Forest Oil Corporation
10,200,000 Shares
Common Stock
($.10 par value)
U.S. Underwriting Agreement
New York, New York
, 1996
Salomon Brothers Inc
Xxxxxx, Read & Co. Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
As Representatives of the several U.S. Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Forest Oil Corporation, a New York corporation (the
"Company"), and Saxon Petroleum Inc. (the "Selling Stockholder")
propose to sell 9,299,000 and 901,000 shares, respectively, of
Common Stock $.10 par value (the "Common Stock"), of the Company
(said shares to be issued and sold by the Company and the Selling
Stockholder being hereinafter called the "U.S. Underwritten
Securities"), to the underwriters named in Schedule I hereto (the
"U.S. Underwriters"), for whom you (the "Representatives") are
acting as representatives. The Company also proposes to grant to
the U.S. Underwriters an option to purchase up to an additional
1,530,000 shares of Common Stock (the "U.S. Option Securities";
the U.S. Option Securities, together with the U.S. Underwritten
Securities, being hereinafter called the "U.S. Securities").
It is understood that the Company and the Selling
Stockholder are concurrently entering into an International
Underwriting Agreement dated the date hereof (the "International
Underwriting Agreement") providing for (i) the sale by the
Company and the Selling Stockholder of an aggregate of 1,800,000
shares of Common Stock (the "International Underwritten
Securities") and (ii) the grant by the Company of an option to
the International Underwriters referred to below to purchase up
to an additional 270,000 shares of Common Stock (the
"International Option
--------------
(1) Plus an option to purchase from the Company up to 1,530,000 additional
shares to cover over-allotments.
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Securities"); the International Option Securities together with the
International Underwritten Securities, being hereinafter called the
"International Securities," and, together with the U.S. Securities, the
"Securities"). It is contemplated that the International Securities shall be
sold outside the United States and Canada through arrangements with certain
underwriters outside the United States and Canada (the "International
Underwriters") for whom Salomon Brothers International Limited, Xxxxxx, Read
& Co. Inc. and Xxxxxx Xxxxxxx & Co. International Limited are acting as
representatives (the "International Representatives"). It is further
understood and agreed that the U.S. Underwriters and the International
Underwriters have entered into an Agreement Between U.S. Underwriters and
International Underwriters dated the date hereof (the "Agreement Between U.S.
Underwriters and International Underwriters"), pursuant to which, among other
things, the International Underwriters may purchase from the U.S.
Underwriters a portion of the U.S. Securities to be sold pursuant to the U.S.
Underwriting Agreement and the U.S. Underwriters may purchase from the
International Underwriters a portion of the International Securities to be
sold pursuant to the International Underwriting Agreement.
Pursuant to the Acquisition Agreement ("Acquisition
Agreement") dated December 12, 1995 by and among the Company,
ATCOR Resources Ltd., a Canadian corporation ("ATCOR"), Atco
Ltd., a corporation incorporated under the laws of Alberta,
Canadian Utilities Limited, a Canadian corporation ("Canadian
Utilities"), and Canutilities Holdings Ltd., a corporation
incorporated under the laws of Alberta ("Canutilities") and
subject to the terms and conditions set forth therein, the
Company agreed to purchase Atco Ltd., Canadian Utilities and
Canutilities agreed to sell ATCOR (the "Acquisition"), as more
fully described in the Prospectuses (as hereinafter defined).
Consummation of the Acquisition and the purchase of the U.S.
Underwritten Securities by the U.S. Underwriters and the
International Underwritten Securities by the International
Underwriters, are mutually contingent transactions, and the
Company intends that the closing of the Acquisition shall occur
immediately following the consummation of the transactions
contemplated by this Agreement and the International Underwriting
Agreement.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees
with, each U.S. Underwriter as set forth below in this Section
1(a). Certain terms used in this Section 1 are defined in
paragraph (iv) hereof.
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(i) The Company meets the requirements for use of
Form S-2 under the Securities Act of 1933 (the "Act") and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (file number 33-
64949) on such Form, including related Preliminary
Prospectuses, for the registration under the Act of the
offering and sale of the Securities. The Company has filed
one or more amendments thereto, including the related
Preliminary Prospectuses, each of which has previously been
furnished to you. The Company will next file with the
Commission either (i) prior to effectiveness of such
registration statement, a further amendment to such
registration statement (including the form of final
prospectuses) or (ii) after effectiveness of such
registration statement, final prospectuses in accordance
with Rules 430A and 424(b)(1) or (4). In the case of clause
(ii), the Company has included in such registration
statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Prospectuses with
respect to the Securities and the offering thereof. As
filed, such amendment and form of final prospectuses, or
such final prospectuses, shall include all Rule 430A
Information, together with all other such required
information, with respect to the Securities and the offering
thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
latest U.S. Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included
or made therein.
(ii) It is understood that two forms of prospectuses
are to be used in connection with the offering and sale of
the Securities: one form of prospectus relating to the U.S.
Securities, which are to be offered and sold to United
States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be
offered and sold to persons other than United States and
Canadian Persons. Such form of prospectus relating to the
U.S. Securities as first filed pursuant to Rule 424(b) or,
if no filing pursuant to Rule 424(b) is made, such form of
prospectus included in the Registration Statement at the
Effective Date, is referred to herein as the "U.S. Prospectus";
such form of prospectus relating to the International Securities
as first filed pursuant to Rule 424(b) or, if no filing pursuant
to Rule 424(b) is made, such form of prospectus included in the
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Registration Statement at the Effective Date, is referred to herein
as the "International Prospectus"; and the U.S. Prospectus and the
International Prospectus are collectively referred to herein as the
"Prospectuses".
(iii) To the best of the Company's knowledge, no
order preventing or suspending the use of any Preliminary
Prospectuses has been issued by the Commission. On the
Effective Date, the Registration Statement did or will, and
when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the
Prospectuses (and any supplements thereto) will, comply in
all material respects with the applicable requirements of
the Act and the Securities Exchange Act of 1934 (the
"Exchange Act") and the respective rules and regulations
thereunder. On the Effective Date, the Registration
Statement did not or 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, each Prospectus, if not filed pursuant to Rule 424(b),
did not or will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date, each Prospectus
(together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that the
Company makes no representations or warranties as to the
information contained in or omitted from the Registration
Statement, or the Prospectuses (or any supplement thereto)
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
U.S. Underwriter through the Representatives specifically
for inclusion in or omission from the Registration Statement
or the Prospectuses (or any supplement thereto).
