SHARES NATURAL GAS SERVICES GROUP, INC. COMMON STOCK UNDERWRITING AGREEMENT
Exhibit 1.1
___________ SHARES
NATURAL GAS SERVICES GROUP, INC.
COMMON STOCK
_____________, 2006
____________, 2006
XXXXXX XXXXXX & COMPANY, INC.
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTION
Natural Gas Services Group, Inc., a Colorado corporation (the “Company”), proposes to issue
and sell to Xxxxxx Xxxxxx & Company, Inc. (the “Underwriter”) an aggregate of ___shares
(the “Primary Firm Shares”) of Common Stock of the Company, par value $0.01 per share (the “Common
Stock”), and the stockholders of the Company named on Exhibit A (each, a “Selling Stockholder” and,
collectively, the “Selling Stockholders”) propose severally to sell to the Underwriter an aggregate
of ___shares of Common Stock (the “Secondary Shares”).
In addition, the Company has granted an option, exercisable for 30 days from and after the
date hereof, to the Underwriter to purchase up to an additional ___shares of Common Stock,
as provided in Section 3(c) (the “Overallotment Shares”). The Primary Firm Shares and, if and to
the extent such option is exercised, the Overallotment Shares are collectively called the “Primary
Shares,” and the Primary Shares and the Secondary Shares are collectively called the “Shares.” The
Primary Firm Shares and the Secondary Shares are collectively called the “Firm Shares.”
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-1 (File No. 333-130879). Such registration
statement, as amended, including the financial statements, exhibits and schedules thereto, in the
form in which it was declared effective by the Commission under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”),
including any information deemed to be a part thereof at the time of effectiveness pursuant to Rule
430A under the Securities Act, is called the “Registration Statement.” Any registration statement
filed pursuant to Rule 462(b) under the Securities Act shall be referred to herein as the “Rule
462(b) Registration Statement,” and the term “Registration Statement” as used herein for all
purposes other than as set forth in Section 1(a) hereof shall include any Rule 462(b) Registration
Statement filed with the Commission. The preliminary prospectus dated February ___, 2006 included
in the Registration Statement is referred to herein as the “Preliminary Prospectus,” and the final
prospectus relating to the Shares that is first filed pursuant to Rule 424(b) after the date and
time of the execution and delivery of this Agreement by the parties hereto is referred to herein as
the “Prospectus.” All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus, the Prospectus or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”).
The Company and the Selling Stockholders hereby confirm their agreements with the Underwriter
as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Underwriter as follows:
(a) Compliance with Registration Requirements.
The Registration Statement and, if applicable, any Rule 462(b) Registration Statement have
become effective under the Securities Act. The Company has complied with all requests of the
Commission for additional or supplemental information. No stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated or threatened by the Commission.
The Preliminary Prospectus, as of its date and as of [___] [a.m.][p.m.], Central time, on
the date of this Agreement (the “Time of Sale”), and the Prospectus, when first filed pursuant to
Rule 424(b) under the Securities Act, on the First Closing Date and on any Option Closing Date
(each as defined below), complied, and will comply, in all material respects with the Securities
Act and, if filed by electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was or will be identical to the copy thereof delivered to
the Underwriter for use in connection with the offer and sale of the Shares. The Registration
Statement and any Rule 462(b) Registration Statement, at the time it became effective and as of the
First Closing Date and any Option Closing Date, complied and will comply in all material respects
with the Securities Act and 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 to make the statements
therein not misleading. The Preliminary Prospectus, as of its date and as of the Time of Sale, did
not contain 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, except that the Preliminary Prospectus excludes information relating to the public
offering price of the Shares and underwriting discounts and other disclosures directly relating
thereto that will be included in the Prospectus. The Prospectus and any amendment or supplement
thereto, as of its date and as of the First Closing Date and any Option Closing Date, did not and
will not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the three immediately
preceding sentences do not apply to statements in or omissions from the Registration Statement, the
Preliminary Prospectus or the Prospectus or any amendments or supplements thereto made in reliance
upon and in conformity with information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein, it being understood and agreed that the only
such information furnished by the Underwriter consists of the information described as such in
Section 9(c) hereof. There are no contracts or other documents required to be disclosed in the
Preliminary Prospectus or in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been disclosed or filed as required.
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(b) Registration Statement Furnished to Underwriter.
The Company has delivered to the Underwriter one conformed copy of the Registration Statement
and each amendment thereto.
(c) Distribution of Offering Material By the Company.
The Company has not distributed and will not distribute, prior to the completion of the
Underwriter’s distribution of the Shares, any written offering material, including without
limitation any free writing prospectus (as defined in Rule 405 under the Securities Act), in
connection with the offering and sale of the Shares other than the Preliminary Prospectus, the
Prospectus or the Registration Statement.
(d) The Underwriting Agreement.
This Agreement has been duly authorized, executed and delivered by the Company and constitutes
the valid and binding agreement of the Company, enforceable against the Company in accordance with
its terms.
(e) Authorization of the Shares.
The Primary Shares have been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and delivered by the Company against payment therefor pursuant to this Agreement,
will be validly issued, fully paid and nonassessable. The Secondary Shares have been duly
authorized and validly issued and are fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights.
No persons possess registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering contemplated by
this Agreement, except for such rights as have been duly waived.
(g) No Material Adverse Change.
Except as otherwise disclosed in the Preliminary Prospectus and in the Prospectus, subsequent
to December 31, 2004: (i) there has been no material adverse change in or effect on, or any
development that would reasonably be expected to result in a material adverse change in or effect
on, the condition, financial or otherwise, or the earnings, business, operations or business
prospects, whether or not arising from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any such change or effect is called a
“Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have
not incurred any material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business or entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the Company or other
subsidiaries of the Company, any of its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of capital stock.
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(h) Independent Accountants.
Xxxx & Associates LLP, who has expressed its opinion with respect to certain financial
statements (which term as used in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement and included in the
Preliminary Prospectus and in the Prospectus, is an independent registered public accounting firm
as required by the Securities Act.
(i) Preparation of the Financial Statements.
