as a result of which the Prospectus as then amended or supplemented would
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,
in the light of the circumstances under which they were made, not misleading, or
if it shall be necessary to amend the Registration Statement or amend or
supplement the Prospectus to comply with the Act or the Act Regulations, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section , an amendment or supplement
that will correct such statement or omission or effect such compliance.
(c) the Company consents to the use of the Prospectus in accordance
with the provisions of the Act and with the securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both
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Prudential Securities Incorporated
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March 2_, 1997
Page 14
in connection with the offering and sale of the Shares and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with the sales by any Underwriter or dealer. The Company will comply
with all requirements imposed upon it by the Act, as now and hereafter amended,
so far as necessary to permit the continuance of sales of or dealing in the
Shares in accordance with the provisions hereof and the Prospectus;
(d) as soon as practicable, the Company will make generally available
to its securityholders and to the Underwriters a consolidated earnings statement
or statements of the Company and the Subsidiaries covering a twelve-month period
beginning after the Effective Date that will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act Regulations;
(e) the Company will furnish to the Representatives, without charge,
four signed copies of the Registration Statement (including exhibits thereto and
all documents incorporated by reference therein) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, or the Act
Regulations, as many copies of the Prospectus and all amendments and supplements
thereto as the Underwriters may reasonably request;
(f) during the period of five years hereafter, the Company will furnish
to you, as soon as practicable after the end of each fiscal year, a copy of its
annual report to shareholders for such year; and the Company will furnish to you
(i) as soon as available, a copy of each report or definitive proxy statement of
the Company filed with the Commission under Exchange Act or mailed to
shareholders, and (ii) from time to time, such other information concerning the
Company as you may reasonably request, provided that prior to the Company's
furnishing any such other information that is non-public, you shall enter into
an agreement, in such form as the Company shall reasonably request, with respect
to the confidentiality of such information;
(g) the Company will not, and will cause each of its executive officers
and directors to enter into agreements with the Underwriters in the form set
forth in Exhibit A to the effect that they will not, for a period of 90 days
following the date of the Prospectus, without prior written consent of Xxxxxxxxx
& Company, Inc., offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any shares of Common Stock
or any securities convertible into, or exchangeable for, shares of Common Stock;
provided, however, that the Company may issue and sell Common Stock pursuant to
any stock bonus plan, stock grant plan or stock option plan in effect as of the
date of the Prospectus;
(h) the Company will comply with all the provisions of any undertakings
contained in the Registration Statement;
(i) the Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in accordance with the description set
forth in the "Use of Proceeds" section of the Prospectus;
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(j) the Company will cooperate with the Underwriters and their counsel
in connection with endeavoring to obtain and maintain the qualification or
registration, or exemption from qualification, of the Shares for offer and sale
under the applicable securities laws of such states and other jurisdictions of
the United States as the Underwriters may designate; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject it to
taxation or general service of process in any jurisdiction where it is not now
so subject; and
(k) the Company will cause the Shares to be duly listed on the New
York Stock Exchange.
SECTION 4. Covenants of the Selling Stockholders.
The Selling Stockholder covenants with each of the Underwriters as
follows:
(a) The Selling Stockholder shall cooperate to the extent reasonably
necessary to cause the Registration Statement, if not effective at the
Representation Date, and any amendment thereof, to become effective, as promptly
as possible after the filing thereof.
(b) Without prejudice to any rights the Selling Stockholder may have
against the Company, the Selling Stockholder shall pay all federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the Selling
Stockholder to the Underwriters.
(c) The Selling Stockholder shall do or perform all things required to
be done or performed by the Selling Stockholder prior to the Firm Shares Closing
Date to satisfy all conditions precedent to the delivery of and the payment for
the Shares to be sold by the Selling Stockholder pursuant to this Agreement.
(d) The Selling Stockholder will not at any time, directly or
indirectly, take any action intended, or that might reasonably be expected, to
cause or result in, or that will cause, stabilization of the price of the shares
of Common Stock to facilitate the sale or resale of any of the Shares.
(e) The Selling Stockholder will advise the Representatives promptly,
and if requested by the Representatives will confirm such advice in writing, of
any change in the information relating to the Selling Stockholder contained in
the Registration Statement under the caption "Selling Stockholder".
SECTION 5. Payment of Expenses.