(iv) The terms which 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. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. The "U.S. Preliminary
Prospectus" and the "International Preliminary Prospectus",
respectively, shall mean any preliminary prospectus with
respect to the offering of the U.S. Securities and the
International Securities, as the case may be, referred to in
paragraph (i) above and any preliminary prospectus with
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respect to the offering of the U.S. Securities and the
International Securities, as the case may be, included in
the Registration Statement at the Effective Date that omits
Rule 430A Information; and the U.S. Preliminary Prospectus
and the International Preliminary Prospectus are hereinafter
collectively called the "Preliminary Prospectuses".
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after
the Execution Time or, if no filing pursuant to Rule 424(b)
is required, shall mean the form of final prospectus
relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement"
shall mean the registration statement referred to in
paragraph (i) above, including incorporated documents,
exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time,
in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective
prior to the Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended. Such
term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule
430A. "Rule 424" and "Rule 430A" refer to such rules under
the Act. "Rule 430A Information" means information with
respect to the Securities and the offering thereof permitted
to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, a Preliminary
Prospectus or the Prospectuses shall be deemed to refer to
and include the documents (or any portions thereof)
incorporated by reference therein pursuant to Item 12 of
Form S-2 whether filed under the Exchange Act or delivered
pursuant to Item 11 of Form S-2. Any reference herein to
the Registration Statement, a Preliminary Prospectus or the
Prospectuses shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item
12 of Form S-2 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
Prospectuses, 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 Prospectuses 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
Prospectuses, as the case may be, deemed to be incorporated
therein by reference. "United States or Canadian Person"
shall mean any person who is a national or resident of the
United States or Canada, any
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corporation, partnership, or other entity created or organized in
or under the laws of the United States or Canada or of any political
subdivision thereof, or any estate or trust the income of which is
subject to United States or Canadian Federal income
taxation, regardless of its source (other than any non-
United States or non-Canadian branch of any United States or
Canadian Person), and shall include any United States or
Canadian branch of a person other than a United States or
Canadian Person. "U.S." or "United States" shall mean the
United States of America (including the states thereof and
the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
(v) The only corporate subsidiaries of the Company
are listed on Schedule II hereto and are each referred to
herein as a "subsidiary" and are collectively referred to
herein as the "subsidiaries".
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New York, and each subsidiary of the
Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its
jurisdiction of incorporation or organization, as the case
may be, and each has the corporate power and authority to
own its properties and conduct its business as described in
the Prospectuses, and has been duly qualified as a foreign
corporation and is in good standing under the laws of each
other jurisdiction in which its ownership or leasing of its
properties or its conduct of its material business makes
such qualification necessary, except to the extent that any
failure to so qualify or be in good standing would not have
a material adverse effect on the condition (financial or
other), earnings, business or properties of the Company and
its subsidiaries, taken as a whole.
(vii) The issuance and sale of the Securities to be
sold by the Company under this Agreement and the
International Underwriting Agreement and the fulfillment of
the terms of this Agreement, the International Underwriting
Agreement or the Acquisition Agreement do not result in a
breach of any of the terms or provisions of, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, (i) the Restated
Certificate of Incorporation or Bylaws of the Company or its
subsidiaries, (ii) any bond, debenture, note, loan
agreement, indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or its
subsidiaries is now a
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party or by which any of them is bound, or (iii) any order of any
court or governmental agency or authority entered in any proceeding
to which the Company or its subsidiaries was or is now a party or by
which either of them is bound, which default or breach would
have a material adverse effect on the condition (financial
or other), earnings, business or properties of the Company
and its subsidiaries, taken as a whole.
(viii) Neither the Company, nor any of its
subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Prospectuses; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, there has not been any material increase in
the long-term debt of the Company or any of its
subsidiaries.
(ix) The Company has all requisite corporate power
and authority to enter into this Agreement, the
International Underwriting Agreement and the Acquisition
Agreement, to issue, sell and deliver the Securities as
provided herein and to consummate the transactions
contemplated herein and in the Acquisition Agreement, and
this Agreement, the International Underwriting Agreement and
the Acquisition Agreement has been duly authorized, executed
and delivered by the Company. Each consent, approval,
authorization, order, declaration or filing by or with any
governmental agency or body necessary for the offer and sale
of the Securities, the execution, delivery and performance
of this Agreement, the International Underwriting Agreement
and the Acquisition Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby, by the International Underwriting Agreement, and by
the Acquisition Agreement have been made or obtained, except
such as may be necessary to make the Registration Statement
effective (and maintain it as effective) under the Act and
to qualify the Securities for public offering by you under
state securities or Blue Sky laws or by the National
Association of Securities Dealers, Inc. ("NASD") in
connection with the purchase and distribution of the
Securities by the U.S. Underwriters and the International
Underwriters.
(x) The actual and as adjusted capitalization of
the Company as of September 30, 1995 is as set forth under the
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heading "Capitalization" in the Prospectuses; the issued
shares of capital stock of the Company conform to the
description thereof in the Prospectuses and have been duly
authorized and validly issued and are fully paid and
nonassessable; all outstanding shares of capital stock of
each of the subsidiaries have been duly authorized and
validly issued, and are fully paid and nonassessable and
(except as described in the Registration Statement) are
owned directly by the Company or by another subsidiary of
the Company free and clear of any liens, encumbrances,
equities or claims.
(xi) The Securities to be issued and sold by the
Company to the U.S. Underwriters hereunder and to the
International Underwriters under the International
Underwriting Agreement have been duly authorized and, when
issued and paid for as contemplated herein, will be validly
issued, fully paid and nonassessable and will conform to the
description thereof in the Prospectuses and will not have
been issued in violation of or subject to any preemptive
rights or rights of first refusal.
(xii) Except as described in the Registration
Statement, there are no options, warrants, agreements,
preemptive rights, conversion rights, contracts or other
rights in existence to purchase or acquire from the Company
any shares of the capital stock or securities or obligations
convertible into, or any contracts or commitments to issue
or sell shares of capital stock or any such rights or other
securities of the Company. The descriptions of the
Company's retirement and savings plans, stock option, stock
purchase and other stock plans or arrangements, and the
options or other rights granted and exercised thereunder, as
set forth in the Prospectuses, are accurate and fair
summaries of such plans, arrangements, options and rights.
