EXHIBIT 1.1
Execution Copy
7,000,000 SHARES
DENBURY RESOURCES INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November 21, 2002
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXXX AND ASSOCIATES,
INC.
XXXXXXX RICE & ASSOCIATES, L.L.C.
As Representatives of the several
Underwriters named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Certain stockholders of Denbury Resources Inc., a Delaware corporation (the
"COMPANY"), named in Schedule 2 hereto (the "SELLING STOCKHOLDERS"), propose to
sell an aggregate of 7,000,000 shares (the "FIRM Stock") of the Company's common
stock, par value $.001 per share (the "COMMON STOCK"). In addition, the Selling
Stockholders propose to grant to the underwriters named in Schedule 1 hereto
(the "UNDERWRITERS"), an option to purchase up to an additional 500,000 shares
of the Common Stock, in the aggregate, on the terms and for the purposes set
forth in Section 3 below (the "OPTION STOCK"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "STOCK." This is to
confirm the agreement concerning the purchase of the Stock from the Company and
the Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 333-57382) with
respect to the Stock has (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and the rules and regulations (the "RULES AND
REGULATIONS") of the Securities and Exchange Commission (the "COMMISSION")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities Act. Copies of such
registration statement and amendments thereto have been delivered by the
Company to you as the representatives (the "REPRESENTATIVES") of the
Underwriters. As used in this Agreement,
"EFFECTIVE TIME" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "EFFECTIVE DATE" means the date of
the Effective Time; "PRELIMINARY PROSPECTUS" means each prospectus included
in such registration statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "REGISTRATION STATEMENT" means
such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations and deemed to be a
part of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and "PROSPECTUS"
means the prospectus supplement and the accompanying prospectus and all
information incorporated by reference therein at such time, in the form
first used to confirm sales of Stock. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to item 12
of Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended ("EXCHANGE ACT") after the date
of such Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in the Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any periodic report of the Company
filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by reference in
the Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable Effective Date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the Rules and Regulations, and
none of such documents contained an untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and any further
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documents so filed and incorporated by reference in the Prospectus, when
such documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the rules and
regulations thereunder 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.
(d) The Company and each of its subsidiaries (as defined in Section
17) have been duly incorporated or formed, as the case may be, and validly
existing as their respective business entities and in good standing under
the laws of their respective jurisdictions of incorporation or formation,
as the case may be, are duly qualified to do business and are in good
standing as foreign corporations or limited liability companies in each
jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification
(except where the failure to so qualify or be in good standing as a foreign
corporation or limited liability company would not have a material adverse
effect on the consolidated financial position, stockholders' or members'
equity (as the case may be), results of operation, business or prospects of
the Company and its subsidiaries, taken as a whole), and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and none of the
subsidiaries of the Company other than Denbury Offshore, Inc. is a
"SIGNIFICANT SUBSIDIARY", as such term is defined in Rule 405 of the Rules
and Regulations under the Securities Act.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(f) The shares of Stock to be sold by the Selling Stockholders to the
Underwriters hereunder have been duly and validly authorized.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument, which violation,
breach or conflict would have a material adverse effect on the consolidated
financial position, stockholders' or members' equity (as the case may be),
results of operation, business or prospects of the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such
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actions result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby other than those that have been obtained.
(i) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(j) Except as set forth in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant
to director compensation plans, employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus, and, since
such date, there has not been any change in the capital stock (except for
exercises of options since such date under the Company's existing director
compensation plans, existing stock option plan and issuances of stock under
the Company's existing stock purchase plan) or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the management, financial position, stockholders' equity or
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules), filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in
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conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(m) Deloitte & Touche L.L.P., who have certified certain financial
statements of the Company, whose reports appear in the Prospectus and who
has delivered one of the initial letters referred to in Section 9(g)
hereof, are and have been independent public accountants as required by the
Securities Act and the Rules and Regulations, during the periods covered by
the financial statements on which they reported.
(n) XxXxxxxx and XxxXxxxxxxx, whose reserve audits or evaluations are
referenced or appear, as the case may be, in the Prospectus and who have
delivered the letters referred to in Section 9(i) hereof, were, as of
December 31, 2000 and December 31, 2001, as the case may be, and are, as of
the date hereof, independent engineers with respect to the Company and its
subsidiaries.
(o) The Company and each of its subsidiaries has (1) generally
satisfactory or good and indefeasible title to all its interests in its oil
and gas properties, title investigations having been carried out by or on
behalf of such person in accordance with good practice in the oil and gas
industry in the areas in which such properties are located, (2) good and
marketable title in fee simple to all of its other real property, and (3)
good and marketable title to all personal property owned by it, in each
case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the
value of such properties as a whole and do not materially interfere with
the use made and proposed to be made of such properties as a whole by the
Company and its subsidiaries; and all real properties and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such properties and buildings as a whole by the Company and its
subsidiaries.
