Exhibit 1.1
1,000,000 Shares
QUICKSILVER RESOURCES INC.
(a Delaware corporation)
Common Stock
(Par Value $0.01 Per Share)
UNDERWRITING AGREEMENT
November 18, 2002
MCDONALD INVESTMENTS INC.
0000 XxXxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Quicksilver Resources Inc., a Delaware corporation (the "Company") confirms
its agreement with McDonald Investments Inc. (the "Underwriter") with respect to
the sale by the Company and the purchase by the Underwriter, of an aggregate
1,000,000 shares of common stock, par value $.01 per share of the Company (the
"Common Stock"), and with respect to the grant by the Company of the option
described in Section 2(b) hereof to purchase all or any part of 150,000 shares
of Common Stock solely to cover over-allotments, in each case except as may
otherwise be provided in the Pricing Agreement, as hereinafter defined. The
aforesaid 1,000,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriter and all or any part of the 150,000 shares of Common
Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are collectively hereinafter called the "Securities." The offering
of the Securities will be governed by this Underwriting Agreement (this
"Agreement").
The Company has prepared and filed in conformity with the requirements of
the Securities Act of 1933, as amended (the "1933 Act"), and the published rules
and regulations thereunder (the "1933 Act Rules") adopted by the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-89204), including a related prospectus (the "Base Prospectus") relating
to the Common Stock and preferred stock of the Company to be sold from time to
time by the Company in accordance with Rule 415 of the Securities Act, and such
amendments thereof as may have been required to the date of this Agreement.
Copies of such registration statement (including all amendments thereof and all
documents deemed incorporated by reference therein) and of the related Base
Prospectus have heretofore been delivered by the Company to the Underwriter. The
term "Registration Statement" as used in this Agreement means such registration
statement as from time to time amended or supplemented pursuant to the
Securities Exchange Act of 1934, as amended (the
"1934 Act"), Rule 415 and Rule 434 of the 1933 Act Rules, or otherwise, any
registration statement filed under Rule 462 of the 1933 Act Rules as such
registration statement may be amended from time to time and all information
contained in the final prospectus supplement to the Base Prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Rules (the "Prospectus
Supplement"). The term "Prospectus" means the Base Prospectus and the Prospectus
Supplement. Unless otherwise stated herein, any reference herein to the
Registration Statement and the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, which were filed under the Exchange Act on or
before the date hereof or are so filed hereafter. Any reference herein to the
terms "amend," "amendment," or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include any such
document filed or to be filed under the Exchange Act after the date of the
Registration Statement or Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
The Company understands that the Underwriter proposes to make a public
offering of the Securities, as set forth in and pursuant to the Prospectus. The
Company hereby confirms that the Underwriter and dealers have been authorized to
distribute or cause to be distributed each Prospectus and are authorized to
distribute the Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the Underwriter).
SECTION 1. Representations and Warranties of the Company. (a) The Company
represents and warrants to the Underwriter as follows:
(i) The Company meets the requirements for the use of Form S-3. On the date
the Registration Statement was declared effective by the Commission (the
"Effective Date"), and at all times subsequent to and including the Closing Date
and when any amendment or supplement to the Registration Statement or Prospectus
is filed with the Commission, the Registration Statement and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), did and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Rules, and did
not and will not 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. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is or was filed with
the Commission and at the Closing Date, the Prospectus did not and will not
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, in
the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, none of the representations and warranties in
this subsection shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon, and in
conformity with, information furnished to the Company in writing by the
Underwriter for use in the Registration Statement or the Prospectus.
(ii) The Registration Statement is effective under the 1933 Act and no stop
order preventing or suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or, to the Company's
knowledge, are threatened under the 1933 Act. Any
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required filing of the Prospectus pursuant to Rule 424(b) of the 1933 Act Rules
has been or will be made in the manner and within the time period required by
such Rule 424(b).
(iii) The documents incorporated by reference in the Registration Statement
and the Prospectus, at the time they became effective or were filed with the
Commission as the case may be, complied in all material respects with the
requirements of the 1933 Act or the 1934 Act, the 1933 Act Rules or the
published rules and regulations under the 1934 Act (the "1934 Act Rules"), as
applicable, and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and any further
documents so filed and incorporated by reference in the Registration Statement
and the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the 1933 Act or the 1934 Act, as applicable, and the 1933 Act
Rules or 1934 Act Rules, as applicable, and will not 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.
(iv) The accountants whose reports are filed with the Commission as a part
of, or incorporated by reference in, the Registration Statement, are and, during
the periods covered by their reports, were independent public accountants as
required by the 1933 Act and the 1933 Act Rules.