The Company will pay, or reimburse if paid by the Underwriters, all
actual and reasonable costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholder under this Agreement,
including (i) the fees, disbursements and expenses of counsel and accountants
for the Company and the Selling Stockholder and all
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March 2_, 1997
Page 16
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the mailing and delivery of copies
thereof to the Underwriters and dealers, (ii) the cost of reproducing the
Agreement Among Underwriters, this Agreement, the Selling Agreement, any Dealer
Agreements, the Underwriters' Questionnaire and the Blue Sky Memorandum (in both
preliminary and final form); (iii) all expenses in connection with qualification
of the Shares for offering and sale under state securities laws as provided in
Section hereof, including filing and registration fees and the fees,
disbursements and expenses of counsel for the Underwriters in connection with
such qualification and in connection with Blue Sky surveys; (iv) the filing fees
incident to securing any required review by the NASD; (v) the cost of preparing
stock certificates; (vi) all fees of the Company's transfer agent and registrar;
(vii) any fees for including the Shares on the New York Stock Exchange; and
(viii) all other costs and expenses incident to the performances of its
obligations hereunder that are not otherwise specifically provided for in this
Section.
If this Agreement is terminated by the Underwriters because of any
failure or refusal on the part of the Company or the Selling Stockholder to
comply with the terms or fulfill any of the conditions of this Agreement, the
Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters. The Company shall not in any event be liable to
any of the Underwriters for consequential damages including loss of anticipated
profits from the transactions covered by this Agreement.
SECTION 6. Conditions of the Underwriters' Obligation.
The obligation of the Underwriters to purchase the Shares hereunder is
subject to the continued accuracy of the representations and warranties of the
Company and the Selling Stockholder herein contained, to the accuracy of the
statements of the Company and the Selling Stockholder made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholder of its obligations hereunder and to the following further
conditions:
(a) the Registration Statement shall have become effective, and you
shall have received notice thereof, not later than 5:30 p.m., Washington D.C.
time, on the date hereof, or such later time and date as shall be approved by
the Representatives and the Company and shall remain effective at the Closing
Date. No stop order suspending the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings therefor initiated or
threatened by the Commission. No order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Shares under
the securities or blue sky laws of any jurisdiction shall be in effect or
proceedings therefor initiated or threatened by the Commission or the
authorities of any such jurisdiction. If the Company has elected to rely upon
Rule 430A, the price of the Shares and any price-related or other information
previously omitted from the effective Registration Statement pursuant to Rule
430A shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time
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March 2_, 1997
Page 17
period, and, prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirement of Rule 430A;
(b) subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business, properties,
condition (financial or other) or results of operations of the Company and the
Subsidiaries, taken as a whole, which, in the reasonable judgment of the
Underwriters, materially impairs the investment quality of the Shares and
constitutes a Material Adverse Effect; (ii) any material loss or interference
with the business or properties of the Company or any of the Subsidiaries from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, that is not set forth in the Registration Statement and
the Prospectus, if in the reasonable judgment of the Underwriters any such
development makes it impracticable or inadvisable to proceed with completion of
the sale of and payment for the Shares; (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or The Nasdaq
National Market, or any setting of minimum prices for trading on such exchange
or system, or any suspension of trading of any securities of the Company on any
exchange or system or in the over-the-counter market; (iv) any banking
moratorium declared by federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration, calamity
or emergency makes it impractical or inadvisable to proceed with completion of
the sale of and payment for the Shares;
(c) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of the Subsidiaries or
any of their respective officers or directors in their capacities as such,
before or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, or
arbitrator, in which litigation or proceeding an unfavorable ruling, decision or
finding would have a Material Adverse Effect;
(d) each of the representations and warranties of the Selling
Stockholder contained herein shall be true and correct at the Closing Date, as
if made at the Closing Date, and all covenants and agreements contained herein
to be performed on the part of the Selling Stockholder, and all conditions
contained herein to be fulfilled or complied with by the Selling Stockholder at
or prior to the Closing Date, shall have been duly performed, fulfilled or
complied with, and the Representatives shall have received a certificate to such
effect, dated the Closing Date and signed by or on behalf of the Selling
Stockholder;
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March 2_, 1997
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(e) the Underwriters shall have received an opinion from Xxxxxx &
Xxxxxx L.L.P., counsel for the Company, satisfactory in form and substance to
counsel for the Underwriters, dated as of each Closing Date, to the effect set
forth in Exhibit B;
(f) the Underwriters shall have received an opinion from Xxxxxx X.