(p) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company reasonably
believes is adequate for the conduct of their respective businesses and the
value of their respective properties and is customary for companies engaged
in similar businesses in similar industries.
(q) The Company and its subsidiaries own or possess adequate rights to
use all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service xxxx registrations,
copyrights and licenses necessary for the conduct of their respective
businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others.
(r) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would be reasonably expected to
have a material adverse effect on the consolidated financial
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position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(s) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(t) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(u) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(v) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which might be reasonably
expected to have a material adverse effect on the management, consolidated
financial position, stockholders' equity, results of operations, business
or prospects of the Company and its subsidiaries, taken as a whole.
(w) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "REPORTABLE EVENT" (as defined in
ERISA) has occurred with respect to any "PENSION PLAN" (as defined in
ERISA) for which the Company would have any material liability; the Company
has not incurred and does not expect to incur any material liability under
(I) TITLE IV OF ERISA WITH RESPECT TO TERMINATION OF, OR WITHDRAWAL FROM,
ANY "pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"); and each "PENSION PLAN" for which
the Company would have any material liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and, to the best of the Company's knowledge, nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(x) The Company and its subsidiaries have filed all federal, state and
local income and franchise tax returns required to be filed through the
date hereof or have filed for appropriate extensions for such taxes and
have paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole.
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(y) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) except for exercises of options since
such date under the Company's existing director compensation plans or
existing stock option plan and issuances of stock under the Company's
existing stock purchase plan, issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(z) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(aa) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any respect, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets
is subject or (iii) is in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, expect, in the cases of clauses (ii) and (iii), such defaults,
events, violations or failures that in the aggregate might reasonably be
expected to have a material adverse effect on the management, consolidated
financial position, stockholders' equity, results of operations, business
or prospects of the Company and its subsidiaries, taken as a whole.
(bb) The course of conduct of the Company in transactions between the
Company and its subsidiaries on one hand, and Genesis Partners, L.P. (the
"PARTNERSHIP") and its subsidiaries on the other hand, since the
acquisition by the Company of Genesis Energy LLC, the general partner of
the Partnership, has at all times been "fair and reasonable" to the
Partnership, as determined within the context of Section 7.9 of the limited
partnership agreement of the Partnership.
(cc) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries in violation
of any applicable law, ordinance, rule,
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regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a material adverse effect on the management, consolidated
financial position, stockholders' equity, results of operations, business
or prospects of the Company and its subsidiaries, taken as whole; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of its subsidiaries or with respect to which the Company or
any of its subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not have or would not be reasonably likely to have, singularly or in
the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect on
the management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole; and the terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the
meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection ("ENVIRONMENTAL
LAWS").
(dd) Neither the Company nor any subsidiary is an "INVESTMENT COMPANY"
as defined in the Investment Company Act of 1940, as amended.
(ee) Except as described in the Prospectus, no subsidiary of the
Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of
such subsidiary's property or assets to the Company or any other subsidiary
of the Company.
(ff) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities ("PERMIT" or "PERMITS")
necessary for the ownership of property or assets or to conduct their
respective businesses except where the failure to have such Permits would
not reasonably be expected to have a material adverse effect on the
management, consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its subsidiaries,
taken as a whole; neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole; the Company and each of its
subsidiaries has operated and is operating its business in compliance with
and not in violation of any of its obligations with respect to each such
Permit except where such violation would not reasonably be expected to have
a material adverse effect on the management, consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries, taken as
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a whole; no event has occurred which allows, or after notice or lapse of
time or both would allow, revocation or termination of any such Permit or
result in any other impairment of the rights of the Company or any of its
subsidiaries under any such Permit, subject in each case to such
qualification as described in the Prospectus; and, except as described in
the Prospectus, such permits contain no restrictions that are burdensome to
the Company or any of its subsidiaries except for restrictions that would
not, singly or in the aggregate, have a material adverse effect on the
management, consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its subsidiaries,
taken as a whole.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Stock shall be deemed a representation and warranty by the Company, as to
matters covered thereby, to each Underwriter.