The historical financial statements of the Company included in the Preliminary Prospectus and
in the Prospectus present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries at the dates indicated and the consolidated results of their
operations, cash flows and changes in stockholders’ equity for the periods specified. The
supporting schedules included in the Registration Statement present fairly the information required
to be stated therein. Such financial statements and supporting schedules have been prepared in
conformity with generally accepted accounting principles applied on a consistent basis throughout
the periods involved, except as may be expressly stated in the related notes thereto. The
historical financial statements of Screw Compression Systems, Inc., (“SCS”) included in the
Preliminary Prospectus and in the Prospectus present fairly in all material respects the
consolidated financial position of such entity at the dates indicated and the results of its
operations, cash flows and changes in stockholders’ equity for the periods specified, and such
financial statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, expect as may be expressly stated in
the related notes thereto. No other financial statements or supporting schedules are required to
be included in the Registration Statement. The pro forma financial statements and the related
notes thereto, and the other pro forma financial information, included in the Preliminary
Prospectus and in the Prospectus and in the Registration Statement present fairly the information
shown therein, have been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the bases described
therein, in all material respects, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The other financial and statistical information and data
included in the Preliminary Prospectus and in the Prospectus and in the Registration Statement are,
in all material respects, accurately presented and prepared on a basis consistent with the
applicable financial statements and the books and records of the Company and its subsidiaries.
(j) Incorporation and Good Standing of the Company and its Subsidiaries.
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 of its incorporation and has
corporate power and authority to own, lease and operate its properties and to conduct its business
as described in the Preliminary Prospectus and in the Prospectus and, in the case of the Company,
to enter into and perform its obligations under this Agreement. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the ownership or lease of property or the conduct of its
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business requires such qualification, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate, result in a Material
Adverse Change. Except as is disclosed in the Preliminary Prospectus and in the Prospectus, all of
the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the Company, directly or
through one or more of its subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim. The Company does not own or control, directly or indirectly, any
interest in any corporation, association or other entity other than SCS.
(k) Capitalization and Other Capital Stock Matters.
As of the date hereof, the authorized, issued and outstanding capital stock of the Company is
as set forth in the Preliminary Prospectus and in the Prospectus in the column entitled “Actual”
under the caption “Capitalization” (except for issuances subsequent to December 31, 2005, if any,
pursuant to this Agreement or pursuant to reservations, agreements or employee benefit plans
referred to in the Preliminary Prospectus and in the Prospectus or pursuant to the exercise of
convertible securities, warrants or options referred to in the Preliminary Prospectus and in the
Prospectus). The Common Stock (including the Shares) conforms in all material respects to the
description thereof contained in the Preliminary Prospectus and in the Prospectus. All of the
issued and outstanding shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance in all material respects with
federal and state securities laws. None of the outstanding shares of Common Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital stock of the Company or
any capital stock, partnership interests or membership interests of any of its subsidiaries other
than those disclosed in the Preliminary Prospectus and in the Prospectus.
(l) American Stock Exchange Listing.
The Company has filed with the American Stock Exchange an Additional Listing Application with
respect to the Primary Shares and has been notified by the American Stock Exchange that the Primary
Shares have been approved for listing on the American Stock Exchange, subject only to notice of
issuance. The Company has not been informed of any withdrawal, revocation, cancellation or
conditioning of such listing.
(m) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required.
Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws, and
none of the Company and its subsidiaries is in default (or, with the giving of notice or lapse of
time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
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subject (each, an “Existing Instrument”), except for such Defaults as would not, individually
or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated hereby and by the
Preliminary Prospectus and the Prospectus (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the charter or by-laws of the
Company or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default under,
or result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument, and (iii) will not result in any violation of any applicable
law, administrative regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Preliminary Prospectus and the Prospectus, except such as (i) have
been obtained or made by the Company and are in full force and effect under the Securities Act, and
(ii) may be required by applicable state securities or blue sky laws and from the National
Association of Securities Dealers, Inc. (the “NASD”).
(n) No Material Actions or Proceedings.
Except as disclosed in the Preliminary Prospectus and in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened (i)
against or affecting the Company or any of its subsidiaries or (ii) which has as the subject
thereof property owned or leased by, the Company or any of its subsidiaries, where in any such case
(A) there is a reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated by this Agreement. No labor
dispute with the employees of the Company or any of its subsidiaries exists or, to the Company’s
knowledge, is threatened or imminent which, if determined adversely to the Company would reasonably
be expected to result in a Material Adverse Change.
(o) Intellectual Property Rights.
The Company and its subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as
described in the Preliminary Prospectus and in the Prospectus; and the expected expiration of any
of such Intellectual Property Rights if not renewed or replaced would not result in a Material
Adverse Change. Neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted Intellectual Property Rights of others, which infringement
or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Change.
To the Company’s knowledge, none of the technology employed by the Company and/or any of its
subsidiaries has been obtained or is being used by the Company and/or any of its subsidiaries in
violation of any contractual obligation binding on the Company, any of its subsidiaries or any of
their officers, directors or employees or otherwise in violation of the rights of any persons.
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(p) All Necessary Permits, etc.
Except as disclosed in the Preliminary Prospectus and in the Prospectus, the Company and/or a
subsidiary possess such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses as currently conducted, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singularly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a
Material Adverse Change.
(q) Title to Properties.
Except as disclosed in the Preliminary Prospectus and in the Prospectus, the Company and each
of its subsidiaries have good and marketable title to all the properties and assets owned by them,
in each case free and clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except (i) such as would not materially and adversely affect the value of
such property and (ii) such as would not materially interfere with the current use of such property
by the Company or such subsidiary, as the case may be. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as would not materially interfere with the current use of
such real property, improvements, equipment or personal property by the Company or such subsidiary,
as the case may be.
(r) Tax Law Compliance.
The Company and each of its subsidiaries have accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by it and have paid or
made provision for the payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes, fines, penalties, and all taxes which the
Company and each of its subsidiaries is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax returns (whether or
not such amounts are shown as due on any tax return), except, in all cases, for any such tax,
assessment or similar charge that the Company is contesting in good faith and except in any case in
which the failure to so file or pay would not in the aggregate result in a Material Adverse Change.
The Company has made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(i) above in respect of all federal, state and foreign income
and franchise taxes for all periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined, except where failure to make such charges, accruals
and reserves would not result in a Material Adverse Change. No deficiency assessment with respect
to a proposed adjustment of the Company’s or any of its subsidiaries’ federal, state, or other
taxes is pending or, to the best of the Company’s knowledge, threatened which would reasonably be
expected in the aggregate to result in a Material Adverse Change. There is no tax lien, whether
imposed by any federal, state, or other taxing authority, outstanding against the assets,
properties or business of the Company or any of its subsidiaries.