Xxxxxx, Esq., counsel for the Company, satisfactory in form and substance to
counsel for the Underwriters, dated as of each Closing Date, to the effect set
forth in Exhibit C;
(g) the Underwriters shall have received a favorable opinion, dated as
of each Closing Date, of Fulbright & Xxxxxxxx L.L.P., counsel for the
Underwriters, with respect to such matters as may be reasonably requested by the
Underwriters, and you shall have provided such counsel with such papers and
information as they may reasonably request to enable them to provide such
opinion;
(h) on the Firm Shares Closing Date, the Underwriters shall have
received an opinion from legal counsel for the Selling Stockholder, satisfactory
in form and substance to counsel for the Underwriters, dated as of the Firm
Shares Closing Date, to the effect set forth in Exhibit D;
(i) the following conditions contained in clauses (i), (ii) and (iii)
of this Section shall have been satisfied on and as of each Closing Date and the
Company shall have furnished to the Underwriters a certificate of the Company,
signed by the President and the principal financial or accounting officer of the
Company, dated such Closing Date to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Prospectus,
any supplement or amendment to the Prospectus, and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions under this
Agreement on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) 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 Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no change to the financial
condition of the Company that would have a Material Adverse Effect.
(j) At the Representation Date and at each Closing Date, Coopers &
Xxxxxxx L.L.P., KPMG Peat Marwick LLP and Xxxxxx Xxxxxxxx LLP shall have
furnished to the Underwriters, the Company and the Selling Stockholder a letter
or letters, dated respectively as of the date of this Agreement and each Closing
Date, in form and substance satisfactory to the
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March 2_, 1997
Page 19
Underwriters, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial and statistical information
pertaining to the Company and the Subsidiaries contained in the Registration
Statement and the Prospectus.
(k) At the Representation Date, the Company shall have furnished to the
Underwriters a letter substantially in the form of Exhibit A hereto from each
executive officer and director of the Company and the Selling Stockholder,
addressed to the Underwriters, in which each such person agrees not to offer,
sell or contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock beneficially owned by such
person or any securities convertible into, or exchangeable for, shares of Common
Stock for a period of 90 days following the date of the Prospectus without the
prior written consent of Xxxxxxxxx & Company, Inc.
(l) At the Closing Date, counsel for the Underwriters shall have been
furnished with such information, certificates and documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Shares as contemplated herein and related proceedings, or to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, or otherwise in
connection with the offering contemplated hereby; and all opinions and
certificates mentioned above or elsewhere in this Agreement shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
If any condition specified in this Section shall not have been fulfilled in all
material respects when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company and such termination
shall be without liability of any party to any other party except as provided in
Section 5.
SECTION 7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and its respective officers, shareholders, employees, directors and
agents and any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act from and against any loss,
expense, damage, liability or claim (including the reasonable cost of
investigating such claim) that, jointly or severally, any such Underwriter or
any such officer, shareholder, employee, director, agent or controlling person
may incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, damage, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof) or any omission or
alleged omission to state a material fact required to be stated in such
Registration Statement or necessary to make the statements made therein not
misleading or any untrue statement or alleged untrue statement of a material
fact contained in a Prospectus (the term Prospectus for the purpose of this
Section being deemed to include any Preliminary
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Jefferies & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
March 2_, 1997
Page 20
Prospectus, the Prospectus, the Prospectus as amended or supplemented and any
document filed under the Exchange Act and incorporated by reference into the
Prospectus) or any omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, the Company will not be liable in any such case to the extent any such
loss, expense, damage, liability or claim arises out of or is based upon any
untrue statement or omission or alleged untrue statement or omission that has
been made therein or omitted therefrom in reliance upon and in conformity with
the information provided in writing to the Company by or on behalf of the
Selling Stockholder or any Underwriter, expressly for use in the Registration
Statement or the Prospectus; and provided, further that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
Preliminary Prospectus the indemnity agreement contained in this Section shall
not inure to the benefit of any such indemnified Underwriter or its respective
officers, shareholders, employees, directors and agents, and the Company shall
not be liable to any such indemnified Underwriter or its respective officers,
shareholders, employees, directors and agents, from whom the person asserting
any such losses, claims, expense, damage, or liabilities purchased the Shares
concerned, to the extent that any such loss, claim, expense, damage or liability
of such indemnified Underwriter or its respective officers, shareholders,
employees, directors, and agents results from the fact that there was not sent
or given to such person at or prior to the written confirmation of the sale of
such shares to such person, a copy of the Prospectus, as the same may be amended
or supplemented, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in such Prospectus and the Company had
previously furnished copies thereof to such indemnified Underwriter on a timely
basis to permit the Prospectus (as the same may be amended or supplemented) to
be sent or given. The Company agrees that the only such information provided in
writing by or on behalf of any Underwriter to the Company, expressly for use in
the Registration Statement or the Prospectus, is that information contained in
the table and the second, fifth and eighth paragraphs following the table in the
section of the Prospectus entitled "Underwriting" and the last paragraph on the
cover page of the Prospectus. The foregoing indemnity agreement shall be in
addition to any liability that the Company may otherwise have.