2. Representations, Warranties and Agreements of the Selling Stockholders.
Each Selling Stockholder severally, and not jointly, represents, warrants and
agrees that:
(a) The Selling Stockholder has, and immediately prior to each
Delivery Date (as defined in Section 5 hereof) the Selling Stockholder will
have, good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and
payment therefor pursuant hereto and thereto (and assuming that the
Underwriters acquire the shares of Stock without any notice of any adverse
claim (within the meaning of Section 8-105 of the Uniform Commercial Code)
that has been created by the Underwriters or their Affiliates) good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has full right, partnership power and
authority to enter into this Agreement; the execution, delivery and
performance of this Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the property or assets of
the Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the certificate of limited partnership or
the partnership agreement of the Selling Stockholder, or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property or assets
of the Selling Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations, filings or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Selling
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Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby.
(c) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus,
when they become effective or are filed with the Commission, as the case
may be, do not and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, the foregoing representations
and warranties shall only apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to such Selling Stockholder furnished
to the Company in writing by such Selling Stockholder expressly for use
therein; and provided, further, that no representation or warranty is made
as to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein.
(d) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Stock set opposite its name in Schedule 2
hereto, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from each Selling Stockholder
that number of shares of the Common Stock which represents the same proportion
of the number of shares of the Firm Stock to be sold by each Selling
Stockholder, as the number of shares of the Firm Stock set forth opposite the
name of such Underwriter in Schedule 1 represents of the total number of shares
of the Firm Stock to be purchased by all of the Underwriters pursuant to this
Agreement. The respective purchase obligations of the Underwriters with respect
to the Firm Stock shall be rounded among the Underwriters to avoid fractional
shares, as the Representatives may determine.
In addition, the Selling Stockholders specified in Schedule 2 hereto grant
to the Underwriters options to purchase up to an aggregate of 500,000 shares of
Option Stock. Such options are granted solely for the purpose of covering
over-allotments in the sale of Firm Stock and are exercisable as provided in
Section 5 hereof. Shares of Option Stock shall be purchased severally for the
account of each Underwriter in proportion to the number of shares of Firm Stock
set forth opposite the name of such Underwriters in Schedule 1 hereto. The price
of both the Firm Stock and any Option Stock shall be $9.50 per share.
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The Selling Stockholders shall not be obligated to deliver any of the
Stock to be delivered on the First Delivery Date or the Second Delivery Date, as
the case may be, except upon payment for all the Stock to be purchased on such
Delivery Date as provided herein.
4. Offering of Stock by the Underwriters. Upon authorization by the
Underwriters of the release of the Firm Stock, the several Underwriters propose
to offer the Firm Stock for sale upon the terms and conditions set forth in the
Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for the
Firm Stock shall be made at the office of Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000, at 9:00 A.M., Houston, Texas time, on the
third full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives,
the Selling Stockholders and the Company. This date and time are sometimes
referred to herein as the "FIRST DELIVERY DATE." On the First Delivery Date, the
Selling Stockholders shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Selling Stockholders of
the purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Selling Stockholders shall, or shall cause a custodian to, make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the options granted in Section 3 above may be exercised by written
notice being given to the Company and the Selling Stockholders by the
Representatives. Exercise of these options shall be exercised pro rata among the
Selling Stockholders set forth in Schedule 2 hereto as determined by the
Representatives. Such notice shall set forth the aggregate number of shares of
Option Stock as to which the options are being exercised, the names in which the
shares of Option Stock are to be registered, the denominations in which the
shares of Option Stock are to be issued and the date and time, as determined by
the Representatives, when the shares of Option Stock are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the options shall have been exercised nor later than the fifth business day
after the date on which the options shall have been exercised. The date and time
the shares of Option Stock are delivered are sometimes referred to as the
"SECOND DELIVERY DATE" and the First Delivery Date and the Second Delivery Date
are sometimes each referred to as a "DELIVERY DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the
Representatives, the Selling Stockholders and the Company) at 9:00 A.M., Dallas,
Texas time, on the Second Delivery Date. On the Second Delivery Date, the
Selling Stockholders shall deliver or cause to be delivered the certificates
-11-
representing the Option Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Selling Stockholders of
the purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Selling Stockholders shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file the Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Representatives a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits)
and, (ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the Stock or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact
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or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Securities Act or the Exchange
Act, to notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Representatives,
be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing; provided, that the foregoing restriction
shall not preclude the Company from (x) filing without the consent of the
Representatives any document required to be filed under the Exchange Act or
(y) after the period set forth in Section 6(i) of this Agreement, amending
the Registration Statement or filing a prospectus;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives 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 (including, at the option of the Company,
Rule 158);
(g) For a period of three years following the Effective Date, to
furnish to the Representatives copies all materials furnished by the
Company to its stockholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder; provided however that the Company shall not be required to
provide the Representatives with any such reports, registration statements
or similar forms that have been filed with the Commission by electronic
transmission pursuant to XXXXX;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided that in connection
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therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(i) For a period of 90 days from the date of the Prospectus: not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially
owned in accordance with the rules and regulations of the Securities and
Exchange Commission and shares of Common Stock that may be issued upon
exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock (other than the Stock), or sell or grant
options, rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (expect for
issuances of stock or grants of options under the Company's existing
director compensation plan and employee stock purchase and option plans) or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case without the
prior written consent of Xxxxxx Brothers Inc. on behalf of the
Underwriters; and (3) unless Xxxxxx Brothers Inc. on behalf of the
Underwriters gives its prior written consent, permit sales that may be
restricted under registration rights agreements between the Company and
stockholders in which stockholders have agreed not to sell shares if
requested by underwriters in an offering; and to cause each executive
officer and director and 5% beneficial owner of the Company listed on
Schedule 3 hereto to furnish to the Underwriters, prior to the First
Delivery Date, a letter or letters, substantially in the form of Exhibit A
hereto, pursuant to which each such person shall agree not to, directly or
indirectly, ((1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (including, without limitation,
shares of Common Stock that may be deemed to be beneficially owned in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock that may be issued upon exercise of
any option or warrant) or securities convertible into or exchangeable for
Common Stock (other than the Stock), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc. on behalf of the Underwriters; provided however, that such
executive officer, director or 5% beneficial owner listed on Schedule II
hereof may make bona fide gifts to persons or entities who agree in writing
with the Underwriters to be bound by the provisions of the letter
substantially in the form of Exhibit A hereto furnished to the Underwriters
and provided further that certain officers and directors approved by Xxxxxx
Brothers Inc. may sell or otherwise transfer up to an aggregate of 60,000
Shares;
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(j) Prior to the Effective Date, to apply, to the extent necessary,
for the listing of the Stock on the New York Stock Exchange and to use its
best efforts to complete that listing, subject only to official notice of
issuance, prior to the First Delivery Date;
(k) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder; and
(l) To not directly or indirectly take any action designed to or which
has constituted or which might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Stock.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees:
(a) For a period of 90 days from the date of the Prospectus not to (1)
offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any shares
of Common Stock or securities convertible into or exchangeable for Common
Stock (other than the Stock) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise, without the prior written consent of Xxxxxx Brothers Inc. on
behalf of the Underwriters;
(b) That the Stock to be sold by the Selling Stockholder hereunder is
subject to the interest of the Underwriters and the other Selling
Stockholders hereunder, and that the Selling Stockholders shall not,
directly or indirectly, take any action that may terminate its obligations
hereunder (other than the termination of this Agreement); and
(c) To deliver to the Representatives on or prior to the First
Delivery Date or the Second Delivery Date, as the case may be, a properly
completed and executed United States Treasury Department Form W-9.
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the filing fees incident to securing any required
review by the NASD of the terms of sale of the Stock; (f) any applicable listing
or other
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fees; (g) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement
except that the discount to the Underwriters for the purchase of the Stock shall
be borne by the Selling Stockholders; provided that, except as provided in this
Section 8 and in Section 13 below the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters, and, as between the Underwriters and the
Selling Stockholders only, each of the Selling Stockholders shall pay the fees
and expenses of his or its counsel, any custodian (and any other
attorney-in-fact), and any transfer taxes payable in connection with his or its
respective sales of Stock to the Underwriters; and provided further, that the
provisions of this Section 8 shall not affect any agreement that the Company and
any Selling Stockholder may have entered into, or may hereafter enter into, with
respect to the sharing or reimbursement of any of the foregoing costs and
expenses.
9. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a) above; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Xxxxxxx & Xxxxx L.L.P.,
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholders shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Jenkens and Xxxxxxxxx, A Professional Corporation, shall have
furnished to the Representatives on behalf of the Underwriters its written
opinion, as counsel to the Company, addressed to the Underwriters and dated
such Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
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(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations or limited
liability companies, as the case may be, in good standing under the
laws of their respective jurisdictions of incorporation or formation,
are duly qualified to do business and are in good standing as foreign
corporations or limited liability companies in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, (other
than where the failure to so qualify or be in good standing as a
foreign corporation would not have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operation or business of the Company and its subsidiaries, taken as a
whole), and have all power and authority necessary to own or hold
their respective properties and conduct the businesses described in
the Propsectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock (or the equivalent) of each subsidiary of the Company have been
duly and validly authorized and issued and are fully paid,
non-assessable and (except for any directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(iii) The shares of the Stock being delivered on such Delivery
Date to the Underwriters hereunder have been duly and validly
authorized and validly issued and are fully paid and non-assessable;
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of the Common
Stock (including the Stock) pursuant to the Company's charter or
by-laws or any agreement or other instrument filed as an exhibit to
one of the Company's periodic reports under the Exchange Act;
(v) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, might have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such counsel's
opinion, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule
-17-
424(b) of the Rules and Regulations specified in such opinion on the
date specified therein and no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is pending or threatened
by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
each Delivery Date (except for the financial statements and financial
schedules and other financial and related statistical data included
therein, as to which such counsel need express no belief) comply as to
form in all material respects with the requirements of the Securities
Act and the Rules and Regulations, and the documents incorporated by
reference in the Prospectus when they where filed with the Commission
(except for the financial statements and financial schedules and other
financial and related statistical data included therein, as to which
such counsel need express no belief) complied as to form in all
material respects with the requirements of the Exchange Act and the
Rules and Regulations;
(viii) The statements contained in the Prospectus under the
heading "Description of Capital Stock" insofar as such statements
refer to statements of law, descriptions of statutes, rules or
regulations or legal conclusions, are accurate and fair summaries of
such statements of law, descriptions of statutes, rules or regulations
or legal conclusions;
(ix) To such counsel's knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel 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 material property or
assets of the Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under
-18-
the Exchange Act and applicable state securities laws in connection
with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby and thereby;
(xii) To such counsel's knowledge, except as described or included in
the Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act;
(xiii) Neither the Company nor any subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that (x) their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of Texas and the General Corporation Law of the State of
Delaware, and that such counsel is not admitted in Delaware and (y) insofar as
the foregoing opinions relate to the valid existence and good standing of the
Company and its subsidiaries, they are based solely on certificates of
authorities in the states of organization of the Company and such subsidiaries
that such counsel received in response to such counsel's requests for
confirmation of the existence and good standing of the Company and such
subsidiaries in such states, copies of which certificates have been furnished to
you, and, in rendering the opinion set forth in opinion (i) above with respect
to the qualification and the good standing as a foreign corporation of the
Company and such subsidiaries, such counsel has relied solely on certificates
such counsel received from the states necessary to give such opinion that such
counsel received in response to such counsel's requests for confirmation of such
qualification and good standing, as the case may be, of the Company and such
subsidiaries in such states, copies of which certificates have been furnished to
you.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead them to believe that
the Registration Statement (except for the financial statements and related
schedules and other financial data, and reserve information included therein, as
to which such counsel need express no belief) as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (except as stated above) contains
any untrue statement of a material fact 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
-19-
misleading. The foregoing opinion and statement may be qualified by a statement
to the effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for the statements made in the
Prospectus under the caption "Description of Capital Stock" insofar as such
statements relate to the Stock and concern legal matters.
(e) Counsel for the Selling Stockholders shall have furnished to the
Representatives on behalf of the Underwriters its written opinion, as
counsel to the Selling Stockholders for whom it is acting as counsel,
addressed to the Underwriters and dated the First Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Selling Stockholder has the partnership power to enter
into this Agreement and to perform its obligations thereunder, the
execution, delivery and performance of this Agreement have been duly
authorized by all necessary partnership action of the Selling
Stockholder;
(ii) The execution and delivery by the Selling Stockholder of
this Agreement and the performance of its obligations thereunder (a)
do not require any consent, approval, authorization, registration or
qualification of or with any governmental authority of the United
States of America or the State of New York, except such as may be
required under the Securities Act of 1933 and the Securities Exchange
Act of 1934 (but we express no opinion as to any consent, approval,
authorization, registration or qualification that may be required
under state securities or Blue Sky laws), (b) do not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any of the constituent documents of the
Selling Stockholder and (c) do not violate the terms of any New York
State or United States federal law or regulation of the Delaware
Partnership Act (but we express no opinion with respect to United
States federal securities laws or any state securities or Blue Sky
laws).
(iii) Assuming each Underwriter acquires its interest in the
Stock to be sold by the Selling Stockholder to such Underwriter
without notice of any adverse claim (within the meaning of the Uniform
Commercial Code as in effect in the State of New York (the "UCC")) and
such Underwriter has paid the purchase price for such Stock and has
had such Stock credited to the securities account of such Underwriter
maintained with The Depository Trust Company, then such Underwriter
will have a securities entitlement (as defined in Section 8-102(a)(17)
of the UCC) to such Stock purchased by such Underwriter and no action
based on an adverse claim to such Stock credited to such securities
account, whether framed in conversion, replevin, constructive trust,
equitable lien or other theory, may be asserted against such
Underwriter.