(s) Company Not an “Investment Company.”
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The Company has been advised of the rules and requirements under the Investment Company Act of
1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment
for the Primary Shares and the application of such funds in the manner described in the Preliminary
Prospectus and in the Prospectus will not be, an “investment company” within the meaning of
Investment Company Act and intends to conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance.
Except as disclosed in the Preliminary Prospectus and in the Prospectus, each of the Company
and its subsidiaries are insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as are generally deemed
adequate and customary for their businesses including, but not limited to, policies covering real
and personal property owned or leased by the Company and/or its subsidiaries against theft, damage,
destruction, acts of vandalism and natural disasters. Except as disclosed in the Preliminary
Prospectus and in the Prospectus, the Company has no reason to believe that it or any subsidiary
will not be able to renew its existing insurance coverage as and when such policies expire.
(u) No Price Stabilization or Manipulation.
The Company has not taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares.
(v) Related Party Transactions.
No relationship, direct or indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or
supplier of the Company or any affiliate of the Company, on the other hand, which is required by
the Securities Act to be described in the Preliminary Prospectus or the Prospectus which has not
been described in the Preliminary Prospectus and in the Prospectus.
(w) No Unlawful Contributions or Other Payments.
Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any employee
or agent of the Company or any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation of any applicable
law or of the character required to be disclosed in the Preliminary Prospectus or the Prospectus.
(x) Company’s Accounting System and Internal Controls.
The Company maintains a system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s
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general or specific authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
The Company has established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), which (i) are designed to ensure that material information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified by the Commission, particularly during
the periods in which the periodic reports required under the Exchange Act are being prepared; (ii)
have been evaluated for effectiveness as of September 30, 2005 and (iii) were effective in all
material respects to provide reasonable assurance regarding the functions for which they were
established. Based on the evaluation of its disclosure controls and procedures as of September 30,
2005, the Company is not aware of (i) any significant deficiency or material weakness in the design
or operation of internal controls which would adversely affect the Company’s ability to record,
process, summarize, and report financial data; or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal
control over financial reporting. Since September 30, 2005, the most recent date as of which the
Company evaluated its disclosure controls and procedures, there have been no significant changes in
the Company’s internal control over financial reporting (as defined in Rule 13a-15) or in other
factors that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting, including any corrective actions with regard to
significant deficiencies and material weaknesses in the Company’s internal controls.
(y) Compliance with Environmental Laws.
Except as otherwise disclosed in the Preliminary Prospectus and in the Prospectus, (i) neither
the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law
or regulation relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including without limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”),
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environment Concern (collectively, “Environmental
Laws”), which violation includes, but is not limited to, noncompliance with any environmental
permits or other environmental governmental authorizations required for the operation of the
business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof except where such violation would not cause a Material
Adverse Change, nor has the Company or any of its subsidiaries received any written communication
from a governmental authority that alleges that the Company or any of its subsidiaries is in
violation in any material respect of any Environmental Law; (ii) there is no claim, action or cause
of action filed with a court or governmental authority or investigation with respect to which the
Company has received notice alleging potential material liability for investigatory costs, cleanup
costs, governmental responses costs, natural resources damages, property damages, personal
injuries, attorneys’ fees or penalties
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arising out of, based on or resulting from the presence, or release into the environment, of
any Materials of Environmental Concern at any location or alleging a potential or actual violation
of Environmental Laws (collectively, “Environmental Claims”), pending or, to the Company’s
knowledge, threatened against the Company or any of its subsidiaries; and (iii) to the Company’s
knowledge, there are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge, presence or disposal of
any Materials of Environmental Concern, that reasonably would result in a material violation of any
Environmental Law or form the basis of a potential material Environmental Claim against the Company
or any of its subsidiaries or against any person or entity whose liability for any Environmental
Claim the Company or any of its subsidiaries has retained or assumed either contractually or by
operation of law which would be reasonably likely to result in a Material Adverse Change.
(z) ERISA Compliance.
The Company and its subsidiaries and any “employee benefit plan” (as defined under the
Employee Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its
subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the
“Code”) of which the Company or such subsidiary is a member. No “reportable event” (as defined
under ERISA) has occurred with respect to any “employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” (as
defined in ERISA Section 3(3)) established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined in ERISA Section 4001(a)(18)). Neither the Company, its
subsidiaries nor any of their ERISA Affiliates has incurred any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualification.
(aa) Brokers.
Except as otherwise disclosed in the Preliminary Prospectus and in the Prospectus, there is no
broker, finder or other party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of any transactions contemplated by this
Agreement.
(bb) No Outstanding Loans or Other Indebtedness.
There are no outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company to or for the
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benefit of any of the officers or directors of the Company, except as disclosed in the
Preliminary Prospectus and in the Prospectus.
(cc) Compliance with Laws.
The Company has not been advised, and has no knowledge, that it and each of its subsidiaries
are not conducting business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so in compliance would
not result, individually or in the aggregate, in a Material Adverse Change.
(dd) SEC Compliance.
The Company is in compliance, in all material respects, with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002, including the related rules and regulations promulgated thereunder by
the Commission or the American Stock Exchange.
(ee) Underwriter Not a Fiduciary.
The Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to
this Agreement is an arm’s-length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the Underwriter, on the other, (ii) in connection therewith, the
Underwriter is acting as a principal and not the agent or fiduciary of the Company or any Selling
Stockholder, and (iii) the Underwriter has not assumed any advisory responsibility in favor of the
Company or any Selling Stockholder with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether the Underwriter has advised or is currently advising the
Company on other matters) or any other obligation to the Company or any Selling Stockholder except
the obligations expressly set forth in this Agreement.
Any certificate signed by an officer of the Company and delivered to the Underwriter or to
counsel for the Underwriter shall be deemed to be a representation and warranty by the Company to
the Underwriter as to the matters set forth therein.
The Company acknowledges that the Underwriter and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the Underwriter, will
rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to
such reliance.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each Selling Stockholder hereby severally, and not jointly, represents and warrants to the
Underwriter as follows:
(a) The Underwriting Agreement.
This Agreement has been duly authorized, executed and delivered by or on behalf of such
Selling Stockholder and is a valid and binding agreement of such Selling Stockholder, enforceable
against such Selling Stockholder in accordance with its terms.
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(b) Power of Attorney and Custody Agreement.