(b) The Selling Stockholder agrees to indemnify, defend and hold
harmless each Underwriter and its respective officers, shareholders, employees
and directors and any person who controls any Underwriter within the meaning of
Section 15 of the Act from and against any loss, expense, liability or claim
(including the reasonable cost of investigating such claim) that, jointly or
severally, any such Underwriter or any such officer, shareholder, employee,
director or controlling person may incur under the Act, the Exchange Act or
otherwise, as such expenses are incurred, insofar as such loss, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact supplied by the Selling Stockholder
for use in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof) or any omission or alleged
omission to state a material fact required to be stated in such Registration
Statement or necessary to make the statements made therein not misleading or any
untrue statement or alleged untrue
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Jefferies & Company, Inc.
Prudential Securities Incorporated
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March 2_, 1997
Page 21
statement of a material fact contained in a Prospectus (the term Prospectus for
the purpose of this Section being deemed to include any Preliminary Prospectus,
the Prospectus, the Prospectus as amended or supplemented and any document filed
under the Exchange Act and incorporated by reference into the Prospectus) or any
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus, the indemnity
agreement contained in this Section shall not inure to the benefit of any such
indemnified Underwriter or its respective officers, shareholders, employees and
directors, and the Selling Stockholder shall not be liable to any such
indemnified Underwriter or its respective officers, shareholders, employees and
directors, from whom the person asserting any such losses, claims, damage, or
liabilities purchased the Shares concerned, to the extent that any such loss,
claim, damage or liability of such indemnified Underwriter or its respective
officers, shareholders, employees and directors results from the fact that there
was not sent or given to such person at or prior to the written confirmation of
the sale of such shares to such person, a copy of the Prospectus, as the same
may be amended or supplemented, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in such Prospectus and the
Company had previously furnished copies thereof to such indemnified Underwriter
on a timely basis to permit the Prospectus (as the same may be amended or
supplemented) to be sent or given, and provided further, that the liability of
the Selling Stockholder pursuant hereto shall not exceed an amount equal to the
net proceeds received by the Selling Stockholder from the sale of its Shares
hereunder to the Underwriter. The Underwriters agree that the only information
provided in writing by or on behalf of the Selling Stockholder expressly for use
in the Registration Statement is that information contained in the section of
the Prospectus entitled "Selling Stockholder".
(c) Each Underwriter agrees to indemnify, defend and hold harmless the
Selling Stockholder, the Company and their respective officers, shareholders,
employees and directors and any person who controls either of them within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any loss, expense, damage, liability or claim (including the reasonable
cost of investigating such claim) that the Selling Stockholder, Company or any
such officer, shareholder, employee, director or controlling person may incur
under the Act, the Exchange Act or otherwise to the same extent as the
provisions of Section 7.(a) above, but only insofar as such loss, expense,
damage, liability or claim arises out of or is based upon any untrue statement
or omission or alleged untrue statement or omission made in reliance or in
conformity with information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter, expressly for use in the
Registration Statement or the Prospectus. The Selling Stockholder and the
Company agree that the only information provided in writing by or on behalf of
the Underwriters to the Company, expressly for use in the Registration Statement
or the Prospectus, is that information contained in the table and the second,
fifth and eighth paragraphs following the table in the section of the Prospectus
entitled "Underwriting" and the last paragraph on the cover page of the
Prospectus.
22
Jefferies & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
March 2_, 1997
Page 22
(d) If any action is brought against an indemnified party under this
Section , the indemnified party or parties shall promptly notify the
indemnifying party in writing of the institution of such action (provided that
the failure to give such notice shall not relieve the indemnifying party of any
liability that it may have pursuant to this Agreement, unless and to the extent
the indemnifying party did not otherwise learn of such action and such failure
has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the indemnifying party shall assume the defense of such
action, including the employment of counsel and payment of reasonable expenses.
The indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
take charge of the defense of such action within a reasonable time after notice
of the institution of such action or (iii) the named parties to any such
proceeding (including any impleaded parties) include both an indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between the named parties (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying party and paid
as incurred; provided that the indemnifying party shall only be responsible for
the fees and expenses of one counsel for the indemnified party or parties
hereunder. Anything in this paragraph to the contrary notwithstanding, the
indemnifying party shall not be liable for any settlement of any such claim or
action effected without its written consent, which consent shall not be
unreasonably withheld.
(e) If the indemnification provided for in this Section is unavailable
to an indemnified party under subsection (a), (b) or (c) of this Section in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the Company and the Selling
Stockholder on the one hand and of the Underwriters on the other hand shall be
determined by reference to, among other
23
Xxxxxxxxx & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
March 2_, 1997
Page 23
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company, the Selling Stockholder or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
(f) The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in Section
above. Notwithstanding the provisions of this Section , (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discount
received by it by reason of such untrue statement or alleged untrue statement or
omission or alleged omission, (ii) the Selling Stockholder shall not be required
to contribute any amount in excess of the gross proceeds received by the Selling
Stockholder from the sale of the Shares pursuant to this Agreement and (iii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. The
respective indemnity and contribution agreements contained in Section , and the
covenants, representations and warranties of the Company and the Selling
Stockholder contained in this Agreement or contained in certificates of officers
of the Company and the Selling Stockholder submitted pursuant hereto, shall
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter or any of its
respective officers, employees, directors, shareholders, agents or any person
who controls any Underwriters, or by or on behalf of the Company or the Selling
Stockholder or any of the officers or directors or any controlling person of the
Company or the Selling Stockholder, as the case may be, and will survive
delivery of and payment for the Shares.
SECTION 9. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on either the Firm Shares
Closing Date or the Additional Shares Closing Date and the aggregate number of
Shares that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of Shares that the Underwriters
are obligated to purchase on such Closing Date, the Representatives may make
arrangements satisfactory to the Company and the Selling Stockholder for the
purchase of such Shares by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Shares that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of Shares with respect to which
such default or defaults occur exceeds 10% of the total number of Shares that
the Underwriters are obligated to purchase on such Closing
24
Jefferies & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Rice & Company
March 2_, 1997
Page 24
Date and arrangements satisfactory to the Representatives and the Company and
the Selling Stockholder for the purchase of such Shares by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholder, except as provided in this Section (provided that if such
default occurs with respect to the Additional Shares after the Firm Shares
Closing Date, this Agreement will not terminate as to the Firm Shares). As used
in this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 10. Notices. All notices and other communications hereunder will be in
writing and shall be deemed to have been duly given if mailed or transmitted
by standard form of telecommunication. Notices to the Underwriters shall be
directed to the Underwriters in care of:
Jefferies & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention of Xxxxx Xxxxx, Esq.
with a copy to: Xxxxxx X. Xxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or, if sent to the Company, directed to:
Xxxxxx Drilling Company
Xxxxxx Building
Eight East Third Street
Tulsa, Oklahoma 74103
Attention of Xxxxxx X. Xxxxxx, Esq.
25
Jefferies & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
March 2_, 1997
Page 25
with a copy to: T. Xxxx Xxxxx
Xxxxxx & Xxxxxx LLP
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
or, if sent to the Selling Stockholder, directed to:
Energy Ventures, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Duroc-Xxxxxx
SECTION 11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and the Selling Stockholder and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to provide any person, firm
or corporation, other than the Underwriters, the Company and the Selling
Stockholder and their respective successors and legal representatives and the
controlling persons, officers, employees, directors and shareholders referred to
in Sections and and their respective heirs and legal representatives, any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Stockholder and their respective
successors and legal representatives, and such controlling persons,
shareholders, officers and directors and their respective heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Shares from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in such State. Specified times of day refer
to New York time, unless otherwise specified.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
26
Jefferies & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Xxxx & Company
March 2_, 1997
Page 26
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Company and the Underwriters in accordance with its terms.
Very truly yours,
XXXXXX DRILLING COMPANY
By:___________________________________
Name:_________________________________
Title:________________________________
SELLING STOCKHOLDER
Energy Ventures, Inc.