(xiii) There are no legal, regulatory,
administrative or governmental actions, suits or proceedings
pending to which the Company or any of its subsidiaries or
any of their officers is a party or of which any properties
of the Company or any of its subsidiaries is the subject
except as set forth in the Prospectuses, or as individually
or in the aggregate, do not now have and are not reasonably
expected in the future to have any material adverse effect
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, taken as a
whole; and to the best knowledge of the Company, no such
proceedings are threatened or contemplated by any of such
governmental, regulatory or administrative authorities or
others and there
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are no agreements, contracts, leases or documents of the Company
or any of its subsidiaries that are required to be described in the
Prospectuses or to be filed as exhibits to the Registration Statement
by the Act or the Exchange Act or the rules and regulations thereunder
which have not been described in all materials respects in the
Prospectuses or filed as exhibits to the Registration
Statement.
(xiv) All material agreements to which the Company or
any of its subsidiaries is a party and which are required to
be described in the Registration Statement or the
Prospectuses are described therein. The Company is not in
breach of or in violation under any of the material terms or
provisions of, or in default under, (i) any material
contract, indenture, mortgage, deed of trust, permit,
license, note agreement or other material agreement or
material instrument to which the Company is a party or by
which any of its properties are bound, (ii) its Restated
Certificate of Incorporation or Bylaws, or (iii) any order,
judgment, statute, rule or regulation of any court or
governmental, administrative or regulatory agency or body
having jurisdiction over the Company or any of its
properties, except as may be properly described in the
Prospectuses or such as individually or in the aggregate do
not now have and are not reasonably expected to have a
material adverse effect upon the condition (financial or
other), earnings, business or properties of the Company and
its subsidiaries, taken as a whole.
(xv) The Company has obtained the agreement of each
of the Company's directors and executive officers that such
persons will not, for a period of 120 days after the date of
the Prospectuses, offer to sell, contract to sell or
otherwise sell (including without limitation in a short
sale), grant any option to purchase, or dispose of any
shares of Common Stock of the Company, any options or
warrants to purchase any shares of Common Stock of the
Company, or any securities convertible into or exchangeable
for shares of Common Stock of the Company, without the prior
written consent of the Salomon Brothers Inc and Salomon
Brothers International Limited, as the case may be, except
the Company may issue securities pursuant to the Company's
retirement savings, stock option or other benefit or
incentive plans maintained for its officers, directors or
employees.
(xvi) The Company has not taken and will not take,
directly or indirectly, prior to the earlier of 90 days from
the date of this Agreement and the International
Underwriting Agreement and the termination of the
underwriting syndicate
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contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which caused
or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any
security of the Company.
(xvii) KPMG Peat Marwick LLP, who have certified
certain financial statements of the Company and its
subsidiaries, are independent public accountants as required
by the Act and the Exchange Act and the rules and
regulations of the Commission thereunder.
(xviii) Price Waterhouse, who have certified certain
financial statements of ATCOR and its subsidiaries, are
independent public accountants, as required by Canadian
securities legislation, the Act and the Exchange Act and the
rules and regulations of the Commission thereunder.
(xix) The consolidated financial statements of the
Company (including the related notes and supporting
schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectuses
present fairly in all material respects the condition
(financial or other) and results of operations of the
Company and its consolidated subsidiaries, at the dates and
for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved, except as set forth in the notes to such financial
statements and except to the extent that certain footnote
disclosures regarding the unaudited financial statements
have been omitted in accordance with the applicable rules of
the Commission. The amounts included in the Registration
Statement and the amounts in the Prospectuses under the
captions "Prospectus Summary -- Summary Financial and
Operating Data" and "Selected Financial and Operating Data"
fairly present, in all material respects, the information
shown therein and have been determined on a basis consistent
with the financial statements included in the Registration
Statement and the Prospectuses.
(xx) The Company effected a five to one reverse
stock split of its outstanding Common Stock on January 5,
1996; neither the Board of Directors of the Company (or any
committee thereof) nor any shareholder of the Company have
taken any action since such date, or to the knowledge of the
Company are contemplating taking any action, to rescind such
reverse stock split; and no legal, regulatory,
administrative
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or governmental action, suit or proceeding to which the Company
or any of its subsidiaries or any of their officers is a party is
pending, or to the knowledge of the Company threatened, which seeks
to rescind such reverse stock split.
(xxi) The Acquisition Agreement is in full force and
effect; and neither the Board of Directors of the Company
(or any committee thereof) nor any shareholder of the
Company has taken any action, or to the knowledge of the
Company is contemplating taking any action, to modify,
amend, supplement or rescind the Acquisition Agreement; all
of the conditions to consummating the Acquisition have been
satisfied or are reasonably expected by the Company to be
satisfied as of the Closing Date, and no event has occurred,
or to the knowledge of the Company is reasonably expected to
occur, which would prevent or delay the consummation of the
Acquisition immediately, or waive any provision thereof,
following the consummation of the sale of the U.S.
Underwritten Securities pursuant to this Agreement and the
International Underwritten Securities pursuant to the
International Underwriting Agreement.
(xxii) The agreement of The Anschutz Corporation
("Anschutz") to not transfer any of the shares of Common
Stock of the Company owned by it, except in certain limited
circumstances, for a period of nine months following the
Closing Date, is in full force and effect, and the Company
will not enter into any agreement to modify, amend,
supplement or rescind such agreement, or waive any provision
thereof, for a period of 180 days from the date of the
Prospectuses without the prior written consent of Salomon
Brothers Inc.
(xxiii) The agreement of Joint Energy Development
Investments Limited Partnership ("JEDI") to not transfer any
of the shares of Common Stock of the Company owned by it,
except in certain limited circumstances, described in the
Prospectuses, is in full force and effect, and the Company
will not enter into any agreement to modify, amend,
supplement or rescind such agreement, or waive any provision
thereof, for a period of 180 days from the date of the
Prospectuses without the prior written consent of Salomon
Brothers Inc.
(b) The Selling Stockholder represents and warrants
to, and agrees with each U.S. Underwriter that:
(i) The Selling Stockholder is the lawful owner of
the Securities to be sold by the Selling Stockholder
hereunder and under the International Underwriting Agreement
and upon
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sale and delivery of, and payment for, such Securities, as
provided herein, the Selling Stockholder will convey good
and marketable title to such Securities, free and clear of
all liens, encumbrances, equities and claims whatsoever.