(v) The financial statements (including all notes and schedules thereto)
included or incorporated by reference in the Registration Statement and the
Prospectus comply in all material respects with the 1933 Act and present fairly
the financial position, the results of operations, the statements of cash flows,
and the statements of stockholders' equity and the other information purported
to be shown therein of the Company as of the dates indicated and for the periods
specified. Said financial statements and related notes and schedules have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis and the supporting schedules in the Registration Statement
and Prospectus present fairly the information required to be stated therein. The
summary and selected financial data included in the Prospectus present fairly
the information shown therein as at the respective dates and for the respective
periods specified and the summary and selected financial data have been
presented on a basis consistent with the consolidated financial statements so
set forth in the Prospectus.
(vi) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management, properties or
business prospects of the Company and its subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company or its subsidiaries, other than those
in the ordinary course of business, which are material with respect to the
Company or its subsidiaries, (C) there has been no change in the capital stock
or material increase in the short-term debt or long-term debt of the Company or
its subsidiaries and (D) there has been no dividend or distribution of any kind
declared, paid or made by the Company or its subsidiaries on any class of its
capital stock.
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(vii) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and Prospectus;
and, except as otherwise set forth in the Registration Statement and the
Prospectus, the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs, properties or business prospects
of the Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect"). Except as disclosed in the Prospectus, the Company has no obligation
to acquire any debt or equity securities of any corporation, partnership,
limited liability company, joint venture or other business enterprise.
(viii) Each of the Company's subsidiaries has been duly organized and is
validly existing as a corporation or limited liability company in good standing
under the laws of its jurisdiction of organization, with full corporate or
limited liability company power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and Prospectus; and, except as otherwise set forth in the Registration
Statement and the Prospectus, each of the Company's subsidiaries is duly
qualified as a foreign corporation or limited liability company to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a Material Adverse Effect. Except as described in the Prospectus,
all of the issued and outstanding shares of capital stock or other equity
securities of the Company's subsidiaries have been duly and validly authorized
and issued, are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien encumbrance or adverse
interest of any nature. Except as described in the Prospectus, there are no
outstanding subscriptions, rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock or
other equity securities of any of the Company's subsidiaries.
(ix) The Company has the authorized, issued and outstanding capitalization
set forth in the Prospectus. The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable. The Securities have been duly authorized for issuance and
sale to the Underwriter and, when issued and delivered by the Company in the
manner contemplated by this Agreement, will be validly issued and fully paid and
non-assessable The issuance of Securities pursuant to this Agreement is not
subject to preemptive or other similar rights. The Common Stock conforms in all
material respects to all statements relating thereto contained in the
Prospectus. The certificates for the Securities are in due and proper form. The
holders of the Securities will not be subject to personal liability by reason of
being such holders.
(x) This Agreement has been duly authorized, executed and delivered by the
Company.
(xi) Neither the Company nor any of its subsidiaries is in violation of any
term or provision of its charter or by-laws (or other equivalent organizational
documents) or in default in
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the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, loan agreement or note or in any
material contract, lease or other instrument to which it is a party or by which
it or any of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries may be bound, except for such defaults that
would not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect; the consummation of the transactions contemplated herein has
been duly authorized by the Company by all necessary corporate action and the
issuance, sale and delivery of the Securities and the execution, delivery and
performance of this Agreement by the Company will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries
or any applicable law, administrative regulation or administrative or court
decree, except in each case, for such conflicts, defaults or violations that
would not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xii) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is threatened; and the
Company is not aware of any existing or threatened labor disturbance by the
employees of any of its principal suppliers or distributors which might
reasonably be expected to result in any Material Adverse Effect.
(xiii) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries, which is required to be disclosed in the Registration
Statement and Prospectus (other than as disclosed therein), or which, considered
singly or in the aggregate, may reasonably be expected to have a Material
Adverse Effect, or which may materially or adversely affect the consummation of
this Agreement; all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement and Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material; and
there are no contracts or documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registration Statement by the
1933 Act which have not been so filed.
(xiv) The Company and each of its subsidiaries own or possess, or can
acquire on reasonable terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "intellectual
property") presently employed by them in connection with the business now
operated by them, except where failure to own or possess or have the ability to
acquire any such intellectual property would not reasonably be expected to have
a Material Adverse Effect. Neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in any Material
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Adverse Effect.
(xv) No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the sale of the Securities
hereunder, except such as may be required under the 1933 Act or state and
foreign securities laws, which qualification has been obtained.
(xvi) Except as otherwise set forth in the Registration Statement and the
Prospectus, the Company and each of its subsidiaries possess such material
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably be
expected to have a Material Adverse Effect.