The Power of Attorney and Custody Agreement, in the form heretofore furnished to the
Underwriter (the “Power of Attorney and Custody Agreement”), has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding agreement of such Selling
Shareholder, enforceable against such Selling Stockholder in accordance with its terms.
(c) Title to Shares to be Sold; All Authorizations Obtained.
Such Selling Stockholder has, and on the First Closing Date will have, and upon payment of the
purchase price therefor and delivery thereof pursuant to this Agreement the Underwriter will
acquire, good and marketable title to all of the Secondary Shares which may be sold by such Selling
Stockholder pursuant to this Agreement free and clear of all security interests, claims, liens,
equities or other encumbrances. Such Selling Stockholder has the legal right and power, and all
authorizations and approvals required by law and under its organizational documents, if applicable,
to enter into this Agreement and the Power of Attorney and Custody Agreement, to sell, transfer and
deliver all of the Secondary Shares which may be sold by such Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and under the Power of Attorney and
Custody Agreement.
(d) Certificates Suitable for Transfer.
The Secondary Shares to be sold by such Selling Stockholder pursuant to this Agreement are
certificated securities in registered form and are not held in any securities account or by or
through any securities intermediary within the meaning of the Uniform Commercial Code as in effect
in the State of Texas (the “UCC”). Certificates for all of the Secondary Shares to be sold by such
Selling Stockholder pursuant to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian named in the Power of Attorney and
Custody Agreement with irrevocable conditional instructions to deliver such Secondary Shares to the
Underwriters pursuant to this Agreement.
(e) Delivery of Securities.
Upon the Underwriter’s acquiring possession of the Secondary Shares to be sold by such Selling
Stockholder and paying the purchase price therefor pursuant to this Agreement, the Underwriter
(assuming that the Underwriter does not have notice of any adverse claim, within the meaning of
Section 8-105 of the UCC, to such Shares) will acquire its interests in such Secondary Shares
(including, without limitation, all rights that such Selling Stockholder had or has the power to
transfer in such Secondary Shares) free and clear of any adverse claim within the meaning of
Section 8-102 of the UCC.
(f) Non-Contravention; No Further Authorizations or Approvals Required.
The execution and delivery by such Selling Stockholder of, and the performance by such Selling
Stockholder of its obligations under, this Agreement, will not contravene or conflict with, result
in a breach of, or constitute a Default under, or require the consent of any other party to, the
organizational documents of such Selling Stockholder or any other agreement or instrument
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to which such Selling Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, any provision of applicable law or any judgment, order, decree or
regulation applicable to such Selling Stockholder of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over such Selling Stockholder. No
consent, approval, authorization or other order of, or registration or filing with, any court or
other governmental authority or agency, is required for the consummation by such Selling
Stockholder of the transactions contemplated in this Agreement, except such as have been obtained
or made and are in full force and effect under the Securities Act and applicable state securities
or blue sky laws and from the NASD.
(g) No Registration or Other Similar Rights.
Such Selling Stockholder does not have any registration or other similar rights to have any
equity or debt securities registered for sale by the Company under the Registration Statement or
included in the offering contemplated by this Agreement, except rights that are waived for purposes
of this offering or satisfied by this offering.
(h) No Further Consents, etc.
No consent, approval or waiver is required under any instrument or agreement to which such
Selling Stockholder is a party or by which it is bound or under which it is entitled to any right
or benefit, in connection with the offering, sale or purchase by the Underwriter of any of the
Shares which may be sold by such Selling Stockholder under this Agreement or the consummation by
such Selling Stockholder of any of the other transactions contemplated hereby.
(i) Disclosure Made by Such Selling Stockholder in the Preliminary Prospectus and the
Prospectus.
All information furnished by or on behalf of such Selling Stockholder in writing expressly for
use in the Registration Statement, the Preliminary Prospectus and the Prospectus is, at the Time of
Sale was, and on the First Closing Date and any Option Closing Date will be true, correct, and
complete in all material respects, and does not, at the Time of Sale did not, and on the First
Closing Date and any Option Closing Date will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make such information not misleading. Such Selling
Stockholder confirms as accurate the number of shares of Common Stock set forth opposite such
Selling Stockholder’s name Preliminary Prospectus and in the Prospectus under the caption
“Principal and Selling Stockholders” (both prior to and after giving effect to the sale of the
Shares).
(j) No Price Stabilization or Manipulation.
Such Selling Stockholder has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares.
(k) Underwriter Not a Fiduciary.
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Such Selling Stockholder acknowledges and agrees that (i) the purchase and sale of the Shares
pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the
Selling Stockholders, on the one hand, and the Underwriter, on the other, (ii) in connection
therewith, the Underwriter is acting as a principal and not the agent or fiduciary of the Company
or any Selling Stockholder, and (iii) the Underwriter has not assumed any advisory responsibility
in favor of the Company or any Selling Stockholder with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether the Underwriter has advised or is currently
advising the Company on other matters) or any other obligation to the Company or any Selling
Stockholder except the obligations expressly set forth in this Agreement.
Any certificate signed by an officer of a Selling Stockholder and delivered to the Underwriter
or to counsel for the Underwriter shall be deemed to be a representation and warranty by such
Selling Stockholder to the Underwriter as to the matters set forth therein.
Each Selling Stockholder acknowledges that the Underwriter and, for purposes of the opinions
to be delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the
Underwriter, will rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
SECTION 3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Firm Shares.
The Company agrees to issue and sell to the Underwriter the Primary Firm Shares upon the terms
herein set forth. Each of the Selling Stockholders severally, and not jointly, agrees to sell to
the Underwriter the Secondary Shares set forth with respect to such Selling Stockholder on Exhibit
A hereto upon the terms herein set forth. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions herein set forth, the
Underwriter agrees to purchase from the Company and the Selling Stockholders all of the Firm
Shares. The purchase price per Firm Share to be paid by the Underwriter to the Company and the
Selling Stockholders shall be $ per share (representing a public offering price of $ per
share, less an underwriting discount of $ per share).
(b) The First Closing Date.
Delivery of the Firm Shares to be purchased by the Underwriter and payment therefor shall be
made at 9:00 a.m., New York City time, on ___, 2006 or such other time and date as the
Underwriter shall designate by notice to the Company and the Selling Stockholders (the time and
date of such delivery for the Firm Shares are called the “First Closing Date”). The Company and
the Selling Stockholders hereby acknowledge that circumstances under which the Underwriter may
provide notice to postpone the First Closing Date as originally scheduled include, but are in no
way limited to, any determination by the Company or the Underwriter to recirculate to the public
copies of an amended or supplemented prospectus.