By:___________________________________
Name:_________________________________
Title:________________________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
JEFFERIES & COMPANY, INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX RICE & COMPANY
As Representatives of the Several Underwriters
JEFFERIES & COMPANY, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
27
SCHEDULE I
UNDERWRITERS
Number of Firm
Shares to be
Name of Underwriter Purchased
------------------------------------------------------- --------------
Jefferies & Company, Inc...............................
Prudential Securities Incorporated.....................
Xxxxxxx Xxxx & Company.................................
Total 10,056,600
28
SCHEDULE II
SUBSIDIARIES
Name Jurisdiction Ownership (%)
---------------------------- --------------------- --------------------
Choctaw International Rig Corporation (Nevada) 100
DGH, Inc. (Texas) 100
Xxxxxx Drilling Company Eastern Hemisphere, Ltd. (Oklahoma) 100
Xxxxxx Drilling Company International Limited (Nevada) 100
Xxxxxx Drilling Company Limited (Nevada) 100
Xxxxxx Drilling Company of Alaska, Limited (Alaska) 100
Xxxxxx Drilling Company of Oklahoma Inc. (Oklahoma) 000
Xxxxxx Xxxxxxxx Xxxxxxx xx Xxxxx Xxxxxxx, Inc. (Oklahoma) 000
Xxxxxx Xxxxxxxx X.X.X. Ltd. (Nevada) 000
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx, Inc. (Oklahoma) 100
Xxxxxx Drilling Company of New Guinea, Inc. (Oklahoma) 100
Xxxxxx Technology, Inc. (Oklahoma) 100
Xxxxx Systems Engineering, Inc. (Texas) 000
Xxxxxxx Xxx Drilling, Inc. (Louisiana) 100
Xxxxx Tools, Inc. (Louisiana) 100
AWI Drilling & Workover, Inc. (Louisiana) 100
Bay Drilling Corporation (Louisiana) 000
Xxxxxxx Xxxxxxxx International, Inc. (Cayman) 000
Xxxxxxx Xxxxxxxxx Holdings, Ltd. (Cayman) 000
Xxxxxxx Xxxxxxxx xx Xxxxx Xxxxxxx, Inc. (Cayman) 100
29
EXHIBIT A
___________________, 1997
Xxxxxxxxx & Company, Inc.
Prudential Securities Incorporated
Xxxxxxx Rice & Company
c/o Jefferies & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Dear Sirs:
The undersigned has been informed that you, as representatives of the
underwriters (the "Underwriters"), are planning to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Xxxxxx Drilling Company, a
Delaware corporation (the "Company"), and Energy Ventures, Inc. (the "Selling
Stockholder"), providing for the purchase by the Underwriters of 10,000,000
shares of the Company's common stock, $.16 2/3 par value (the "Common Stock")
from the Company and 3,056,600 shares of Common Stock from the Selling
Stockholder, with the right to purchase up to __________ additional shares of
Common Stock from the Company to cover over-allotments.
To induce you to enter into the Underwriting Agreement and in
consideration of the purchase and public offering by you of such shares of
Common Stock (which the undersigned considers to be in the best interests of the
Company and its shareholders and to the undersigned's benefit), the undersigned
agrees with the Underwriters that for a period of 90 days from the date of the
final Prospectus relating to such sale of Common Stock covered by the
Underwriting Agreement, the undersigned will not without the prior written
consent of Jefferies & Company, Inc., or unless pursuant to bona fide gifts to
persons or entities who agree to be bound by the provisions of this letter,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock beneficially
owned by the undersigned or any securities convertible into, or exchangeable
for, shares of Common Stock.