(xvii) The Company and its subsidiaries have filed all Federal, state,
local and foreign tax returns that are required to be filed through the date
hereof, which returns are true and correct in all material respects, or have
received extensions thereof, and have paid all taxes shown on such returns and
all assessments received by them to the extent that the same are material and
have become due. There are no tax audits or investigations pending, that if
adversely determined would have a Material Adverse Effect; nor, to the knowledge
of the Company, are there any material proposed additional tax assessments
against the Company or any of its subsidiaries. The charges, accruals and
reserves on the books of the Company in respect of any income and corporation
tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy which would not have
a Material Adverse Effect.
(xviii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed
in accordance with management's general or specific authorization, (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization, and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) There are no holders of securities (debt or equity) of the Company,
or holders of rights, options or warrants to obtain securities of the Company,
who, by reason of the filing of the Registration Statement under the 1933 Act,
have the right to request the Company to register under the 1933 Act securities
held by them; and the Company has complied in all material respects with all of
the terms of any of their outstanding agreements relating to the rights of any
holder of securities to have securities registered under the Registration
Statement. Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of Common Stock or any
security convertible into or exchangeable or exercisable for any shares of
Common Stock.
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(xx) Except as described in the Prospectus, as of the date hereof, each of
the Company and its subsidiaries has (A) 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
the Company and its subsidiaries operate and (B) good and indefeasible title to
all other real property and other material properties and assets described in
the Prospectus as owned by the Company or such subsidiary and valid, subsisting
and enforceable leases for all of the properties and assets, real or personal,
described in the Prospectus as leased by them, in each case free and clear of
any security interests, mortgages, pledges, liens, encumbrances or charges of
any kind, other than those described in the Prospectus and those that could not,
individually or in the aggregate, have a Material Adverse Effect.
(xxi) Except as described in the Prospectus, as of the date hereof, (A) all
royalties, rentals, deposits and other amounts due on the oil and gas properties
of the Company and each of its subsidiaries have been properly and timely paid,
and no proceeds from the sale or production attributable to the oil and gas
properties of the Company and its subsidiaries are currently being held in
suspense by any purchaser thereof, except where such amounts due could not,
singly or in the aggregate, have a Material Adverse Effect and (B) there are no
claims under take-or-pay contracts pursuant to which natural gas purchasers have
any make-up rights affecting the interest of the Company or its subsidiaries in
its oil and gas properties, except where such claims could not, singly or in the
aggregate, have a Material Adverse Effect.
(xxii) As of the date hereof, the aggregate undiscounted monetary liability
of the Company and its subsidiaries for petroleum taken or received under any
operating or gas balancing and storage agreement relating to its oil and gas
properties that permits any person to receive cash or other payments to balance
any disproportionate allocation of petroleum could not, singly or in the
aggregate, have a Material Adverse Effect.
(xxiii) Except as disclosed in the Registration Statement and Prospectus,
the Company and each of its subsidiaries are in material compliance with all
applicable existing federal, state and local laws and regulations (including any
laws or regulations relating to Hazardous Material ("Environmental Laws")),
except where such noncompliance, singly or in the aggregate, would not have a
Material Adverse Effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental Law.
(xxiv) There is no alleged liability, or to the best knowledge and
information of the Company, potential liability (including, without limitation,
alleged or potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) of the Company or its subsidiaries arising out
of, based on or resulting from (A) the presence or release into the environment
of any Hazardous Material at any location at which the Company or any of its
subsidiaries has previously conducted
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or is currently conducting any business (whether or not owned or leased by the
Company) or has previously owned or currently owns any property, or (B) any
violation or alleged violation of any Environmental Law, (X) which alleged or
potential liability is required to be disclosed in the Registration Statement
and Prospectus, other than as disclosed therein, or (Y) which alleged or
potential liability, singly or in the aggregate, would have a Material Adverse
Effect.
(xxv) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws of any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect.
(xxvi) Holditch-Reservoir Technologies Consulting Services, whose report is
referenced in the Prospectus, was, as of the date of such report, and is, as of
the date hereof, an independent petroleum engineer with respect to the Company.
(xxvii) The Company is not, and after giving effect to the offering and
sale of the Common Stock and the application of proceeds therefrom as described
in the Prospectus, will not be an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act of 1940, as amended.
(xxviii) The Company maintains reasonably adequate insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the same or
similar businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by such other corporations.
(xxix) The Securities have been duly authorized for listing on the New York
Stock Exchange (the "NYSE"), subject to notice of official issuance.
(xxx) The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or the listing of the Common Stock on the NYSE, nor has the Company received
any notification that the Commission or the NYSE is contemplating terminating
such registration or listing.