(c) The Option Closing Date.
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In addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Company hereby
grants an option to the Underwriter to purchase from the Company, at the purchase price per share
to be paid by the Underwriter for the Firm Shares, the Overallotment Shares. The option granted
hereunder is for use by the Underwriter solely in covering any over-allotments in connection with
the sale and distribution of the Firm Shares. The option granted hereunder may be exercised in
whole or in part and at any time or from time to time upon notice by the Underwriter to the
Company, which notice may be given at any time within 30 days from the date of this Agreement. Each
such notice shall set forth the aggregate number of Overallotment Shares as to which the
Underwriter is exercising the option and the time, date and place at which the Overallotment Shares
will be delivered (which time and date may be simultaneous with, but not earlier than, the First
Closing Date; and in such case the term “First Closing Date” shall refer to the time and date of
delivery of the Firm Shares and the Overallotment Shares). Each such time and date of delivery, if
subsequent to the First Closing Date, is called an “Option Closing Date” and shall be determined by
the Underwriter and shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. The Underwriter may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
(d) Public Offering of the Shares.
The Underwriter hereby advises the Company and the Selling Stockholders that the Underwriter
intends to offer for sale to the public, as disclosed in the Prospectus, the Shares as soon after
this Agreement has been executed as the Underwriter, in its sole judgment, has determined is
advisable and practicable.
(e) Payment for the Shares.
Payment for the Shares shall be made at the First Closing Date (and, if applicable, at any
Option Closing Date) by wire transfer of immediately available funds to the order of the Company
and the Selling Stockholders.
(f) Delivery of the Shares.
The Company shall deliver, or cause to be delivered, to the Underwriter, through the
facilities of the Depository Trust Company (“DTC”), for the account of the Underwriter, the Primary
Firm Shares at the First Closing Date, against receipt of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Each Selling Stockholder shall deliver to the
Underwriter at the First Closing Date certificates representing the Secondary Shares to be sold by
such Selling Stockholder in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank with signatures guaranteed, against receipt of a
wire transfer of immediately available funds for the amount of the purchase price therefor. The
Company shall also deliver, or cause to be delivered, to the Underwriter, through the facilities of
DTC, for the account of the Underwriter, any Overallotment Shares the Underwriter has agreed to
purchase at the First Closing Date or any Option Closing Date, as the case may be, against receipt
of a wire transfer of immediately available funds for the amount of the purchase price therefor.
The documents to be delivered on
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the First Closing Date (or Option Closing Date, as the case may be) on behalf of the parties
hereto pursuant to this Agreement shall be delivered at the offices of Bracewell & Xxxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (or at such other location as the
Underwriter may designate). Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the Underwriter.
(g) Delivery of Prospectus to the Underwriter.
Not later than 12:00 p.m. on the second business day following the date hereof, the Company
shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such
places as the Underwriter shall reasonably request.
| SECTION 4. | ADDITIONAL COVENANTS OF THE COMPANY, THE SELLING STOCKHOLDERS AND THE UNDERWRITER. |
The Company, the Selling Stockholders and the Underwriter covenant and agree as follows:
(a) Underwriter’s Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of the First Closing
Date (or any Option Closing Date, as the case may be) or such date, as in the opinion of counsel
for the Underwriter, the Prospectus is no longer required by law to be delivered (or required to be
delivered but for Rule 172 under the Securities Act) in connection with sales by the Underwriter or
dealer (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration
Statement or the Prospectus, the Company shall furnish to the Underwriter for review a copy of each
such proposed amendment or supplement and shall permit the Underwriter a reasonable opportunity to
comment thereon, and shall consider in good faith any comments made by, or changes requested by, or
objections to the filing of any such amendment or supplement communicated within three business
days to the Company by, the Underwriter or its attorneys or advisors.
(b) Securities Act Compliance.
During the Prospectus Delivery Period, the Company shall promptly advise the Underwriter in
writing (i) of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the Prospectus, (iii) of
the time and date that any post-effective amendment to the Registration Statement becomes effective
and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order preventing or
suspending the use of the Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange or market upon which it is
listed for trading or included or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If the Commission shall enter any such stop order at any
time, the Company will use its reasonable efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b) and 430A, as applicable, under the Securities
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Act and will use its reasonable efforts to confirm that any filings made by the Company under
Rule 424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters.
If, during the Prospectus Delivery Period, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances under which they were made or then
prevailing, not misleading, or if in the opinion of the Underwriter or counsel for the Underwriter
it is otherwise necessary to amend or supplement the Prospectus to comply with applicable law, the
Company agrees to promptly prepare (subject to Section 4(a) hereof), file with the Commission and
furnish at its own expense to the Underwriter and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances under which they were made or then prevailing, be misleading or so that
the Prospectus, as amended or supplemented, will comply with applicable laws.
(d) Copies of any Amendments and Supplements to the Prospectus.
The Company agrees to furnish the Underwriter, without charge, during the Prospectus Delivery
Period, as many copies of the Prospectus and any amendments and supplements thereto as the
Underwriter may reasonably request.
(e) Blue Sky Compliance.
The Company shall cooperate with the Underwriter and counsel for the Underwriter to qualify or
register the Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial securities laws of those jurisdictions
designated by the Underwriter, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The Company will
advise the Underwriter promptly of the suspension of the qualification or registration of (or any
such exemption relating to) the Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.
(f) Transfer Agent.
The Company shall engage and maintain, at its expense, a registrar and transfer agent for the
Common Stock.
(g) Earnings Statement.
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As soon as practicable, but not later than the Availability Date (as defined below), the
Company will make generally available, including, but not limited to, by filing on XXXXX, to its
security holders an earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the rules and regulations
thereunder. “Availability Date” means the dates such information is required to be filed with the
Securities and Exchange Commission.
(h) American Stock Exchange Listing.
The Company will use its best efforts to maintain the listing of the Shares on the American
Stock Exchange.
(i) Agreement Not to Offer or Sell Additional Securities.