Very truly yours,
A-1
30
EXHIBIT B
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus;
(ii) there are no preemptive or other rights to subscribe for or to
purchase shares of capital stock of the Company, pursuant to any statute, the
articles of incorporation or by-laws of the Company;
(iii) to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of the Subsidiaries required
to be disclosed in the Prospectus that is not adequately disclosed in the
Prospectus;
(iv) to such counsel's knowledge, there is no contract or other
document of a character which is required to be filed as an exhibit to the
Registration Statement which has not been filed as required;
(v) the Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period required by Rule
424(b); to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened;
(vi) the statements in the Registration Statement and Prospectus under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business", insofar as they are descriptions of contracts,
agreements or other legal documents, are accurate in all material respects and
present fairly, the information required to be shown;
(vii) this Agreement has been duly authorized, executed and delivered
by the Company and the Company has full corporate power and authority to enter
into this Agreement;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required in connection with the execution and
delivery of this Agreement or for the issuance and sale by the Company of the
Shares, except such as have been obtained under the Act and such as may be
required under the state securities or blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Shares by the Underwriters
and such other approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, will result in a breach
of, or constitute a default under, (a) the terms of any indenture or other
agreement or instrument (i) to which the Company or any of the Subsidiaries is a
party or by which it is bound and (ii) that is either filed as an exhibit to the
Registration Statement or is identified to such counsel as being material to the
Company and the Subsidiaries, taken as a whole, and listed on a schedule to such
counsel's opinion, (b) any law, statute, rule, order, regulation or decree of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of the Subsidiaries of
which such counsel is aware and that is known by such counsel
B-1
31
to be applicable to the Company or any of the Subsidiaries (where such conflict,
breach or default would have a Material Adverse Effect and other than Federal or
state securities or blue sky laws, as to which such counsel need not express an
opinion in this subparagraph) or (c) the certificate of incorporation or by-laws
of the Company;
(x) the Shares have been duly and validly authorized by the Company for
issuance, and the Company has full corporate power and authority to issue, sell
and deliver the Shares; and, when the Shares are issued and delivered against
payment therefor as provided by this Agreement, the Shares will have been
validly issued and will be fully paid and nonassessable, and the issuance of
such Shares will not be subject to any statutory preemptive rights or similar
statutory rights;
(xi) the certificates for the Shares are in due and proper form under
Delaware law and the by-laws of the Company and conform with the form of
certificates duly authorized by the Board of Directors of the Company;
(xii) the Shares, when issued, will conform in all material respects to
the description thereof contained in the Prospectus and the Registration
Statement under the caption "Description of Capital Stock"; and
(xiii) the Company is not an "investment company" as defined under the
Investment Company Act or subject to registration under such Act.
In addition, such counsel shall state that such counsel is of the
opinion that the Registration Statement and the Prospectus (except the financial
statements, supporting schedules and other information of a financial nature
included therein, as to which such counsel does not express any opinion) comply
as to form in all material respects with the requirements of the Act and the
applicable Act Regulations. In passing upon the form of the Registration
Statement and the Prospectus, such counsel has necessarily assumed the
correctness and completeness of the statements made therein. Such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent set forth in subparagraphs
(iii), (iv) and (vi) above), and such counsel has not independently verified the
accuracy, completeness or fairness of such statements (except as aforesaid).
Without limiting the foregoing, such counsel assumes no responsibility for and
has not independently verified the accuracy, completeness or fairness of the
financial statements and other financial data included in the Registration
Statement and has not examined the financial or reserve records from which such
statements and data are derived. Such counsel notes that, although certain
portions of the Registration Statement have been included therein on the
authority of "experts" within the meaning of the Act, such counsel is not an
expert with respect to any portion of the Registration Statement. However, such
counsel shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the
independent accountants of the Company, and with the underwriters'
representatives and counsel, at which the contents of the Registration Statement
and Prospectus and related matters were discussed. Such counsel has also
reviewed certain corporate documents furnished to them by the Company. Based on
such participation and review (relying as to materiality to a certain extent
upon the officers and the other representatives of the Company), and subject to
the limitations described above, such counsel shall state that no information
has come to such counsel's attention that causes them to believe that the
Registration Statement, at the time it became effective or as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state
B-2
32
a material fact required to be stated therein or necessary to make the
statements therein no misleading, or that the Prospectus, as of its date or as
of the Closing Date, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware and the federal
laws of the United States of America, to the extent applicable.
B-3
33
EXHIBIT C
(i) each of the Subsidiaries with foreign operations is duly registered
and qualified to conduct its business and is in good standing in each foreign
jurisdiction where the nature or location of its properties (owned or leased) or
the conduct of its business requires such registration or qualification, except
where the failure so to register or qualify would not have a Material Adverse
Effect;
(ii) to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving any of the Subsidiaries with respect to its
foreign operations required to be disclosed in the Prospectus that is not
adequately disclosed in the Prospectus;
(iii) to such counsel's knowledge, with respect to the foreign
operations of the Subsidiaries, there is no contract or other document required
to be described in the Registration Statement or Prospectus, or to be filed as
an exhibit, that is not described or filed as required;
(iv) with respect to the foreign operations of the Subsidiaries, the
statements in the Registration Statement and Prospectus, insofar as they are
descriptions of contracts, agreements or other legal documents, are accurate in
all material respects and present fairly the information required to be shown.