In rendering such opinion, such counsel may (x) limit the opinion in
section 9(e)(ii) above to those documents received by counsel set forth in an
exhibit to the opinion (which constituent documents shall be certified as true,
complete and correct copies by the Selling Stockholders or their affiliates) and
(y) state that its opinion is limited to matters governed by the
-20-
Federal laws of the United States of America and the laws of the State of New
York, the Delaware Revised Uniform Limited Partnership Act and the General
Corporation Law of Delaware and that such counsel is not admitted in Delaware.
(f) The Representatives shall have received from Xxxxxxx & Xxxxx
L.L.P., counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the Underwriters shall
have received a letter from Deloitte & Touche LLP, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "COMFORT LETTERS" to underwriters in
connection with registered public offerings.
(h) With respect to the letter of Deloitte & Touche LLP referred to in
the preceding paragraph and delivered to the Representatives, on behalf of
the Underwriters, concurrently with the execution of this Agreement (the
"INITIAL LETTER"), the Company shall have furnished to the Representatives
a letter (the "BRING-DOWN LETTER"), addressed to the Underwriters and dated
such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(i) At each of the time of the execution of this Agreement and at the
Delivery Date, the Company shall have furnished to the Representatives a
letter from XxXxxxxx and XxxXxxxxxxx addressed to the Underwriters and
dated the date hereof and dated the date of such Delivery Date,
respectively, confirming that they are or were independent engineers with
respect to the Company and stating, as of the date of such letter, the
conclusions and findings of such firm with respect to the information and
other matters covered by their letter delivered to the Representatives
concurrently with the execution of
-21-
this Agreement and confirming in all material respects the conclusions and
findings set forth in such prior letter.
(j) The Company shall have furnished to the Representatives, addressed
to the Underwriters, a certificate, dated such Delivery Date, of its chief
executive officer and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 hereof are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(l) hereof have been
fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.
(k) Each Selling Stockholder (or any custodian or one or more
attorneys-in-fact on behalf of each Selling Stockholder) shall have
furnished to the Representatives on the First Delivery Date a certificate,
dated the First Delivery Date, signed by, or on behalf of, the Selling
Stockholder (or any custodian or one or more attorneys-in-fact) stating
that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct in all material respects
as of the First Delivery Date and that the Selling Stockholder has complied
with all agreements contained herein to be performed by the Selling
Stockholder at or prior to the First Delivery Date.
(l) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity,
prospects or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or
-22-
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as
to make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(n) To the extent required, the New York Stock Exchange shall have
approved the Stock for listing, subject only to official notice of
issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
in (A) any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (B) in any
materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("MARKETING MATERIALS"), including any roadshow or investor presentations
made to investors by the Company (whether in person or electronically);
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials any material
fact required to be stated therein or necessary to make the statements
therein not misleading; or (iii) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or relating in
any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be
-23-
taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein which consists solely of
information set forth in Section 10(f) hereof; and provided further,
however that the Company shall not be liable to any Underwriter in any such
case with respect to any untrue statement or alleged untrue statement or
omission or alleged omission of a material fact in the Preliminary
Prospectus to the extent that the loss, claim, damage or liability of such
Underwriter (or the action in respect thereof) arises out of a sale by such
Underwriter of Stock to a person who was not sent or given, at or prior to
the closing of such sale to such person, a copy of the Prospectus as then
amended or supplemented, if the Company had previously furnished (or made
available) copies thereof to such Underwriter and the statement or omission
in question contained in the Preliminary Prospectus was corrected therein.
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Underwriter or to any officer, employee
or controlling person of that Underwriter.