During the period commencing on the date hereof and ending on the 90th day following the date
of the Prospectus, none of the Selling Stockholders or the Company will, without the prior written
consent of the Underwriter (which consent may be withheld at the sole discretion of the
Underwriter), directly or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under
the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares of Common Stock, options
or warrants to acquire shares of the Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock (other than as contemplated by this Agreement with respect
to the Shares); provided, however, that the Company may issue shares of its Common Stock or options
to purchase its Common Stock, or Common Stock upon exercise of options or warrants, pursuant to any
stock option, warrant, stock bonus or other stock plan or arrangement described in the Preliminary
Prospectus and in the Prospectus.
(j) No Manipulation of Price.
The Company will not take, directly or indirectly, any action designed to cause or result in,
or that has constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
(k) Additional Documents.
On or before each of the First Closing Date and any Option Closing Date, as the case may be,
the Company will provide to the Underwriter and counsel for the Underwriter such information,
documents and opinions as they may reasonably require for the purposes of enabling them to pass
upon the issuance and sale of the Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
(l) Press Releases During the Prospectus Delivery Period; Free Writing Prospectuses.
The Company shall furnish to the Underwriter for review a copy of any press release that the
Company or any of its affiliates proposes to issue with respect to or that otherwise references
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the offering of the Shares, and, except as required by law, shall not issue any such press
release or make any public statement with respect to or otherwise referring to the offering of the
Shares without the approval of the Underwriter. The Company agrees that, unless it obtains the
prior written consent of the Underwriter, it will not make any communication that would constitute
a free writing prospectus (as defined in Rule 405 under the Securities Act) with respect to the
Shares.
(m) Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Shares sold by it in the manner
described under the caption “Use of Proceeds” in the Preliminary Prospectus and the Prospectus.
(n) Investment Limitation.
The Company shall not invest, or otherwise use the proceeds received by the Company from its
sale of Shares in such a manner as would require the Company or any of its subsidiaries to register
as an investment company under the Investment Company Act.
(o) Agreement of Underwriter Regarding Free Writing Prospectuses.
The Underwriter certifies to and covenants with the Company that it has not and will not use,
authorize use of or refer to any “free writing prospectus” (as defined in Rule 405 under the
Securities Act) other than (i) a free writing prospectus that contains no “issuer information” (as
defined in Rule 433(h)(2) under the Securities Act) that was not included in the Preliminary
Prospectus, or (ii) any free writing prospectus approved in advance by the Company in writing.
The Underwriter may, in its sole discretion, waive in writing the performance by the Company
or the Selling Stockholders of any one or more of the foregoing covenants of the Company or the
Selling Stockholders or extend the time for their performance.
SECTION 5. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Stock, (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Shares by it to the Underwriter, (iv) all fees and
expenses of the Company’s counsel, independent public or certified public accountants and other
advisors, and of one counsel for all of the Selling Stockholders, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and distribution of the
Registration Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and all amendments and
supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses
incurred by the Company or the Underwriter in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part of the Shares for
offer and sale under the state securities or blue sky laws or the provincial securities laws of
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Canada, and, if requested by the Underwriter, preparing and printing a “Blue Sky Survey” or
memorandum, and any supplements thereto, advising the Underwriter of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriter in connection with, the NASD’s review and approval of the
Underwriter’s participation in the offering and distribution of the Shares, (viii) the fees and
expenses associated with listing the Shares on the American Stock Exchange, and (ix) all other
fees, costs and expenses referred to in Item 13 of Part II of the Registration Statement. Except
as provided in this Section 5, Section 7, Section 9 and Section 10 hereof, the Underwriter shall
pay its own expenses, including the fees and disbursements of its counsel. The Selling
Stockholders each further agree with the Underwriter to pay all taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the Underwriter hereunder. This
Section 5 shall not affect or modify any separate, valid agreement relating to the allocation of
payment of expenses between the Company, on the one hand, and the Selling Stockholders, on the
other hand.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITER.
The Underwriter is only obligated to purchase and pay for the Shares as provided herein on the
First Closing Date and any Option Closing Date, as the case may be, if (i) the representations and
warranties of the Company and the Selling Stockholders set forth in Sections 1 and 2 of this
Agreement that are qualified as to materiality or Material Adverse Change are true and correct and
those not so qualified are true and correct in all material respects, as of the date hereof and as
of the First Closing Date as though then made and, with respect to any Option Closing Date, as of
such Option Closing Date as though then made, and (ii) the Company and the Selling Stockholders
have complied in all material respects with all the agreements and covenants to be performed
hereunder and have satisfied all the conditions on its and their part to be satisfied hereunder and
to each of the following conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Underwriter shall have received from
Xxxx & Associates LLP, a letter dated the date hereof addressed to the Underwriter, in form and
substance satisfactory to the Underwriter, containing statements and information of the type
ordinarily included in an accountant’s “comfort letter” to underwriters, delivered according to
Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information contained in the Registration
Statement and the Prospectus.
(b) Compliance with Registration Requirements; No Stop Order; No Objection of NASD. For the
period from and after the date of this Agreement and prior to the First Closing Date and any Option
Closing Date, as the case may be:
| (i) | the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; | ||
| (ii) | no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment to the Registration |
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| Statement shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission; and | |||
| (iii) | the NASD shall have informed the Underwriter that it raises no objection to the fairness and reasonableness of the underwriting terms and arrangements. |
(c) No Material Adverse Change or Ratings Agency Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and any Option Closing Date, as the case
may be:
| (i) | in the reasonable judgment of the Underwriter there shall not have occurred any Material Adverse Change; and | ||
| (ii) | there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act. |
(d) Opinion of Counsel for the Company. On the First Closing Date and any Option Closing
Date, as the case may be, the Underwriter shall have received the favorable opinion of Xxxxx,
Xxxxxxxx & Xxxxx, P.C., counsel for the Company, dated the First Closing Date and, with respect to
any Option Closing Date, dated such Option Closing Date, in each case to the effect set forth in
Exhibit B.
(e) Opinion of Special Colorado Counsel for the Company. On the First Closing Date and any
Option Closing Date, as the case may be, the Underwriter shall have received the favorable opinion
of Xxxxxxx Xxxxx, PLLC, special Colorado counsel for the Company, dated the First Closing Date and,
with respect to any Option Closing Date, dated such Option Closing Date, in each case to the effect
set forth in Exhibit C.
(f) Opinion of Counsel for the Underwriter. On the First Closing Date and any Option Closing
Date, as the case may be, the Underwriter shall have received from Xxxxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriter, such opinion or opinions, dated the First Closing Date and, with
respect to any Option Closing Date, dated such Option Closing Date, with respect to such matters as
the Underwriter may reasonably require.