(ii) The Selling Stockholder has not taken and will
not take, directly or indirectly, prior to the earlier of 90
days from the date of this Agreement and the International
Underwriting Agreement and the termination of the
underwriting syndicate contemplated by this Agreement and
the International Underwriting Agreement, any action
designed to or which has constituted or which might
reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(iii) Certificates in negotiable form for the Selling
Stockholder's Securities have been placed in custody, for
delivery pursuant to the terms of this Agreement and the
International Underwriting Agreement, under a Custody
Agreement duly authorized, executed and delivered by such
Selling Stockholder, in the form heretofore furnished to you
(the "Custody Agreement") with The Chase Manhattan Bank of
Canada, as custodian (the "Custodian"); the U.S. Securities
represented by the certificates so held in custody for the
Selling Stockholder are subject to the interest hereunder of
the U.S. Underwriters and the Company; the arrangements for
custody and delivery of such certificates, made by the
Selling Stockholder hereunder, under the International
Underwriting Agreement and under the Custody Agreement, are
not subject to termination by any acts of the Selling
Stockholder, or by operation of law or by the occurrence of
any other event; and if such event shall occur before the
delivery of such Securities hereunder or under the
International Underwriting Agreement, certificates for the
Securities will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement, the
International Underwriting Agreement and the Custody
Agreement as if such event had not occurred, regardless of
whether or not the Custodian shall have received notice of
such event.
(iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
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distribution of the Securities by the Underwriters and such
other approvals as have been obtained.
(v) Neither the sale of the Securities being sold
by the Selling Stockholder nor the consummation of any other
of the transactions herein contemplated, or contemplated by
the International Underwritng Agreement, by such Selling
Stockholder or the fulfillment of the terms hereof or of the
International Underwriting Agreement by such Selling
Stockholder will conflict with, result in a breach or
violation of, or constitute a default under any law or the
charter or by-laws of such Selling Stockholder or the terms
of any indenture or other agreement or instrument to which
such Selling Stockholder or any of its subsidiaries is a
party or bound, or any judgment, order or decree applicable
to such Selling Stockholder or any of its subsidiaries of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over
such Selling Stockholder or any of its subsidiaries.
2. PURCHASE AND SALE. Subject to the terms and conditions
and in reliance upon the representations and warranties herein
set forth:
(a) The Company and the Selling Stockholder agree to
sell to each U.S. Underwriter, and each U.S. Underwriter
agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $____ per share, the amount
of the U.S. Underwritten Securities set forth opposite such
U.S. Underwriter's name in Schedule I hereto.
(b) The Company hereby grants an option to the several
U.S. Underwriters to purchase, severally and not jointly, up
to 1,530,000 shares of the U.S. Option Securities at the
same purchase price per share as the U.S. Underwritten
Securities by the U.S. Underwriters. Said option may be
exercised in whole or in part at any time (but not more than
once), on or before the 30th day after the date of the U.S.
Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the number of
shares of the U.S. Option Securities as to which the several
U.S. Underwriters are exercising the option and the
settlement date. Delivery of certificates for the shares of
U.S. Option Securities by the Company, and payment therefor
to the Company, shall be made as provided in Section 3
hereof. The number of shares of the U.S. Option Securities
to be purchased by each U.S. Underwriter shall be the same
percentage of the total number of shares of the U.S. Option
Securities to be purchased by the
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several U.S. Underwriters as such U.S. Underwriter is purchasing
of the U.S. Underwritten Securities, subject to such adjustments
as you in your absolute discretion shall make to eliminate any
fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
U.S. Underwritten Securities shall be made at 9:00 AM, New York
City time, on January __, 1996, or such later date (not later
than ___, 1996) as the Representatives shall designate, which
date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the U.S.
Securities being herein called the "Closing Date"). Delivery of
the U.S. Underwritten Securities shall be made to the
Representatives from the respective accounts of the several U.S.
Underwriters against payment by the several U.S. Underwriters
through the Representatives of the purchase price thereof to or
upon the order of the Company and the Selling Stockholder by
certified or official bank check or checks drawn on or by a New
York Clearing House bank and payable in next day funds, or at the
option of the Company by wire transfer to accounts designated in
writing by the Company and the Selling Stockholder (as the case
may be) of immediately available funds; provided that, the
Company and the Selling Stockholder shall reimburse the U.S.
Underwriters by payment to the Representatives for the cost of
providing such immediately available funds (which reimbursement
shall be netted against the amounts payable to the Company and
the Selling Stockholder). Delivery of the U.S. Underwritten
Securities shall be made at such location as the Representatives
shall reasonably designate at least one business day in advance
of the Closing Date and payment for such U.S. Underwritten
Securities shall be made at the office of Xxxxxx Xxxxxx &
Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Certificates for
the U.S. Underwritten Securities shall be registered in such
names and in such denominations as the Representatives may
request not less than three full business days in advance of the
Closing Date.
The Company and Selling Stockholder agree to have the
U.S. Securities available for inspection, checking and packaging
by the Representatives in New York, New York, not later than 2:00
PM on the business day prior to the Closing Date.
The Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several
U.S. Underwriters of the U.S. Securities to be purchased by them
from the Selling Stockholder and the respective U.S. Underwriters
will pay any additional stock transfer taxes involved in further
transfers.
-15-
If the option provided for in Section 2(b) hereof is
exercised after the third business day prior to the Closing Date,
the Company will deliver (at the expense of the Company) to the
Representatives, at Seven World Trade Center, New York, New York,
on the date specified by the Representatives (which shall be
within four business days after exercise of said option),
certificates for the U.S. Option Securities in such names and
denominations as the Representatives shall have requested against
payment of the purchase price thereof to or upon the order of the
Company by certified or official bank check or checks drawn on or
by a New York Clearing House bank and payable in next day funds,
or by wire transfer of immediately available funds if so
requested by the Company provided that the Company reimburses the
U.S. Underwriters by payment to the Representatives for the cost
of providing such immediately available funds. If settlement for
the U.S. Option Securities occurs after the Closing Date, the
Company will deliver to the Representatives on the settlement
date for the U.S. Option Securities, and the obligation of the
Underwriters to purchase the U.S. Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6
hereof.
It is understood and agreed that the Closing Date shall
occur simultaneously with the "Closing Date" under the
International Underwriting Agreement.
4. OFFERING BY U.S. UNDERWRITERS. It is understood that
the several U.S. Underwriters propose to offer the U.S.
Securities for sale to the public as set forth in the U.S.
Prospectus.
5. AGREEMENTS.
(a) The Company agrees with the several U.S.
Underwriters and the Selling Stockholder that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution
Time, and any amendments thereof, to become effective.
Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration
Statement or supplement to the U.S. Prospectus without your
prior consent, which consent shall not be unreasonably
withheld. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the U.S. Prospectus is
otherwise required under Rule 424(b), the Company will cause
the U.S. Prospectus, properly completed, and any supplement
-16-
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
Representatives of such timely filing. The Company will
promptly advise the Representatives (A) when the
Registration Statement, if not effective at the Execution
Time, and any amendment thereto, shall have become
effective, (B) when the U.S. Prospectus, and any supplement
thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (C) when, prior to
termination of the offering of the U.S. Securities, any
amendment to the Registration Statement shall have been
filed or become effective, (D) of any request by the
Commission for any amendment of the Registration Statement
or supplement to the U.S. Prospectus or for any additional
information, (E) 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 (F) of the receipt by the
Company of any notification with respect to the suspension
of the qualification of the U.S. Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its
reasonable best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
U.S. Securities is required to be delivered under the Act,
any event occurs as a result of which the U.S. Prospectus as
then supplemented would include any untrue statement of a
material fact or omit to state any material fact 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 supplement the U.S. Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the
Company promptly will prepare and file with the Commission,
subject to the second sentence of paragraph (a)(i) of this
Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance.
(iii) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives an earnings statement or statements of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
-17-
(iv) The Company will furnish to the Representatives
and counsel for the U.S. Underwriters, without charge,
signed copies of the Registration Statement (including
exhibits thereto) and to each other U.S. Underwriter a copy
of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the Act, as many copies of each
U.S. Preliminary Prospectus and any supplement thereto as
the Representatives may reasonably request. The Company
will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Company will arrange for the qualification of
the Securities for sale under the laws of such jurisdictions
as the Representatives may designate and will maintain such
qualifications in effect so long as required for the
distribution of the Securities; PROVIDED, HOWEVER, that the
Company shall not be required to qualify to do business in
any jurisdiction where it is not now qualified or to file a
general consent to service of process in any jurisdiction.
The Company will pay the fee of the NASD in connection with
its review of the offering.
(vi) The Company will not, for a period of 120 days
following the Execution Time, without the prior written
consent of Salomon Brothers Inc and Salomon Brothers
International Limited, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce
the offering of, any other shares of Common Sock or any
securities convertible into, or exchangeable for, shares of
Common Stock; PROVIDED, HOWEVER, that the Company may issue
securities (A) pursuant to any stock option, retirement, savings
or other benefit or incentive plans maintained for the
Company's officers, directors or employees, in effect at the
Execution Time and (B) for the payment of regular dividends
in the Company's $.75 Convertible Preferred Stock.
(vii) The Company confirms as of the date hereof that it
is in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF
DOING BUSINESS WITH CUBA, and the Company further agrees
that if it commences engaging in business with the
government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in
the Prospectuses, if any, concerning the Company's business
with Cuba or with any
-18-
person or affiliate located in Cuba
changes in any material way, the Company will provide the
Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(b) Each U.S Underwriter agrees that (i) it is not
purchasing any of the U.S. Securities for the account of any non-
United States or Canadian Person, (ii) it has not offered or
sold, and will not offer or sell, directly or indirectly, any of
the U.S. Securities or distribute any U.S. Prospectus to any
person outside the United States or Canada, or to any non-United
States or Canadian Person, and (iii) any dealer to whom it may
sell any of the U.S. Securities will represent that it is not
purchasing for the account of any non-United States or Canadian
Person and agree that it will not offer or resell, directly or
indirectly, any of the U.S. Securities outside the United States
or Canada, or to any non-United States or Canadian Person or to
any other dealer who does not so represent and agree; PROVIDED,
HOWEVER, that the foregoing shall not restrict (A) purchases and
sales between the U.S. Underwriters on the one hand and the
International Underwriters on the other hand pursuant to the
Agreement Between U.S. Underwriters and International
Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International
Underwriters, conducted through Salomon Brothers Inc (or through
the Representatives and International Representatives) as part of
the distribution of the Securities, and (C) sales to or through
(or distributions of U.S. Prospectuses or U.S. Preliminary
Prospectuses to) United States or Canadian Persons who are
investment advisors, or who otherwise exercise investment
discretion, and who are purchasing for the account of any non-
United States or Canadian Person.
(c) The agreements of the U.S. Underwriters set forth
in paragraph (b) of this Section 5 shall terminate upon the
earlier of the following events:
(i) a mutual agreement of the Representatives and the
International Representatives to terminate the selling
restrictions set forth in paragraph (b) of this Section 5
and Section 5(b) of the International Underwriting
Agreement; or
(ii) the expiration of a period of 30 days after the
Closing Date, unless (A) the International Representatives
shall have given notice to the Company and the
Representatives that the distribution of the International
Securities by the International Underwriters has not yet
been completed, or (B) the Representatives shall have given
notice to the Company and the International Representatives
that the distribution of the
-19-
U.S. Securities by the U.S.
Underwriters has not yet been completed. If such notice by
the Representatives or the International Representatives is
given, the agreements set forth in such paragraph (b) shall
survive until the earlier of (1) the event referred to in
clause (i) of this subsection (c) or (2) the expiration of
an additional period of 30 days from the date of any such
notice.