(b) Each Selling Stockholders, severally and not jointly, shall
indemnify and hold harmless each Underwriter, its officers and employees,
and each person, if any, who controls any Underwriter within the meaning of
the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee
or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (1) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (2) the omission or alleged omission to state in any Preliminary
Prospectus, Registration Statement or the Prospectus, or in any amendment
or supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, in the case of
subparagraphs (1) and (2) of this Section 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 or in conformity with written
information furnished to the Company or such Underwriter by such Selling
Stockholder directly or through such Selling Stockholder's representatives,
specifically for use in the preparation thereof; and shall reimburse each
Underwriter, its officers and employees and each such controlling person
for any legal or other expenses reasonably incurred by that Underwriter,
its officers and employees or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Selling Stockholders shall not be liable in any such case
to the extent that any such loss, claim, damage,
-24-
liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein which consists solely of the information specified in
Section 10(f) hereof and provided, further, that with respect to any
Preliminary Prospectus, the foregoing indemnity agreement shall not inure
to the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Stock, or any person
controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to this Agreement and a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage,
liability or expense. However, in no event shall the Selling Stockholder be
liable under the provisions of this Section 10 for any amount in excess of
the total proceeds received by such Selling Stockholder from the sale of
the Stock by such Selling Stockholder (after deducting commissions, but
before taxes and any other expenses) pursuant to this Agreement. The
foregoing indemnity agreement is in addition to any liability which the
Selling Stockholders may otherwise have to any Underwriter or any officer,
employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, and each Selling Stockholder and its
officers and employees, each of its directors, and each person if any, who
controls the Selling Stockholder within the meaning of the Securities Act
from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Marketing Materials any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company, such Selling
Stockholder and any such director, officer or controlling person of the
Company or the Selling Stockholder for any legal or other expenses
reasonably incurred by the Company, such Selling Stockholder or any such
director, officer or controlling person of
-25-
the Company or the Selling Stockholder in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Underwriter may
otherwise have to the Company, such Selling Stockholder or any such
director, officer, employee or controlling person of the Company or the
Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure; and, provided further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 10
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Underwriters shall have the
right to employ counsel to represent jointly the Underwriters and those
other Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Underwriters against the Company or
any Selling Stockholder under this Section 10 if, in the reasonable
judgment of the Underwriters, it is advisable for the Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company or Selling Stockholders. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
-26-
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage
or liability, or action in respect thereof, (i) in such proportion as shall
be appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
from the offering of the Stock 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 Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations; provided, the Selling Stockholders and the
Underwriters shall be obligated to contribute under this Section 10(e) only
with respect to losses, liabilities, claims, damages or expenses arising
out of an untrue statement or omission or alleged untrue statement or
omission of a material fact made in reliance upon and in conformity with
the information contained in Section 10(g) or Section 10(f), respectively,
hereunder. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other with respect
to such offering shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether
the 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, the Selling Stockholders or the Underwriters, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 10(e) were to
be determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section shall be deemed to include, for purposes of this Section
10(e), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 10(e), (i) no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or
alleged
-27-
omission and (ii) no Selling Stockholder shall be required to contribute
any amount in excess of the total proceeds received by such Selling
Stockholder from the offering of the Stock by such Selling Stockholder
(after deducting commissions, but before taxes and any other expenses). No
person guilty of fraudulent misrepresentation (within the meaning of
Section 10(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(e)
are several in proportion to their respective underwriting obligations and
not joint.
(f) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the list of Underwriters and
their respective participation in the sale of Stock under the caption
"Underwriting" in, and the paragraphs addressing the underwriting discount,
concessions and reallowances, stabilization, short positions, syndicate
transactions and penalty bids appearing under the caption "Underwriting"
in, the Prospectus are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3
hereof. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Underwriters who
so agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Underwriters do not elect to purchase the shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and the applicable Selling
Stockholders to sell, the Option Stock) shall terminate without liability on the
part of any non-defaulting Underwriter or the Selling Stockholders, except that
the Company will continue to be liable for the payment of expenses to the extent
set forth in Sections 8 and 13 hereof. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who,
-28-
pursuant to this Section 11, purchases Firm Stock which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Selling Stockholders for damages caused by its
default. If other underwriters are obligated or agree to purchase the Stock of a
defaulting or withdrawing Underwriter, either the Representatives, the
applicable Selling Stockholders or the Company may postpone the Delivery Date
for up to seven full business days in order to effect any changes that in the
opinion of counsel for the Company, counsel for the Selling Stockholders or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(l) or 9(m)
hereof, shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If any Selling Stockholder
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company or any Selling
Stockholder to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or the Selling Stockholders is not fulfilled, the
Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 12 hereof
by reason of the default of one or more Underwriters, neither the Company nor
the Selling Stockholders shall be obligated to reimburse any Underwriter on
account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Brothers Inc., Syndicate Registration
Department, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (Fax: 000-000-0000),
with a copy, in the case of any notice pursuant to Section 8(c), to the
Director of Litigation, Office of the General Counsel, Xxxxxx Brothers
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
(b) if to the Company, shall be delivered or sent by mail, telex,
facsimile transmission or recognized overnight delivery service to the
address of the Company set forth in the Registration Statement, Attention:
Xxxx Xxxxxxx (Fax: (000) 000-0000); and
(c) if to any Selling Stockholder, shall be delivered or sent by mail,
telex, facsimile transmission or recognized overnight delivery service to
such Selling Stockholder at the address set forth on Schedule 2 hereto;
-29-
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
above shall be delivered or sent by mail, telex, facsimile transmission or
recognized overnight delivery service to such Underwriter at its address set
forth in its acceptance telex to the Underwriters, which address will be
supplied to any other party hereto by the Underwriters upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company and the Selling Stockholders shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by Xxxxxx Brothers Inc., and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by a custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, the Selling
Stockholders and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Company and the Selling Stockholders contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, directors or general partners of the Selling
Stockholders, as the case may be, officers of the Company who have signed the
Registration Statement and any person controlling the Company or a Selling
Stockholder within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
16. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For purposes
of this Agreement, (a) "BUSINESS DAY" means any day on which the American Stock
Exchange is open for trading and (b) "SUBSIDIARY" has the meaning set forth in
Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholders and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
DENBURY RESOURCES INC.