(g) Opinion of Counsel for the Selling Stockholders. On the First Closing Date, the
Underwriter shall have received the favorable opinion of Xxxxx, Xxxxxxxx & Xxxxx, P.C., counsel for
the Selling Stockholders, or other counsel for any of the Selling Stockholders reasonably
satisfactory to the Underwriter, dated the First Closing Date, to the effect set forth in Exhibit
D.
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(h) Selling Stockholders’ Certificate. On the First Closing Date, the Underwriter shall have
received a written certificate executed by each Selling Stockholder, dated the First Closing Date,
to the effect that:
| (i) | the representations and warranties of such Selling Stockholder set forth in this Agreement are true and correct with the same force and effect as though expressly made by such Selling Stockholder on and as of such date; and | ||
| (ii) | such Selling Stockholder has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such date. |
(i) Company Officers’ Certificate. On the First Closing Date and any Option Closing Date, as
the case may be, the Underwriter shall have received a written certificate executed by the Chief
Executive Officer of the Company and the Chief Financial Officer of the Company, dated the First
Closing Date and, with respect to any Option Closing Date, dated such Option Closing Date, to the
effect set forth in subsections (b)(ii) and (c)(ii) of this Section 6, and further to the effect
that:
| (i) | for the period from and after the date of this Agreement and prior to the First Closing Date and any Option Closing Date, as the case may be, there has not occurred any Material Adverse Change; | ||
| (ii) | the representations and warranties of the Company set forth in Section 1 of this Agreement that are qualified as to materiality or Material Adverse Change are true and correct and those not so qualified are true and correct in all material respects, in each case, with the same force and effect as though expressly made on and as of the First Closing Date and, with respect to any Option Closing Date, as though expressly made on and as of such Option Closing Date; | ||
| (iii) | the Company has complied in all material respects with all the agreements and covenants on its part to be performed hereunder and has satisfied all the conditions on its part to be satisfied hereunder at or prior to the First Closing Date and, with respect to any Option Closing Date, at or prior to such Option Closing Date; and | ||
| (iv) | they have examined the Registration Statement, the Preliminary Prospectus and the Prospectus, and nothing has come to their attention that would lead them to believe that (A) the Registration Statement, as of the time it became effective or as of the First Closing Date or any Option Closing Date, as the case may be, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated |
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| therein or necessary to make the statements therein not misleading, or (B) the Preliminary Prospectus, as of its date or at the Time of Sale, or the Prospectus, as amended or supplemented, as of its date or as of the First Closing Date or any Option Closing Date, as the case may be, contained or contains any 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. |
(j) Bring-down Comfort Letter. On the First Closing Date and any Option Closing Date, as the
case may be, the Underwriter shall have received from Xxxx & Associates LLP a letter dated such
date, in form and substance satisfactory to the Underwriter, to the effect that it reaffirms the
statements made in the letter furnished by it pursuant to subsection (a) of this Section 6, except
that the specified date referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date and, with respect to any Option Closing
Date, no more than three business days prior to any Option Closing Date.
(k) The Company shall have furnished to the Underwriter such further certificates and
documents as the Underwriter shall reasonably request.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Underwriter by notice to the Company at any time
on or prior to the First Closing Date or any Option Closing Date, as the case may be, which
termination shall be without liability on the part of any party to any other party, except that
Section 5, Section 7, Section 9, Section 10 and Sections 12 through 17 shall at all times be
effective and shall survive such termination.
SECTION 7. REIMBURSEMENT OF UNDERWRITER’S EXPENSES.
If this Agreement is terminated by the Underwriter pursuant to Section 6 (other than by reason
of the failure of a Selling Stockholder to satisfy any condition applicable to such Selling
Stockholder as set forth in Section 6) or if the sale to the Underwriter of the Shares on the First
Closing Date (or any Option Closing Date, as the case may be) is not consummated because of any
refusal, inability or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the Underwriter upon demand for
all out-of-pocket expenses that shall have been reasonably incurred by the Underwriter in
connection with the proposed purchase and the offering and sale of the Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 8. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
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SECTION 9. INDEMNIFICATION.
(a) Indemnification of the Underwriter by the Company. The Company agrees to indemnify and
hold harmless the Underwriter, its officers and employees, and each person, if any, who controls
the Underwriter within the meaning of the Securities Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which the Underwriter or such officer,
employee or controlling person may become subject, under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof
as contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A under the Securities
Act, or the omission or alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or
alleged untrue statement of a material fact contained in any preliminary prospectus (including the
Preliminary Prospectus) or the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and to reimburse the
Underwriter and each such officer, employee or controlling person for any and all reasonable
expenses (including reasonable legal fees and disbursements of counsel) as such expenses are
reasonably incurred by the Underwriter or such officer, employee or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with written information furnished to
the Company by the Underwriter expressly for use in the Registration Statement, the Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto). The indemnity agreement set
forth in this Section 9(a) shall be in addition to any liabilities that the Company may otherwise
have.
(b) Indemnification of the Underwriter by the Selling Stockholders. Each of the Selling
Stockholders severally agrees to indemnify and hold harmless the Underwriter, its officers and
employees, and each person, if any, who controls the Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which the Underwriter or such officer, employee or controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any information deemed to be a part
thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) upon any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus (including the
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Preliminary Prospectus) or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder specifically for use therein, and to reimburse
the Underwriter and each such officer, employee or controlling person for any and all expenses) as
such expenses are reasonably incurred by the Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action.
(c) Indemnification of the Company, its Directors and Officers and the Selling Stockholders.
The Underwriter agrees to indemnify and hold harmless the Company, each of its directors, each of
its officers, the Selling Stockholders and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Securities Act or the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which the Company, or any such director,
officer, Selling Stockholder or controlling person may become subject, under the Securities Act,
the Exchange Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of the Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule
430A under the Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not misleading, or (ii)
upon any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus (including the Preliminary Prospectus) or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto),
in reliance upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use therein; and to reimburse the Company, the Selling Stockholders or
any such director, officer or controlling person for any legal and other expense reasonably
incurred by the Company, the Selling Stockholders or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company and the Selling Stockholders hereby
acknowledge that the only information that the Underwriter has furnished to the Company expressly
for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth (A) in the last paragraph on the
cover page of the prospectus and (B) in the sixth, tenth and eleventh paragraphs under the caption
“Underwriting” in the Prospectus; and the Underwriter confirms that such statements are correct.