(v) each Significant Subsidiary as defined in the Act Regulations has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus;
(vi) each of the Company and the Significant Subsidiaries is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction where the nature or location of its properties (owned or leased) or
the conduct of its business requires such registration or qualification, except
where the failure so to register or qualify would not have a Material Adverse
Effect;
(vii) all the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of each such Subsidiary are owned of record
and, to such counsel's knowledge, beneficially by the Company, either directly
or through a wholly owned subsidiary of the Company, free and clear of any
perfected security interests and, to such counsel's knowledge, any other
security interests, liens, encumbrances, equities, other rights to purchase or
other claims;
(viii) there are no preemptive or other rights to subscribe for or to
purchase shares of capital stock of the Company pursuant to any statute, the
articles of incorporation or by-laws of the Company or, to such counsel's
knowledge, any agreement or other instrument to which the Company is a party as
to which any person can successfully maintain an action, suit or proceeding
against the Company for violation of his or her preemptive rights with respect
to the issuance of any shares of capital stock of the Company;
C-1
34
(ix) all of the Company's issued and outstanding capital stock has been
duly authorized and validly issued and is fully paid and nonassessable as of the
date hereof and the authorized capital stock of the Company conforms in all
material respects to the descriptions thereof under the caption "Description of
Capital Stock" in the Prospectus;
(x) to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of the Subsidiaries required
to be disclosed in the Prospectus that is not adequately disclosed in the
Prospectus; and
(xi) to such counsel's knowledge, no holder of any securities of the
Company or any other person has the right, contractual or otherwise, to cause
the Company to sell or otherwise issue to such person, or to permit such person
to underwrite the sale of, any of the Shares or the right to have any Common
Stock or other securities of the Company included in the Registration Statement
or the right, as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock or other
securities of the Company that has not been waived or lapsed.
In addition, such counsel shall also state that such counsel has
participated in conferences with representatives of the Underwriters, officers
and other representatives of the Company and representatives of the independent
certified public accountants of the Company and the Subsidiaries at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed and that, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as set forth in clause (iv), (ix) or (x) of this Exhibit C),
on the basis of the foregoing (relying as to materiality upon officers and other
representatives of the Company), no facts have come to the attention of such
counsel that lead such counsel to believe that the Registration Statement at the
time it became effective or at the Representation Date and the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a prospectus that
has been provided to the Underwriters by the Company for use in connection with
the offering of the Shares that differs from the Prospectus on file at the
Commission at the Representation Date, in which case at the time it is first
provided to the Underwriters for such use) or at the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, that such counsel need not express any comment with
respect to the financial statements and schedules contained therein, including
the notes thereto, the auditors' report thereon and the related summary of
accounting policies.
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware, the laws of
the State of Oklahoma and the federal laws of the United States of America, to
the extent applicable.
C-2
35
EXHIBIT D
(i) the Agreement has been duly executed and delivered by or on behalf
of the Selling Stockholder;
(ii) to such counsel's knowledge, the Selling Stockholder has
corporate power and authority to sell, assign, transfer and deliver the Shares;
(iii) to such counsel's knowledge, the execution and delivery of the
Agreement by or on behalf of the Selling Stockholder and the sale of the Shares
pursuant to the terms thereof will not conflict with or violate, result in a
breach of or constitute a default under the terms or provisions of any
agreement, indenture, mortgage or other instrument to which the Selling
Stockholder is a party or by which it or any of its assets or property is bound
and which has been identified to such counsel as being material to the Selling
Stockholder and its subsidiaries, taken as a whole, or any court order or decree
or any laws, rule, or regulation (except such as may be required under the Act
or such as may be required by the NASD or under state securities or blue sky
laws governing the purchase and distribution of the Shares) applicable to the
Selling Stockholder or to any of the property or assets of the Selling
Stockholder, which breach, default or violation would impair the Selling
Stockholder's ability to sell the Shares pursuant to the terms of the Agreement;
and
(iv) upon delivery of the Shares that the Selling Stockholder has
agreed to sell pursuant to the Agreement and payment therefor as contemplated
therein and assuming the Underwriters are acquiring the Shares in good faith
without notice of any adverse claims, the Underwriters will acquire valid title
to such Shares free and clear of any adverse claims.
D-1