6. CONDITIONS TO THE OBLIGATIONS OF THE U.S.
UNDERWRITERS. The obligations of the U.S. Underwriters to
purchase the U.S. Underwritten Securities and the U.S. Option
Securities shall be subject to the accuracy of the
representations and warranties on the part of the Company and the
Selling Stockholder contained herein as of the Execution Time,
the Closing Date and any settlement date pursuant to Section 3
hereof, 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 their obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the
Registration Statement will become effective not later than
(i) 6:00 P.M New York City time on the date of determination
of the public offering price, if such determination occurred
at or prior to 3:00 P.M. New York City time on such date or
(ii) 12:00 Noon on the business day immediately following
the day on which the pubic offering price was determined, if
such determination occurred after 3:00 P.M. New York City
time on such date; if filing of the Prospectuses, or any
supplement thereto, is required pursuant to Rule 424(b), the
Prospectuses, and any such supplement, will be filed in the
manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the
Representatives the opinion of Xxxxxx X. XxXxxxxx, Esq.,
Corporate Counsel and Secretary for the Company, dated the
Closing Date, to the effect that:
(i) each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction in which
it is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as
-20-
described in the Prospectuses, and is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which its ownership
or leasing of its material properties or its conduct of its
material business makes such qualification necessary, except
to the extent the failure, individually or in the aggregate,
to be so qualified or in good standing could have a material
adverse effect on the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of
the subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectuses, all outstanding
shares of capital stock of the subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and, to
the knowledge of such counsel, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is
as set forth in the Prospectuses; the capital stock of the
Company conforms to the description thereof contained in the
Prospectuses; all of the outstanding shares of capital stock
(including the Securities being sold hereunder by the
Selling Stockholder) have been duly authorized and validly
issued and are fully paid and nonassessable and were not
issued in violation of or subject to any preemptive or other
rights to subscribe for the capital stock; the Securities
have been duly authorized, and, when issued and delivered to
and paid for by the U.S. Underwriters pursuant to this
Agreement and the International Underwriters pursuant to the
International Underwriting Agreement, will be validly
issued, fully paid and nonassessable; based upon information
provided by the NASD and assuming the Securities are sold in
the manner described in the Registration Statement, the
Securities are duly authorized for quotation on the Nasdaq
National Market; the certificates for the Securities are in
valid and sufficient form; and, except as otherwise set
forth in the Prospectuses, the holders of outstanding shares
of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities;
(iv) to the best knowledge of such counsel, 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 its subsidiaries
of
-21-
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the
Prospectuses, and there is no contract, agreement, lease,
instrument, license or other document of a character
required to be described in the Registration Statement or
Prospectuses, or to be filed as an exhibit, which is not
described or filed as required; and the statements in the
Prospectuses under the headings "Business and Properties --
Legal Proceedings" fairly summarize the matters therein
described;
(v) such counsel has no reason to believe that, at
the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectuses include any untrue statement of a material fact
or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(vi) this Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered
by the Company;
(vii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein and by
the International Underwriting Agreement and the
distribution of the Securities by the U.S. Underwriters and
the International Underwriters, except such as have been
obtained under the Act and such as may be required under the
blue sky or foreign laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
U.S. Underwriters and International Underwriters, and by the
NASD, and such other approvals (specified in such opinion)
as have been obtained;
(viii) neither the issuance, sale or delivery of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof or of the International Underwriting Agreement
will conflict with, result in a breach or violation of, or
constitute a default under any law, rule or regulation
(except that such counsel need not express any opinion with
respect to any federal or state securities laws) or the
Restated Certificate of Incorporation or Bylaws of the
Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company or
any of its
-22-
subsidiaries is a party or bound or any judgment,
order, or decree known to such counsel to be applicable to
the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of
its subsidiaries; and
(ix) other than the Selling Stockholder, Anschutz and
JEDI, no holders of securities of the Company have rights to
the registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of the laws of Alberta, Canada,
to the extent he deems proper and specified in such opinion, upon
the opinion of Canadian counsel of good standing whom he believes
to be reliable and who is satisfactory to counsel for the U.S.
Underwriters and (B) as to matters of fact, to the extent he
deems proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectuses in
this paragraph (b) include any supplements thereto at the Closing
Date.
(c) The Company shall have furnished to the
Representatives the opinion of Xxxxxx & Xxxxxx L.L.P.,
counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Registration Statement has become
effective under the Act; any required filing of the
Prospectuses, 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
the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the
Registration Statement and the Prospectuses (other
than the financial statements and other financial
and statistical information contained therein as to
which such counsel need express no opinion) comply
as to form in all material respects with the
applicable requirements of Form S-2, the Act and the
Exchange Act and the respective rules and
regulations thereunder; and such counsel has no
reason to believe that, at the Effective Date, the
Registration Statement contained any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading or that the Prospectuses include any
untrue statement of a material fact or omits to
state a
-23-
material fact necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading;
(ii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein and by the International
Underwriting Agreement, except such as have been
obtained under the Act and such as may be required
under the blue sky or foreign laws of any
jurisdiction in connection with the purchase and
distribution of the Securities by the U.S.
Underwriters and the International Underwriters, and
by the NASD, and such other approvals (specified in
such opinion) as have been obtained; and
(iii) neither the issuance, sale or delivery of
the Securities, nor the consummation of any other of
the transactions herein contemplated nor the
fulfillment of the terms hereof or by the
International Underwriting Agreement will conflict
with, result in a breach or violation of, or
constitute a default under any law, rule or
regulation (except that such counsel need not
express any opinion with respect to any federal or
state securities laws) or the Restated Certificate
of Incorporation or Bylaws of the Company or the
terms of any indenture or other agreement or
instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or
bound or any judgment, order or decree known to such
counsel to be applicable to the Company or any of
its subsidiaries of any court, regulatory body,
administrative agency, governmental body or
arbitrator having jurisdiction over the Company or
any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of Texas or the United States, to the extent
they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the U.S.
Underwriters and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the
Company and public officials. References to the prospectus in
this paragraph (c) include any supplements thereto at the Closing
Date.
-24-
(d) The Representatives shall have received from
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the U.S. Underwriters,
such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the U.S. Securities, the
Registration Statement, the U.S. Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the
Chairman of the Board or the President and the principal
financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration
Statement, the Prospectuses, any supplement to the
Prospectuses and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects 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 on its part to be
performed or satisfied at or prior to the Closing Date
pursuant to this Agreement;
(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 Prospectuses (exclusive of
any supplement thereto), there has been no material
adverse change in the condition (financial or other),
earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in
the Prospectuses (exclusive of any supplement
thereto).
(f) At the Execution Time and at the Closing Date,
KPMG Peat Marwick LLP shall have furnished to the
Representatives a letter or letters, dated respectively as
of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives.
-25-
(g) At the Execution Time and at the Closing Date,
Price Waterhouse shall have furnished to the Representatives
a letter or letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance
satisfactory to the Representatives.
(h) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof)
and the Prospectuses (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraphs
(f) and (g) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting
the business or properties of the Company and its
subsidiaries and ATCOR, taken as a whole, the effect of
which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectuses (exclusive of any
supplement thereto).
(i) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in
the form of Exhibit A hereto from each executive officer and
director of the Company addressed to the Representatives, 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 120 days following the Execution Time
without the prior consent of Salomon Brothers Inc and
Salomon Brothers International Limited, other than shares of
Common Stock disposed of as bona fide gifts or by act of
law.
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may
reasonably request.