(xxxi) The Company has furnished the Underwriter letters from each of the
executive officers and directors of the Company and from Mercury Exploration
Company and Quicksilver Energy, L.L.C., pursuant to which such persons have
agreed during a period of 90 days from the date hereof that, without the prior
written consent of the Underwriter, such persons will not sell, offer to sell,
contract to sell, or otherwise dispose of, directly or indirectly, any shares of
Common Stock, any other equity security of the Company, or any security
convertible into or exchangeable or exercisable for shares of Common Stock,
beneficially owned by such person or with respect to which such person has the
power of disposition ("Lock-Up Agreement").
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(xxxii) There is no contract or other document of a character required to
be described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.
(xxxiii) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or that has constituted, the stabilization or
manipulation of the price of any security of the Company.
(xxxiv) Except as disclosed in the Registration Statement and the
Prospectus, no transaction has occurred between or among the Company, on the one
hand, and any of its officers or directors or any affiliate or affiliates of any
such officer or director, on the other hand, that is required to be so
disclosed, including, but not limited to, any outstanding loans, advances or
guaranties of indebtedness by the Company to or for the benefit of any
affiliates of the Company, or any of the officers or directors of the Company,
or any family member of any of them.
(xxxv) The Company has not, directly or indirectly, at any time (A) made
any contributions to any candidate for foreign political office, or if made,
failed to disclose fully any such contribution made in violation of law, or (B)
made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments or contributions required or allowed by applicable law. The
company's internal accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
(xxxvi) The Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act.
(xxvii) (A) As of the date hereof, the aggregate market value of the Common
Stock held by non-affiliates, within the meaning of the 1933 Act, is greater
than $100 million and (B) the trading volume of Common Stock for the 365 day
period immediately preceding the date hereof exceeded 3,000,000 shares.
(b) Any certificate signed by an officer of the Company and delivered to
the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, 1,000,000 shares of Common Stock at a purchase price of $20.67 per
share.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriter to purchase up to 150,000 shares of
Common Stock at a purchase price of $20.67 per share. The option hereby granted
will expire 30 days after the date of this Agreement,
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and may be exercised in whole or in part (not more than once) only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Underwriter to the Company setting forth the number of Option Securities the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of payment (a "Date
of Delivery") shall be determined by the Underwriter, but shall not be later
than seven full Business Days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined, unless otherwise agreed
by the Underwriter and the Company.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the offices of McDonald Investments
Inc., XxXxxxxx Investment Center, Cleveland, Ohio or at such other place as
shall be agreed upon by the Underwriter and the Company, at 10:00 A.M. on the
fourth business day after the date of this Agreement, or such other time not
later than 10 business days after such date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being
herein called the "Closing Time"). In addition, in the event that any or all of
the Option Securities are to be purchased by the Underwriter, payment of the
purchase price for, and delivery of certificates for, such Option Securities
shall be made at the above-mentioned offices of McDonald Investments Inc., or at
such other place as shall be agreed upon by the Underwriter and the Company on
the Date of Delivery as specified in the notice from the Underwriter to the
Company. Payment shall be made to the Company by wire transfer of immediately
available funds to accounts designated by the Company, against delivery of the
Securities to the Underwriter. The certificates representing Securities shall be
in such denominations and registered in such names as the Underwriter may
request in writing at least two business days before the Closing Time. The
Securities will be made available for examination and packaging by the
Underwriter not later than 10:00 A.M. on the last business day prior to the
Closing Time at such place as the Underwriter may designate in Cleveland, Ohio.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) The Company shall prepare the Prospectus Supplement in a form approved
by the Underwriter and file such Prospectus Supplement 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.
(b) The Company will notify the Underwriter immediately, and confirm the
notice in writing, (i) when any amendment to the Registration Statement shall
become effective, (ii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or the
initiation of any proceedings for that purpose or the suspension of the
qualification of the Securities for offering or sale, in any jurisdiction, or
the threatening or initiation of any proceeding for that purpose and (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the initiation
or known threat of any proceeding for such purpose. Until the 90th day
immediately following the
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Closing Time, the Company shall not file any amendment to the Registration
Statement or supplement to the Prospectus or any document incorporated by
reference in the Registration Statement unless the Company has furnished the
Underwriter a copy for its review prior to filing and shall not file any such
proposed amendment or supplement to which the Underwriter reasonably objects.
The foregoing restriction on amendments or supplements shall apply indefinitely
to the Prospectus Supplement. The Company shall use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the 1933 Act and the 1933 Act Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the 1933 Act or the 1933 Act Rules,
the Company promptly shall prepare and file with the Commission an amendment or
supplement which shall correct such statement or omission or an amendment which
shall effect such compliance.