By:
----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer and President
The Selling Stockholders named in Schedule 2
to this Agreement:
TPG PARTNERS, L.P.
By: TPG GenPar, L.P., general partner
By: TPG Advisors, Inc., general partner
By:
-------------------------------------
Name:
Title:
TPG PARALLEL I, L.P.
By: TPG GenPar, L.P., general partner
By: TPG Advisors, Inc., general partner
By:
-------------------------------------
Name:
Title:
-31-
TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P., general partner
By: TPG Advisors II, Inc.
By:
-------------------------------------
Name:
Title:
TPG PARALLEL II, L.P.
By: TPG GenPar II, L.P., general partner
By: TPG Advisors II, Inc.
By:
-------------------------------------
Name:
Title:
TPG INVESTORS II, L.P.
By: TPG GenPar II, L.P., general partner
By: TPG Advisors II, Inc.
By:
-------------------------------------
Name:
Title:
TPG 1999 EQUITY PARTNERS II, L.P.
By: TPG Advisors II, Inc.
By:
-------------------------------------
Name:
Title:
-32-
Accepted:
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXXX & ASSOCIATES,
INC.
XXXXXXX RICE & COMPANY, L.L.C.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By:
-----------------------------------------
Authorized Representative
-33-
Schedule 1-1
SCHEDULE 1
-------------------------------------------------- -------------------------------- ----------------------------------
NUMBER OF SHARES OF OPTION STOCK
TO BE PURCHASED (IF
NUMBER OF SHARES OF FIRM STOCK OVER-ALLOTMENT OPTION EXERCISED
NAME OF UNDERWRITER TO BE PURCHASED IN FULL)
------------------- --------------- --------
-------------------------------------------------- -------------------------------- ----------------------------------
Xxxxxx Brothers Inc......................... 3,500,000 250,000
CIBC World Markets Corp..................... 1,750,000 125,000
Xxxxxxx Xxxxx & Associates, Inc............. 875,000 62,500
Xxxxxxx Rice & Company, L.L.C. ............. 875,000 62,250
------- ------
Total................... 7,000,000 500,000
Schedule 1-1
Schedule 2-1
SCHEDULE 2
NAME AND ADDRESS OF SELLING STOCKHOLDER NUMBER OF SHARES OF NUMBER OF SHARES OF
--------------------------------------- -------------------- --------------------
FIRM STOCK OPTION STOCK
TPG Partners, L.P. 2,035,517 145,394
TPG Parallel I, L.P. 202,855 14,490
TPG Partners II, L.P. 4,057,008 289,785
TPG Parellel II, L.P. 276,861 19,776
TPG Investors II, L.P. 423,188 30,228
TPG Equity Partners II, L.P. 4,571 327
Total 7,000,000 500,000
========= =======
(1) Each of these Selling Stockholders has granted the Underwriters a 30-day
option to purchase shares of Option Stock.
Schedule 2-1
EXHIBIT A
LOCK-UP LETTER AGREEMENT
November ___, 2002
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
XXXXXXX XXXXX & ASSOCIATES,
INC. XXXXXXX RICE & COMPANY, L.L.C.
As representatives of the several underwriters named
in Schedule I to the Underwriting Agreement
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you, representatives of the several
underwriters (collectively, the "Underwriters") propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") providing for the purchase
by the Underwriters of shares (the "Shares") of Common Stock of Denbury
Resources Inc. (the "Company") and that the Underwriters propose to reoffer the
Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) or
sell or grant options, rights or warrants with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement or on
the date of the completion of the Offering, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 90 days after the date of the Final Prospectus relating to the
Offering; provided however, that the undersigned may make bona fide gifts to
persons or entities who agree in writing with you to be bound by the provisions
of this Lock-Up Letter Agreement. In furtherance of the foregoing, the Company
and its Transfer Agent are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Letter Agreement.
Exhibit A-1
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, I will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
Name:
Exhibit A-2