The indemnity agreement set forth in this Section 9(c) shall be in addition to any liabilities that
the Underwriter may otherwise have.
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(d) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 9 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, which approval shall not be unreasonably withheld, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party, representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding.
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SECTION 10. CONTRIBUTION.
(a) If the indemnification provided for in Section 9 is for any reason held to be unavailable
to or otherwise insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders, on the one hand, and the Underwriter, on the other hand, from the offering of
the Shares pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriter, on the other hand, in connection with the
statements or omissions herein which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders, on the one hand, and the Underwriter, on the other
hand, in connection with the offering of the Shares pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the offering of the Shares
pursuant to this Agreement (before deducting expenses) received by the Company and the Selling
Stockholders, and the total underwriting discount received by the Underwriter, bear to the
aggregate initial public offering price of the Shares. The relative fault of the Company and the
Selling Stockholders, on the one hand, and the Underwriter, on the other hand, shall be determined
by reference to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders, on the one hand, or the Underwriter, on the
other hand, and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(b) The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the limitations
set forth in Section 9(d), any legal or other reasonable fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim. The provisions set
forth in Section 9(d) with respect to notice of commencement of any action shall apply if a claim
for contribution is to be made under this Section 10; provided, however, that no additional notice
shall be required with respect to any action for which notice has been given under Section 9(d) for
purposes of indemnification.
(c) The Company, the Selling Stockholders and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable considerations
referred to in this Section 10.
(d) Notwithstanding the provisions of this Section 10, the Underwriter shall not be required
to contribute any amount in excess of the underwriting commissions received by the Underwriter in
connection with the Shares underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
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fraudulent misrepresentation. For purposes of this Section 10, each officer and employee of
the Underwriter and each person, if any, who controls the Underwriter within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution as the Underwriter,
each director of the Company, each officer of the Company, and each person, if any, who controls
the Company within the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Company, and each person, if any, who controls a Selling Stockholder
within the meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Selling Stockholder.
(e) Notwithstanding the provisions of this Section 10, the liability of each Selling
Stockholder under this Section 10 shall be limited to an amount equal to the gross proceeds, net of
underwriting commissions and discounts but before expenses, to such Selling Stockholder from the
sale of their Shares hereunder.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date, this Agreement may be terminated by the Underwriter by notice
given to the Company if at any time (i) trading or quotation in any of the Company’s securities
shall have been suspended or limited by the Commission or by the American Stock Exchange, or
trading in securities generally on the New York Stock Exchange, the Nasdaq National Market or the
American Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall
have been generally established on any of such stock exchanges or markets by the Commission or the
NASD or any other governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States; (ii) a general banking
moratorium shall have been declared by any of federal or New York authorities; (iii) there shall
have occurred any outbreak or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the Underwriter is material and
adverse and makes it impracticable or inadvisable to market the Shares in the manner and on the
terms disclosed in the Prospectus or to enforce contracts for the sale of securities; (iv) in the
reasonable judgment of the Underwriter there shall have occurred any Material Adverse Change; or
(v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character that in the judgment of the Underwriter would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. Any termination pursuant
to this Section 11 shall be without liability on the part of (a) the Company or the Selling
Stockholder to the Underwriter, (b) the Underwriter to the Company, or (c) of any party hereto to
any other party except that the provisions of Section 9 and Section 10 shall at all times be
effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other statements of
the Company, of the Selling Stockholders and of the Underwriter set forth in or made pursuant to
this Agreement shall remain operative and in full force and effect, regardless of (i) any
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investigation, or statement as to the results thereof, made by or on behalf of the
Underwriter; the officers or employees of the Underwriter; any person controlling the Underwriter;
any person controlling the Company, the officers and employees of the Company or any person
controlling the Company, or any of the Selling Stockholders or any person controlling any of the
Selling Stockholders, (ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Underwriter:
Xxxxxx Xxxxxx & Company, Inc.
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxx
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Bracewell & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Still, Jr.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Still, Jr.
If to the Company:
Natural Gas Services Group, Inc.
0000 Xxxxx Xxxxxx Xxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy (which shall not constitute notice) to:
Xxxxx, Xxxxxxxx & Xxxxx, P.C.
000 X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
000 X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to a Selling Stockholder, to it at its address set forth on Exhibit A, with a copy to (or a copy
to such other counsel to such Selling Stockholder as may be named on Exhibit A):
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Xxxxx, Xxxxxxxx & Xxxxx, P.C.
000 X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
000 X. Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the
benefit of the employees, officers and directors and controlling persons referred to in Section 9
and Section 10, and in each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term “successors” shall not include
any purchaser of the Shares as such from the Underwriter merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to
be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS.
This Agreement shall be governed by and construed in accordance with the internal laws of the
State of Tennessee applicable to agreements made and to be performed in such state.
SECTION 17. GENERAL PROVISIONS.
(a) This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
(b) Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 9 and 10 hereto fairly
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allocate the risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been made in the
Registration Statement and the Prospectus (and any amendments and supplements thereto), as required
by the Securities Act and the Exchange Act.
(c) Except as otherwise provided, this Agreement has been and is made solely for the benefit
of and shall be binding upon the Company, the Selling Stockholders, the Underwriter, the
Underwriter’s officers and employees, any controlling persons referred to herein, the Company’s
directors and the Company’s officers and its successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right under or by virtue
of this Agreement.
[The following page is the signature page.]
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company and the Selling Stockholders the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement in accordance with
its terms.
| Very truly yours, NATURAL GAS SERVICES GROUP, INC. |
||||
| By: | ||||
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer |
||||
| [SELLING STOCKHOLDERS] | ||||
| By: | |||||
| Name: | |||||
| Attorney-in-Fact | |||||
Signature Page of Underwriting Agreement
The foregoing Underwriting Agreement is hereby confirmed and accepted by the Underwriter in
Memphis, Tennessee as of the date first above written.
| XXXXXX XXXXXX & COMPANY, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page of Underwriting Agreement
EXHIBIT A
SELLING STOCKHOLDERS
| Name and Address of Selling Stockholder | Number of Shares to Be Sold | |
EXHIBIT B
OPINION OF COUNSEL FOR THE COMPANY
B-1
EXHIBIT C
OPINION OF SPECIAL COLORADO COUNSEL FOR THE COMPANY
C-1
EXHIBIT D
OPINION OF COUNSEL TO SELLING STOCKHOLDERS
D-1