(k) The Selling Stockholder shall have furnished to
the Representatives the opinion of XxXxxxxx Xxxxxxxx,
counsel for the Selling Stockholder, dated the Closing Date,
to the effect that:
(i) this Agreement, the International
Underwriting Agreement, the Custody Agreement and the
Power of
-26-
Attorney executed by the Selling Stockholder
have been duly authorized, executed and delivered by
the Selling Stockholder; this Agreement, the
International Underwriting Agreement and the Custody
Agreement are valid and binding on the Selling
Stockholder; and the Selling Stockholder has full legal
right and authority to sell, transfer and deliver in
the manner provided in this Agreement, the
International Underwriting Agreement and the Custody
Agreement the Securities being sold by the Selling
Stockholder hereunder and under the International
Underwriting Agreement;
(ii) the delivery by the Selling Stockholder to
the several U.S. Underwriters and International
Underwriters of certificates for the Securities being
sold hereunder and under the International Underwriting
Agreement by the Selling Stockholder against payment
therefor as provided herein and therein, will pass good
and marketable title to such Securities to the several
U.S. Underwriters and International Underwriters, free
and clear of all liens, encumbrances, equities and
claims whatsoever;
(iii) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation by the Selling Stockholder of the
transactions contemplated herein and by the
International Underwriting Agreement, except such as
may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Securities by the U.S. Underwriters and International
Underwriters, and by the NASD, and such other approvals
(specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being
sold by the Selling Stockholder nor the consummation of
any other of the transactions herein contemplated, or
by the International Underwriting Agreement, by the
Selling Stockholder or the fulfillment of the terms
hereof, or of the International Underwriting Agreement,
by the Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default
under any law or the charter or By-laws of the Selling
Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel and to
which the Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgment,
order or decree known to such counsel to be applicable
to the Selling Stockholder or
-27-
any of its subsidiaries of any court, regulatory body
administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder or any of its
subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the Province of Alberta or Canada, to the extent they
deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the U.S. Underwriters,
and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Selling Stockholder
and public officials.
(l) The Selling Stockholder shall have furnished to
the Representatives a certificate, signed by the Chairman of
the Board or the President and the principal financial or
accounting officer of the Selling Stockholder, dated the
Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration
Statement, the Prospectuses, any supplement to the
Prospectuses and this Agreement and that the representations
and warranties of the Selling Stockholder in this Agreement
are true and correct in all material respects on and as of
Closing Date to the same effect as if made on the Closing
Date.
(m) Other than the payment of the purchase price, all
of the conditions to consummating the Acquisition have been
satisfied as of the Closing Date.
(n) The closing of the purchase of the International
Securities to be issued and sold by the Company and the
Selling Stockholder pursuant to the International
Underwriting Agreement shall occur concurrently with the
closing described herein.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the U.S.
Underwriters, this Agreement and all obligations of the U.S.
Underwriters hereunder may be canceled at, or at any time prior
to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Secretary of the Company and
the
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Selling Stockholder in writing or by telephone or telegraph
confirmed in writing.
7. REIMBURSEMENT OF U.S. UNDERWRITERS' EXPENSES. If
the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the U.S. Underwriters
set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or the
Selling Stockholder to perform any agreement herein or comply
with any provision hereof other than by reason of a default by
any of the U.S. Underwriters, the Company will reimburse the U.S.
Underwriters severally upon demand for all reasonable out-of-
pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with
the proposed purchase and sale of the Securities. If the Company
is required to make any payments to the U.S. Underwriters under
this Section 7 because of the Selling Stockholder's refusal,
inability or failure to satisfy any condition to the obligations
of the U.S. Underwriters set forth in Section 6, the Selling
Stockholder shall reimburse the Company on demand for all amounts
so paid.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Selling Stockholder jointly
and severally agree to indemnify and hold harmless each U.S.
Underwriter, the directors, officers, employees and agents
of each U.S. Underwriter and each person who controls any
U.S. Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any U.S.
or International Preliminary Prospectus or in either of the
Prospectuses, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; PROVIDED,
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that the Selling Stockholder shall not be responsible pursuant to
this indemnity for losses, claims, damages or liabilities arising out
of or based upon any such untrue statement or omission or
allegation thereof based upon information furnished by any
party other than the Selling Stockholder or for an amount in
excess of the proceeds to such Selling Stockholder from the
sale of the U.S. or International Underwritten Securities
sold by it; PROVIDED, HOWEVER, that the Company and the
Selling Stockholder will not be liable in any such case to
the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
U.S. Underwriter through the Representatives specifically
for inclusion therein; and PROVIDED, FURTHER, that such
indemnity with respect to any preliminary prospectus shall
not inure to the benefit of the U.S. Underwriter (or any
person controlling the U.S. Underwriter) from whom the
person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if
such person did not receive a copy of the U.S. Prospectus
(or the U.S. Prospectus as amended and supplemented) at or
prior to the confirmation of the sale of such U.S.
Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of
a material fact contained in such preliminary prospectus was
corrected in the U.S. Prospectus (or the U.S. Prospectus as
amended or supplemented) provided that the Company shall
have delivered the U.S. Prospectus, as amended or
supplemented, to the Representatives on a timely basis to
permit such delivery. This indemnity agreement will be in
addition to any liability which the Company or the Selling
Stockholder may otherwise have.
(b) Each U.S. Underwriter severally agrees to
indemnify and hold harmless the Company, the Selling
Stockholder, each of the Company's directors, each of the
Company's officers who signs the Registration Statement, and
each person who controls the Company within the meaning of
either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company and the Selling
Stockholder to each U.S. Underwriter, but only with
reference to written information relating to such U.S.
Underwriter furnished to the Company by or on behalf of such
U.S. Underwriter through the Representatives specifically
for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to
any liability which any U.S.
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Underwriter may otherwise have. The Company and the Selling Stockholder
acknowledge that the statements set forth in the last paragraph of
the cover page, the first and second paragraphs set forth on the
inside front cover page and under the heading "Underwriting"
in any U.S. or International Preliminary Prospectus and the
Prospectuses constitute the only information furnished in
writing by or on behalf of the several U.S. Underwriters for
inclusion in any U.S. or International Preliminary
Prospectus or the Prospectuses, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory
to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or
additional to those
-31-
available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party.
An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an
unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and the Selling Stockholder, jointly and
severally, and the U.S. Underwriters agree to contribute to
the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating or defending same)
(collectively "Losses") to which the Company, the Selling
Stockholder and one or more of the U.S. Underwriters may be
subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling
Stockholder on the one hand and by the U.S. Underwriters on
the other from the offering of the Securities; PROVIDED,
HOWEVER, that in no case shall any U.S. Underwriter (except
as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such
U.S. Underwriter hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any
reason, the Company and the Selling Stockholder, jointly and
severally, and the U.S. Underwriters shall contribute in
such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company
and the Selling Stockholder on the one hand and of the U.S.