(d) The Company will deliver to the Underwriter and Xxxxxx & Xxxxxx L.L.P.,
counsel for the Underwriter, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) and will also deliver to
the Underwriter conformed copies of the Registration Statement as originally
filed and of each amendment thereto (without exhibits).
(e) The Company will furnish to the Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriter may reasonably request for the purposes
contemplated by the 1933 Act and the 1934 Act.
(f) If any event shall occur as a result of which counsel for the Company
and counsel for the Underwriter mutually agree that it is necessary to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
light of the circumstances existing at the time it is delivered to a purchaser
or if for any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the 1933 Act and the 1934 Act, the Company
will forthwith amend or supplement the Prospectus (in form and substance
mutually satisfactory to counsel for the Underwriter and counsel for the Company
and in compliance with the 1933 Act so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time it is delivered to a purchaser,
not misleading and will comply with the 1933 Act and the 1934 Act), and the
Company will furnish to the Underwriter a reasonable number of copies of such
amendment or supplement.
(g) The Company will cooperate with the Underwriter and its counsel to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Underwriter may reasonably designate and shall maintain
11
such qualifications in effect so long as required for the distribution of the
Securities; provided, however, that the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified.
(h) The Company will make generally available to its security holders an
earnings statement of the Company, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which earnings statement shall satisfy the
provisions of Section 11(a) of the 1933 Act and the rules and regulations of the
Commission (including Rule 158).
(i) If the Company elects to rely upon Rule 462(b), the Company shall both
file a 462(b) Registration Statement with the Commission in compliance with Rule
462(b) of the 1933 Act and pay the applicable fees in accordance with Rule 111
of the 1933 Act by the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act, will file all documents required to be filed with
the Commission pursuant to Sections 13, 14 or 15 of the 1934 Act within the time
periods required by the 1934 Act.
(k) The Company will effect the listing of the Common Stock issued and sold
pursuant to this Agreement on the NYSE.
(l) During the period of 90 days from the date hereof, the Company will
not, without the prior written consent of the Underwriter, (1) sell, offer to
sell, contract to sell, or otherwise dispose of, directly or indirectly, any
shares of Common Stock, any other equity security of the Company or any security
convertible into or exchangeable or exercisable for Common Stock (except for
shares of Common Stock issued pursuant to this Agreement, the grant of options
or the issuance of shares of Common Stock upon the exercise of outstanding
options under the Company's existing stock option plans or issuance of shares of
Common Stock upon the exercise of outstanding options held by director of the
Company) or (2) make any demand for or exercise any right with respect to the
registration of any shares of Common Stock or other such securities.
(m) The Company will apply the net proceeds from the offering of the
Securities in the manner set forth under "Use of Proceeds" in the Prospectus.
(n) The Company will use all commercially reasonable efforts to do and
perform all things required or necessary to be done and performed by it under
this Agreement prior to the Closing Time and will satisfy all conditions
precedent to the delivery of the Securities.
(o) The Company will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result, under the 1934 Act
or otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
SECTION 4. Payment of Expenses. The Company will pay, or reimburse if paid
by the
12
Underwriter, whether or not the transactions contemplated hereby are consummated
or this Agreement is terminated, all expenses incident to the performance of its
obligations under this Agreement, including (i) the printing and filing and
delivery to the Underwriter of copies of the Registration Statement as
originally filed and of each amendment thereto, during the period specified in
Section 3(e) hereof (excluding any fees, costs or expenses of counsel to the
Underwriter), (ii) the printing of this Agreement, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the Underwriter,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the fees and
reasonable disbursements of counsel for the Underwriter in connection therewith
and in connection with the preparation of a blue sky survey undertaken by the
Underwriter's counsel (the "Blue Sky Survey"), (vi) the review of the terms of
the public offering of the Securities by the NASD (including the filing fees
paid to the NASD in connection therewith) and the reasonable fees and
disbursements of counsel for the Underwriter in connection therewith, (vii) the
printing and delivery to the Underwriter of copies of the Registration Statement
as originally filed and each amendment thereto, of the preliminary prospectuses,
and of the Prospectus and any amendments or supplements thereto, (viii) the
printing and delivery to the Underwriter of the Blue Sky Survey, (ix) the fees
and expenses of the Company's transfer agent, and (x) the fees and expenses
incurred in connection with the listing of the Securities on NYSE.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the
Underwriter for all of its out-of-pocket expenses relating to the transactions
contemplated hereby, including the reasonable fees and disbursements of counsel
for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company of
its obligations hereunder, and to the following further conditions:
(a) No order preventing or suspending the use of any Prospectus shall have
been or shall be in effect and no order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of the Commission and the Underwriter. If the Company
has elected to rely upon Rule 430A, Rule 430A information previously omitted
from the effective Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the
prescribed time period and the Company shall have provided evidence satisfactory
to the Underwriter of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared effective
in accordance with the requirements of Rule 430A. If the Company has elected to
rely upon Rule 434, a term sheet shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) within the prescribed time period.
(b) At the Closing Time, there shall not have been, since the date hereof
or
13
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs, properties or
business prospects of the Company or any of its subsidiaries, whether or not
arising in the ordinary course of business, and the Underwriter shall have
received a certificate of the President of the Company and the chief financial
or chief accounting officer of the Company, dated as of the Closing Time, to the
effect that (A) there has been no such material adverse change, (B) the
representations and warranties in Section 1 are true and correct with the same
force and effect as though expressly made at and as of the Closing Time, (C) the
Company has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (D) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(c) The Underwriter shall have received, at the time this Agreement is
executed a signed letter from Deloitte & Touche, L.L.P. addressed to the
Underwriter and dated the date of this Agreement, in form and substance
previously approved by the Underwriter with respect to the financial statements
and certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus.
(d) At the Closing Time, the Underwriter shall have received:
(i) An opinion, dated the Closing Time, of Xxxxxx & Hanger, L.L.P.,
counsel for the Company, substantially in the form set forth in Annex I
attached hereto.
(ii) An opinion, dated the Closing Time of Xxxxxxx Xxxxx LLP, Canadian
counsel for the Company, substantially in the form set forth in Annex II
attached hereto.
(iii) An opinion, dated the Closing Time of Loomis, Ewert, Parsley,
Xxxxx & Gotting, P.C., Michigan counsel for the Company, substantially in
the form set forth in Annex III attached hereto.
(iv) An opinion, dated the Closing Time, of Xxxxxx & Xxxxxx L.L.P.,
counsel for the Underwriter, in form and substance reasonably satisfactory
to the Underwriters.
(e) At the time of the execution of this Agreement and at the Closing Time,
the Underwriter shall have received from Holditch-Reservoir Technologies
Consulting Services, independent petroleum engineers for the Company, in each
case in form and substance previously approved by the Underwriter, stating, as
of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified information with
respect to oil and gas reserves is given or incorporated in the Prospectus, as
of the date that is not more than five days prior to the date of such letter),
the conclusions and findings of such firm with respect to the Company's oil and
gas reserves.
(f) At the Closing Time, the Underwriter shall have received from Deloitte
&
14
Touche, L.L.P., independent certified public accountants, a letter, dated as of
Closing Time, to the effect that it reaffirms the statements made in the letter
furnished pursuant to subsection (c) of this Section, except that the specified
date referred to shall be a date not more than five days prior to the Closing
Time.
(g) At the Closing Time, the Underwriter shall have been furnished with
such documents and opinions as it may reasonably require for the purpose of
enabling counsel for the Underwriter to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Underwriter.
(h) At the time of the execution of this Agreement, the Underwriter shall
have received from each of the executive officers and directors of the Company
and from Mercury Exploration Company and Quicksilver Energy, L.L.C. a letter in
which each such person agrees during a period of 90 days from the date hereof,
that such person will not, without the prior written consent of the Underwriter,
(A) sell, offer to sell, contract to sell, or otherwise dispose of, directly or
indirectly, any shares of Common Stock, any other equity security of the Company
or any security convertible into or exchangeable or exercisable for shares of
Common Stock, beneficially owned by such person or with respect to which such
person has the power of disposition or (B) make any demand for or exercise any
right with respect to the registration of any shares of Common Stock or other
such securities.
(i) In the event that the Underwriter exercises its option provided in
Section 2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of the Date of Delivery and, at the Date of Delivery, the
Underwriter shall have received:
(i) A certificate, dated such Date of Delivery, of the President of
the Company and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(b) hereof remains true and correct as of such Date of
Delivery.
(ii) An opinion, dated such Date of Delivery, of Xxxxxx & Hanger,
L.L.P., counsel for the Company, substantially in the form set forth in
Annex I attached hereto.
(iii) An opinion, dated such Date of Delivery, of Xxxxxxx Xxxxx LLP
counsel for the Company, substantially in the form set forth in Annex II
attached hereto.
(iv) An opinion, dated the Closing Time of Loomis, Ewert, Parsley,
Xxxxx & Gotting, P.C., Michigan counsel for the Company, substantially in
the form set forth in Annex III attached hereto.
15
(v) An opinion, dated such Date of Delivery, of Xxxxxx & Xxxxxx
L.L.P., counsel for the Underwriters, in form and substance reasonably
satisfactory to the Underwriters.
(vi) A letter from Deloitte & Touche LLP, in form and substance
satisfactory to the Underwriter and dated the Date of Delivery,
substantially the same in form and substance as the letter furnished to the
Underwriter pursuant to Section 5(f) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(i)(v) shall be a
date not more than five days prior to the Date of Delivery.
(vii) A letter from Holditch-Reservoir Technologies Consulting
Services, in form and substance satisfactory to the Underwriter and dated
the Date of Delivery, substantially the same in form and substance as the
letter furnished to the Underwriter pursuant to Section 5(e) hereof, except
that the "specified date" in the letter furnished pursuant to this Section
5(i)(vi) shall be a date not more than five days prior to the Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriter by notice to the Company at any time at or prior to Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the 1933 Act, and each officer and director
of the Underwriter and any such controlling person to the extent and in the
manner set forth as follows:
(i) against any and all loss, liability, claim, damage, and expense,
joint or several, whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the 1933 Act, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation; or any investigation or proceeding by any
governmental agency or
16
body, commenced or threatened, or of any claim whatsoever based upon such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by the Underwriter), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
a governmental agency o body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply (A) to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Registration Statement or
Prospectus and (B) with respect to the Prospectus or any preliminary prospectus
to the extent that any loss, liability, claim, damage or expense results from
the fact that the Underwriter sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus (and any amendment or supplement thereto) in any case where such
delivery is required by the 1933 Act if the Company previously furnished copies
thereof to such Underwriter and the loss, liability, claim, damage or expense
results from an untrue statement or omission of a material fact contained in the
Prospectus or any preliminary prospectus which was corrected in the Prospectus
(or any amendment or supplement thereto).
(b) The Underwriter agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses (which fees and expenses shall be reasonable) of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances; provided, however, that if an indemnified party
shall have been
17
advised in writing by counsel selected to represent the indemnified parties that
an actual or potential conflict of interest exists between the position of that
indemnified party and other indemnified parties, the indemnified party in
question shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party, and the indemnifying
parties shall be responsible for the reasonable fees and expenses of such
separate counsel.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriter shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company and the Underwriter, as incurred, in such proportions
that the Underwriter is responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial public offering price appearing thereon and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls the Underwriter within the meaning of Section 15 of the 1933
Act, and each officer and director of the Underwriter and of any such control
person, shall have the same rights to contribution as the Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriter.
SECTION 9. Termination of the Agreement. (a) The Underwriter may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Registration Statement,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, or any
new outbreak of hostilities or material escalation thereof or other calamity or
crisis, the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in the Common Stock has been
suspended by the Commission, or if trading generally on the NYSE has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of the NYSE or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by federal, Texas, New York or Ohio authorities.
18
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4. Notwithstanding any such termination, the provisions of
Sections 6 and 7 shall remain in effect.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunications. Notices to the
Underwriter shall be directed to McDonald Investments Inc. at 0000 XxXxxxxx
Xxxxxxxxxx Xxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, attention:
Xxxxxxx X. Xxxxx, Managing Director, telecopy number (000) 000-0000, and notices
to the Company shall be directed to it at Quicksilver Resources Inc., 000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxx 00000, attention: Xxxxx Xxxxxx.,
President & CEO, telecopy number (000) 000-0000.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein and therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Underwriter and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 12. Governing Laws and Time. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Ohio without
giving effect to principles of conflict of laws. Specified times of day refer to
Cleveland Time. As used herein, the term "business day" means any day on which
the NYSE is open for business.
19
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriter and the Company in accordance with its terms.
Very truly yours,
QUICKSILVER RESOURCES INC.
By:/s/ Xxxx Xxxxxx
_____________________________________
Name: Xxxx Xxxxxx
Title:Executive Vice President
and Chief Financial Officer
CONFIRMED AND ACCEPTED
as of the date first above written:
MCDONALD INVESTMENTS INC.
By:/s/ Xxxxx X. Xxxxxx
________________________________
Name: Xxxxx X. Xxxxxx
Title: Sr. Vice President
20
Annex I
OPINION
(i) The Company is duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has the
organizational power and authority to own or lease its properties and to
conduct its business as described in the Prospectus, and to execute,
deliver and perform its obligations under the Underwriting Agreement.
(ii) The Company and each of its subsidiaries [If Michigan counsel is
willing to give then this can be deleted, but typically this is given by
relying on good standing certificates in foreign jurisdictions] is duly
qualified to do business and is in good standing in all jurisdictions where
it is required to be so qualified, except where the failure to be so
qualified would not individually or in the aggregate have a Material
Adverse Effect.
(iii) The authorized capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus.
All of the shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Securities have been duly authorized for issuance and
sale to the Underwriter pursuant to the Underwriting Agreement and, when
issued and delivered by the Company in the manner contemplated by the
Underwriting Agreement, will be validly issued, fully paid and
nonassessable. The sale of the Securities by the Company is not subject to
preemptive rights.
(iv) Except as disclosed in the Prospectus, all of the issued and
outstanding shares of capital stock (or any limited liability company
interests, as the case may be) of the Company's subsidiaries are owned by
the Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature. To such counsel's knowledge,
there are no outstanding options, warrants, or other rights to acquire
capital stock or other equity securities of any subsidiary of the Company.
(v) The Common Stock conforms to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(vi) No consent, approval, authorization or other order from, and no
filing with or notice to, any state or Federal regulatory body,
administrative agency, or other governmental authority, and, to our
knowledge, no filing with or notice to any other person or entity is
required for the due authorization, execution, delivery and performance by
the Company of the Underwriting Agreement.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds therefrom as
described in the Prospectus, will not be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
21
(vii) The execution and delivery by the Company of the Underwriting
Agreement and the performance of its obligations thereunder will not (A)
result in the violation of any statute or regulation, or any order or
decree of any court or governmental authority binding upon the Company or
its subsidiaries or their respective properties or (B) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or result in the creation of a lien under any of the
provisions of the Company's or any of its subsidiaries' charter or bylaws
or any indenture, mortgage, deed of trust, loan agreement or other
agreement that is material to the Company and its subsidiaries taken as a
whole.
(viii) The Registration Statement and the Prospectus and the documents
incorporated by reference therein comply as to form in all material
respects with the requirements of the 1933 Act or the 1934 Act, as
applicable, and the applicable rules and regulations thereunder (except for
the financial statements and the notes thereto, financial schedule,
statistical information and other financial and accounting data included
therein).
(ix) The statements contained in the Prospectus under the caption
"Description of Capital Stock" and Item 15 in part II of the Registration
Statement, insofar as they purport to summarize the legal matters,
documents or proceedings referred to therein, present fair summaries of
such matters, documents or proceedings, as the case may be.
(x) We do not know of any litigation or any governmental proceedings
or investigations, pending or threatened, required to be described in the
Prospectus that are not described as required, or of any contracts or other
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement that are not described and filed as required.
(xi) The Registration Statement has become effective under the
Securities Act of 1933; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to our knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending before or
threatened by the Commission.
We have not independently verified and are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or fairness
of the information contained in the Registration Statement and Prospectus.
Based upon discussions with officers, directors and employees of the
Company, no facts have come to our attention that cause us to believe that
the Registration Statement (except for the financial statements and the
notes thereto, financial schedules, statistical information and other
financial accounting data included therein, as to all of which we express
no view), at the time it became effective contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that
the Prospectus (with the foregoing exceptions), at such time or on the date
hereof included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
22
Annex II
(i) MGV Energy Inc. ("MGV") is duly organized, validly existing, and
in good standing under the laws of the Province of Alberta, and has the
organizational power and authority to own or lease its properties and to
conduct its business as described in the Prospectus.
(ii) MGV is duly qualified to do business and is in good standing in
all jurisdictions where it is required to be so qualified, except where the
failure to be so qualified would not individually or in the aggregate have
a Material Adverse Effect.
(iii) Except for MGV exchangeable shares referred to in the
Prospectus, all of the issued and outstanding shares of capital stock of
MGV have been duly and validly authorized and issued, are fully paid and
non-assessable and, are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature, of which such counsel is aware. To such counsel's knowledge, there
are no outstanding options, warrants, or other rights to acquire capital
stock or other equity securities of MGV.
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Annex III
(i) Each of __________ [the Company's Michigan subsidiaries] (the
"Michigan Subsidiaries") is duly organized, validly existing, and in good
standing under the laws of the State of Michigan, and has the
organizational power and authority to own or lease its properties and to
conduct its business as described in the Prospectus.
(ii) Each of the Michigan Subsidiaries is duly qualified to do
business and is in good standing in all jurisdictions where it is required
to be so qualified, except where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect.
(iii) Except as disclosed in the Prospectus, all of the issued and
outstanding shares of capital stock (or any limited liability company
interests, as the case may be) of the Michigan Subsidiaries have been duly
and validly authorized and issued, are fully paid and nonassessable and,
are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature. To such counsel's
knowledge, there are no outstanding options, warrants, or other rights to
acquire capital stock or other equity securities of any of the Michigan
Subsidiaries.
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