Underwriters on the other in connection with the statements
or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received
by the Company and the Selling Stockholder shall be deemed
to be equal to the total net proceeds from the
-32-
offering (after deducting expenses), and benefits received by the
U.S. Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set
forth on the cover page of the U.S. Prospectus. Relative
fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the Company, the Selling Stockholder or the U.S.
Underwriters. The Company, the Selling Stockholder and the
U.S. Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not
take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph
(d), 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. For purposes of this
Section 8, each person who controls an U.S. Underwriter
within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an U.S.
Underwriter shall have the same rights to contribution as
such U.S. Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company
shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions
of this paragraph (d).
9. DEFAULT BY A U.S. UNDERWRITER. If any one or more
U.S. Underwriters shall fail to purchase and pay for any of the
U.S. Securities agreed to be purchased by such U.S. Underwriter
or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
obligations under this Agreement, the remaining U.S. Underwriters
shall be obligated severally to take up and pay for (in the
respective proportions which the amount of U.S. Securities set
forth opposite their names in Schedule I hereto bears to the
aggregate amount of U.S. Securities set forth opposite the names
of all the remaining U.S. Underwriters) the U.S. Securities which
the defaulting U.S. Underwriter or Underwriters agreed but failed
to purchase; PROVIDED, HOWEVER, that in the event that the
aggregate amount of U.S. Securities which the defaulting U.S.
Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of U.S. Securities set forth
in Schedule I hereto, the remaining U.S. Underwriters shall have
the right to purchase all, but shall not be under any obligation
to purchase any, of the U.S. Securities, and if such non-
defaulting U.S. Underwriters do not purchase all the U.S.
Securities, this Agreement will terminate
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without liability to any non-defaulting U.S. Underwriter, the Selling
Stockholder or the Company. In the event of a default by any U.S.
Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required
changes in the Registration Statement and the U.S. Prospectus or
in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting U.S.
Underwriter of its liability, if any, to the Company, the Selling
Stockholder and any non-defaulting U.S. Underwriter for damages
occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by
notice given to the Company prior to delivery of and payment for
the U.S. Securities, if prior to such time (i) trading in the
Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices
shall have been established on the New York Stock Exchange or the
the Nasdaq National Market, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the
U.S. Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers, of the
Selling Stockholder and of the U.S. Underwriters set forth in or
made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of
any U.S. Underwriter, the Selling Stockholder or the Company or
any of the officers, directors or controlling persons referred to
in Section 8 hereof, and will survive delivery of and payment for
the U.S. Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telegraphed and
confirmed to them, care of Salomon Brothers Inc, at Xxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, if sent to the
Company,
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will be mailed, delivered, or telegraphed and confirmed
to it at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. XxXxxxxx, Esq.; or if sent to the Selling
Stockholder, will be mailed, delivered, or telegraphed and
confirmed to it at 1700, 000 0xx Xxxxxx XX, Xxxxxxx, Xxxxxxx
X0X 0X0, Xxxxxx, Attention: Xx. Xxxxxxx Brebber.
13. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York, without regard to the principles of conflicts of laws.
15. COUNTERPARTS. This Agreement may be executed in
more than one counterpart each of which shall be deemed an
original and each of which shall constitute one and the same
instrument.
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If the foregoing is in accordance with your
understanding of our agreement, please sign and send us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company,
the Selling Stockholder and the several U.S. Underwriters.
Very truly yours,
FOREST OIL CORPORATION
By: ------------------------------------
Name:
Title:
SAXON PETROLEUM INC.
the Selling Stockholder
By: ------------------------------------
Name:
Title: Attorney-in-Fact
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
SALOMON BROTHERS INC
XXXXXX, READ & CO. INC.
XXXXXX XXXXXXX & CO. INCORPORATED
CHASE SECURITIES, INC.
By: Salomon Brothers Inc
By: -------------------------------
For themselves and the other
several U.S. Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
NUMBER OF SHARES
OF U.S.
UNDERWRITTEN
SECURITIES TO BE
U.S. UNDERWRITERS PURCHASED
------------------ ---------------------
Salomon Brothers Inc . . . . . . . . . .
Xxxxxx, Read & Co. Inc. . . . . . . . .
Xxxxxx Xxxxxxx & Co. Incorporated . . .
Chase Securities, Inc. . . . . . . . . .
----------
Total . . . . . . . 10,200,000
----------
SCHEDULE II
SUBSIDIARIES OF FOREST OIL CORPORATION
DELAWARE SUBSIDIARIES
Forest I Development Company (2)
Forest Merger Corporation
Forest Oil of Turkey, Ltd.
Forest Pipeline Company
CANADA SUBSIDIARIES
Forest Canada I Development Ltd.
Forest Oil of Canada, Ltd.
Effective December 20, 1995, Forest Oil Corporation acquired a
49% voting interest in Saxon Petroleum Inc., an Alberta
corporation.
Effective December 15, 1995, Forest Oil Corporation incorporated
3189490 Canada Ltd., a Canadian corporation.
--------------
(2) Oklatex Corp. (a Texas corporation) is a wholly owned subsidiary of
Forest I Development Company.
EXHIBIT A
Letterhead of officer or director of
Forest Oil Corporation
FOREST OIL CORPORATION
PUBLIC OFFERING OF COMMON STOCK
January __, 1996
Salomon Brothers Inc
Xxxxxx, Read & Co. Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
As Representatives of the several U.S. Underwriters
and
Salomon Brothers International Limited
Xxxxxx, Read & Co. Inc.
Xxxxxx Xxxxxxx & Co. International Limited
As International Representatives of the several
International Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection
with the proposed U.S. Underwriting Agreement (the "U.S.
Underwriting Agreement") and International Underwriting Agreement
(together with the U.S. Underwriting Agreement the "Underwriting
Agreements"), between Forest Oil Corporation, a New York
corporation (the "Company"), a certain Selling Stockholder named
therein and each of you as respective representatives of a group
of U.S. Underwriters and International Underwriters, as the case
may be, named therein (collectively, the "Underwriters"),
relating to an underwritten public offering of Common Stock, $.10
par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to
enter into the Underwriting Agreements, the undersigned 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 the undersigned or any
securities convertible into, or exchangeable for, shares of
Common Stock for a period of 120 days following the day on which
the Underwriting Agreements are executed without the prior
consent of Salomon Brothers Inc and Salomon Brothers
International Limited,
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other than shares of Common Stock disposed of as bona fide gifts or by act of
law.
If for any reason the Underwriting Agreements shall be
terminated prior to the Closing Date (as defined in the
Underwriting Agreements), the agreement set forth above shall
likewise be terminated.
Sincerely,
_________________________________
Name:
Title:
Address:
