EXHIBIT 1.1
2,700,000 Shares
BASIN EXPLORATION, INC.
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
October 23, 1997
Xxxxxx Xxxxxx & Company, Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
Xxxxxx Xxxxxxx & Co., Inc.
Xxxxxxxx Xxxxxx Refsnes, Inc.
c/o Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Basin Exploration, Inc., a Delaware corporation (the "Company"), and
the Selling Stockholder named in Schedule II hereto ("Selling Stockholder")
propose, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 2,700,000 shares of common stock, par value $.01 per share
("Stock") of the Company ("Firm Shares"). The Firm Shares consist of
2,500,000 shares to be issued and sold by the Company and 200,000 outstanding
shares to be sold by the Selling Stockholder. In addition, the Company
proposes to issue and sell, at the option of the Underwriters, up to 375,000
additional shares of Stock and the Selling Stockholder proposes to sell, at
the option of the Underwriters, up to 30,000 additional shares of Stock, in
each case, solely to cover over-allotments ("Optional Shares"). The Firm
Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares."
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) The Company meets the requirements for use of Form S-3
and a registration statement on Form S-3 (File No. 333-36143) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission ("Commission"); the
Initial Registration Statement and any post effective amendment thereto,
each in the form hereto delivered to each of the Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities
Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to such registration statement or
document incorporated by reference therein (other than Forms 8-K filed
and certain ancillary documents copies of which have been provided to
you) has heretofore been filed or transmitted for filing with the
Commission (other than prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act, each in the form
heretofore delivered to the Underwriters); and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as
amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; the base prospectus dated October 2, 1997, as supplemented
by the prospectus supplement relating to the Shares, in the form in
which it was first used to confirm sales, is referred to as the
"Prospectus"; any reference herein to any Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Prospectus; any reference to any amendment or supplement to any
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Prospectus under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Prospectus; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any report or schedule
of the Company filed pursuant to Sections 13(a) or 15(d) of the Exchange
Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement;
(ii) The documents incorporated by reference in the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the Act, the
Rules and Regulations, the Exchange Act and the rules and regulations
thereunder (the "Exchange Act Rules and Regulations"), as applicable;
no such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, 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
Act, the Rules and Regulations, the Exchange Act and the Exchange Act
Rules and Regulations, 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, in
light of the circumstances under which they were made, not misleading;
(iii) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement
or the Prospectus
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will conform, in all material respects to the requirements of the 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, in
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this
paragraph (iii) shall not apply to statements or omissions in the
Registration Statement or Prospectus (or any supplement or amendment to
either) made in conformity with information relating to any Underwriter
furnished in writing to the Company by or on behalf of any Underwriter
through Xxxxxx Xxxxxx expressly for use therein;
(iv) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the requirements of the Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations, and present
fairly the consolidated financial condition of the Company and its
subsidiaries as of the respective dates thereof and the consolidated
results of operations and cash flows of the Company and its subsidiaries
for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the
Company are required by the Act or the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations to be included
in the Prospectus; all selected financial, operating and statistical
data set forth in the Prospectus under the captions "Prospectus
Supplement Summary," "Selected Historical Financial Information,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business and Properties" and elsewhere in
the Prospectus are, in all material respects, fairly presented and
prepared on a basis consistent with such financial statements and the
books and records of the Company;
(v) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences;
(vi) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to each
Time of Delivery (as defined in Section 4(a)), except as set forth in or
contemplated by the Registration Statement and the Prospectus (i)
neither the Company nor any of its subsidiaries has sustained 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, and
(ii) there has not been any change in the capital stock or long-term
debt of the
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Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries;
(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 assets and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is either in good standing under the laws of
each jurisdiction in which the properties owned or leased by it or the
character of the business conducted by it requires such qualification or
is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each direct or
indirect subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, has power and authority to own, lease and
operate its assets and conduct its business, and has been duly qualified
for the transaction of business and is either in good standing under the
laws of each jurisdiction in which the properties owned or leased by it
or the character of the business conducted by it requires such
qualification or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(viii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholder)
have been duly and validly authorized and issued, are fully paid and
non-assessable, are not subject to any preemptive or similar rights and
conform in all material respects to the description of the Stock
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, are fully paid and non-assessable and (except as
described in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(ix) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued and fully paid and non-assessable, will be
free and clear of any lien, encumbrance or claim by any third party,
will not be subject to any preemptive or similar rights and will conform
in all material respects to the description of the Stock contained in
the Prospectus; Except as set forth in the Prospectus, the Company does
not have outstanding, and at the Time of Delivery will not have
outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell any shares of Stock, any
shares of capital stock of any subsidiary or any such warrants,
convertible securities or obligations; there are no restrictions upon
the voting or transfer of the Shares (other than with respect to an
"Interested Shareholder," if any, as defined in the Company's
Certificate of Incorporation, as amended (the "Certificate of
Incorporation")); the Shares are eligible for trading on the National
Association of Securities Dealers Automated Quotations National Market
System (the "Nasdaq National Market");
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(x) The issue and sale of the Shares to be sold by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the
creation of any lien, charge or encumbrance on any material property or
assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the material 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 Certificate of Incorporation, or
Bylaws ("Bylaws") of the Company 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
material properties, except for breaches, violations or defaults that
would not, individually or in the aggregate, have a material adverse
effect on the financial condition, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"); and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration of the Shares
under the Act, filings under the Exchange Act, filings required by the
Nasdaq National Market and as may be required under the securities or
"Blue Sky" laws of certain jurisdictions and the bylaws and rules of
the National Association of Securities Dealers, Inc. ("NASD") in
connection with the purchase and distribution by the Underwriters of the
Shares;
(xi) As of the date hereof, and at each Time of Delivery, neither
the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or other organizational
documents or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, except breaches, violations or defaults that
would not have a Material Adverse Effect; each of the Company and its
subsidiaries is in possession of and operating in compliance in all
material respects with all leases, concessions, franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and
orders required for the conduct of its business as described in the
Prospectus, all of which are valid and in full force and effect other
than those which could not, singly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such lease, concession, franchise, grant,
authorization, license, permit, easement, consent, certificate or order
which, individually or in the aggregate, if subject to an unfavorable
decisions, would result in a Material Adverse Effect;
(xii) The Company has full corporate power and authority to enter
into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company;
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(xiii) The statements incorporated by reference to the Company's
Form 8-A regarding the description of the Company's stock, insofar as
they purport to constitute a summary of the terms of the Stock are
accurate and complete;
(xiv) Except as otherwise set forth in the Prospectus or such as
are not material to the financial condition, business, properties,
prospects or results of operations of the Company, taken as a whole, the
Company has title to its properties as follows: (i) with respect to its
xxxxx (including leasehold interests and appurtenant personal property),
such title is free and clear of all liens, claims, encumbrances and
restrictions, except liens for taxes not yet due and payable, and other
defects reasonably acceptable to a prudent owner or purchaser of
producing oil and gas properties; (ii) with respect to its non-producing
oil and gas properties (including undeveloped locations on leases held
by production and those leases not held by production, but excluding
exploration prospects not situated offshore in state or federal waters),
such title, to the knowledge of the Company, is free and clear of all
liens, claims, encumbrances and restrictions except for matters expected
to be cured in the ordinary course prior to drilling; (iii) with respect
to its non-producing properties in exploration prospects not situated
offshore in state or federal waters, such title was investigated in
accordance with customary industry procedures prior to the Company's
acquisition thereof; (iv) with respect to its real property other than
oil and gas interests, such title is good and marketable; and (v) with
respect to its personal property other than that appurtenant to its oil
and gas interests, such title is free and clear of all liens, claims,
encumbrances and restrictions;
(xv) Except as described in the Prospectus or except for amounts
or claims which would not have a Material Adverse Effect, as of the date
hereof, (i) all royalties, rentals, deposits and other amounts due on
the oil and gas properties of the Company and 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, and (ii) 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 and its subsidiaries in its oil
and gas properties;
(xvi) As of the date hereof, the aggregate undiscounted monetary
liability of the Company and its subsidiaries for oil or natural gas
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 any portion of the interest of the Company or any of its
subsidiaries in oil or natural gas or to receive cash or other payments
to balance any disproportionate allocation of oil or natural gas could
not have a Material Adverse Effect;
(xvii) Other than as set forth in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending or, to the
Company's knowledge, threatened against or affecting the Company or any
of its subsidiaries or any of their respective officers, directors or
partners in their capacity as such, before or by any Federal, state or
local court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect;
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(xviii) The Company is not and, after giving effect to the offering
and sale of the Shares, 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 (the
"Investment Company Act");
(xix) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(xx) Xxxxxx Xxxxxxxx L.L.P., who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the Rules and Regulations;
(xxi) The factual information underlying the estimates of the
reserves of the Company and its subsidiaries, which was supplied by the
Company to Xxxxx Xxxxx & Company ("Xxxxx Xxxxx"), independent
petroleum engineers, and Netherland Xxxxxx & Associates, Inc.
("Netherland Xxxxxx") for purposes of preparing the reserve
information referenced in the Prospectus (the "Reserve Information"),
including, without limitation, production, volumes, sales prices for
production, contractual pricing provisions under oil or gas sales or
marketing contracts under hedging arrangements, incurred costs of
operations and development, and working interest and net revenue
information relating to the Company's ownership interests in properties,
was true and correct in all material respects on the date of such
Reserve Information; the estimates of future capital expenditures and
other future exploration and development costs supplied to Xxxxx Xxxxx
and Netherland Xxxxxx were prepared in good faith and with a reasonable
basis; the information provided by Xxxxx Xxxxx and Netherland Xxxxxx for
purposes of preparing the Reserve Information was prepared in accordance
with customary industry practices; Xxxxx Xxxxx and Netherland Xxxxxx
were, as of the date of the Reserve Information prepared by each of
them, and are, as of the date hereof, independent petroleum engineers
with respect to the Company; other than normal production of the
reserves, intervening spot market product price fluctuations and other
factors described under "Risk Factors" in the Prospectus, the Company
is not aware of any facts or circumstances that would result in a
materially adverse change in the reserves in the aggregate, or the
aggregate present value of future net cash flows therefrom, as described
in the Prospectus and reflected in the Reserve Information; estimates of
such reserves and the present value of the future net cash flows
therefrom as described in the Prospectus and reflected in the Reserve
Information comply in all material respects to the applicable
requirements of Regulation S-X and Industry Guide 5 under the Act;
(xxii) The Company and its subsidiaries (A) are in compliance with
any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or waste, pollutants or contaminants
("Environmental Laws"), (B) have received all permits, licenses or
other approvals required under applicable Environmental Laws to conduct
their respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license or approval, except for such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits,
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licenses or approvals that would not, singularly or in the aggregate,
have a Material Adverse Effect. There has been no storage, disposal,
generation, transportation, handling or treatment of hazardous
substances or solid wastes by the Company or its subsidiaries (or to the
knowledge of the Company and its subsidiaries, any of their respective
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or any subsidiary in violation
of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action by the Company
or any subsidiary under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which has already been remedied, has been assumed by a third
party, or which would not result in, or which would not be reasonably
likely to result in, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment
surrounding such property of any solid wastes or hazardous substances
due to or caused by the Company or any subsidiary, except for any such
spill, discharge, leak, emission, injection, escape, dumping or release
which has already been remedied, has been assumed by a third party, or
which would not result in or would not be reasonably likely to result
in, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escape, dumping or releases, a Material
Adverse Effect; and the terms "hazardous substances" and "solid
wastes" shall have the meanings specified in any currently applicable
local, state and federal laws or regulations with respect to
environmental protection;
(xxiii) There are no persons with registration or similar rights to
require registration of any securities of the Company under the Act
because of the filing of the Registration Statement or the sale of the
shares by the Company to the Underwriters, other than such rights as are
described or incorporated into the Prospectus and have been duly and
effectively waived;
(xxiv) The Company and its subsidiaries and their respective
directors, officers or controlling persons have not taken, directly or
indirectly, any action intended, or which might reasonably be expected,
to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares in
violation of the Exchange Act and the Exchange Act Rules and
Regulations; and
(xxv) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(b) The Selling Stockholder represents and warrants to, and agrees with,
the Underwriters that:
(i) except as required by the Act or state securities or Blue Sky
laws, all consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and for the sale and delivery of the Shares to by sold by the Selling
Stockholder have been obtained;
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the Selling Stockholder has full power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder; and this Agreement has been
duly authorized, executed and delivered by such Selling Stockholder;
(ii) subject to consents which have been or will be obtained by
the Time of Delivery, the execution delivery and performance of this
Agreement by the Selling Stockholder, the sale of the Shares 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
terms or provisions of, or constitute a default under, any mortgage,
indenture, 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, or any statute or any order, rule
or regulation of any court or governmental authority having jurisdiction
over the Selling Stockholder, except for any breach, violation or
default which is not material.
(iii) at the Time of Delivery of the Shares, the Selling
Stockholder will have good and valid title to the Shares to be sold by
the Selling Stockholder free and clear of all liens, encumbrances,
equities or claims (other than the interests of the Underwriters under
this Agreement); and, upon delivery of such Shares and payment therefore
pursuant to this Agreement, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will pass to
the Underwriters;
(iv) for a period of 90 days after the date hereof, the Selling
Stockholder shall not, and shall not permit its affiliates to, offer,
pledge, sell, contract to sell, directly or indirectly, any shares of
Stock or any security convertible into or exchangeable for Stock,
without the prior written consent of Xxxxxx Xxxxxx & Company, Inc.
("Xxxxxx Xxxxxx"); provided, however, that (1) the Selling Stockholder
may transfer Stock to the Company to extinguish indebtedness of the
Selling Stockholder to the Company; (2) and the Selling Stockholder may
make of gift of Stock to one or more persons provided such person
agrees, in writing, not to re-sell such shares until 90 days following
the date of the Agreement without the prior written consent of Xxxxxx
Xxxxxx.
(v) the Selling Stockholder does not have any knowledge, following
a reasonable investigation, that the Registration Statement or the
Prospectus (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to made the statements therein not
misleading, and
(vi) 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 reasonable be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares in violation of
the Exchange Act or the Exchange Act Rules and Regulations.
2. (a) Subject to the terms and conditions herein set forth, (i) the
Company agrees to sell 2,500,000 Firm Shares, (ii) the Selling Stockholder
agrees to sell 200,000 Firm Shares and (iii) each of the Underwriters agrees,
severally and not jointly, agrees to
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purchase from each of the Company and the Selling Stockholder, at a purchase
price per share of $17.49 the number of Firm Shares (subject to such
adjustment to eliminate fractional shares as the Underwriters may determine)
which bears the same proportion to the total Firm Shares to be sold by the
Company or the Selling Stockholder as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares.
(b) The Company hereby grants to the Underwriters the right to
purchase at their election up to 375,500 Optional Shares, and the Selling
Stockholder hereby grants the Underwriters the rights to purchase at their
election up to 30,000 Optional Shares, in each case, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from the Underwriters
to the Company and the Selling Stockholder, given within a period of 30
calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by the Underwriters
but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless the Underwriters and the Company and the Selling
Stockholder otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
In the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares, (i)(1) the Company shall issue and sell
to the Underwriters a number of Optional Shares equal to the number of shares
with respect to which the option is exercised multiplied by 0.925925 (subject
to such adjustments to eliminate fractional shares as the Underwriters may
determine) and (2) the Selling Stockholder shall sell to the Underwriters a
number of Optional Shares equal to the number of shares with respect to which
the option is exercised minus the number of shares the Company is required to
issue and sell under paragraph (i)(1) and (ii) the Underwriters, severally
and not jointly, shall purchase from each of the Company and the Selling
Stockholder, at the purchase price provided in paragraph 2(a) above, a number
of Optional Shares (subject to such adjustments to eliminate fractional
shares as the Underwriters may determine) which bears the same proportion to
the total number of Optional Shares to be sold by the Company or the Selling
Stockholder as the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereto bears to the total number of Firm Shares.
3. Upon the authorization by the Company of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxx Xxxxxx may request upon at least forty-eight hours' prior
notice to the Company shall be delivered at the Time of Delivery (as defined
below) by or on behalf of the Company to Xxxxxx Xxxxxx for the account of
such Underwriter, against payment therefor by certified or official bank
checks payable in New York Clearing House (next-day) funds to the order of
the Company. The Company will cause the certificates representing the Shares
to be made available for checking and packaging at least twenty-four hours
prior to the Time of Delivery with respect thereto at the office of Xxxxxx
Xxxxxx, 00 X. Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 (the "Designated
Office"). The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 8:30
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a.m., Central daylight time on October 29, 1997 or such other time and date
as Xxxxxx Xxxxxx and the Company may agree in writing, and with respect to
the Option Shares, 8:30 a.m., Central daylight time, on the date specified by
Xxxxxx Xxxxxx in the written notice given by Xxxxxx Xxxxxx of the
Underwriters' election to purchase such Optional Shares, or such other time
and date as Xxxxxx Xxxxxx and the Company may agree upon in writing. Such
time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Shares,
if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a
"Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents reasonably
requested by the Underwriters pursuant to Section 7(k) hereof will be
delivered at the offices of Xxxxx, Xxxxxx & Xxxxxx LLP (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all
at the Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., Mountain time, on the business day next preceding Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "business day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters as follows:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the
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
Act; to prepare and file with the Commission, promptly upon the Underwriters'
request, any amendments of or supplements to the Registration Statement or
Prospectus which, in the Underwriters' reasonable opinion, may be necessary
or advisable in connection with the distribution of the Shares; to make no
further amendment or any supplement to the Registration Statement or
Prospectus or file any document under the Exchange Act before the termination
of the offering of the Shares by the Underwriters if such document would be
deemed to be incorporated by reference into the Prospectus which shall be
reasonably disapproved by the Underwriters promptly after reasonable notice
thereof; to advise the Underwriters, 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 Underwriters with copies
thereof; to advise you, 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 Prospectus, of the
suspension of the qualification of the Shares 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 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
Prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
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(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such United States and Canadian jurisdictions as you 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 Shares, provided that in connection
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;
(c) Prior to 9:00 a.m., Central time, on the business day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in such quantities as you may from
time to time reasonably request, and, if the delivery of a Prospectus is
required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the Shares
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 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 during such period to amend or
supplement the Prospectus in order to comply with the Act or to file under
the Exchange Act any document which would be deemed to be incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange
Act, to notify you and amend the Registration Statement, supplement the
Prospectus or file such document and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any Underwriter
is required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) If the Company elects to rely upon Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the Act by the earlier of (i) 10:00 p.m., Washington, D.C. time,
on the date of this Agreement, or (ii) the time that confirmation are given
or sent, as specified by Rule 462(b)(2);
(e) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
Effective Date (as defined in Rule 158(c) under the Act), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(f) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to equity
-12-
incentive plans, warrants or rights existing on the date of this Agreement),
without the prior written consent of Xxxxxx Xxxxxx;
(g) To furnish to its stockholders as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters
of each fiscal year (beginning with the first such fiscal quarter ending
after the Effective Date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such quarter in
reasonable detail;
(h) During a period of five years from the Effective Date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver
to you as soon as they are available, copies of any reports and financial
statements furnished to or filed on a non-confidential basis with the
Commission or any national securities exchange on which any class of
securities of the Company is listed;
(i) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds"; and
(j) To use its best efforts to list for quotation the Shares on
the Nasdaq National Market.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid, the following:
(a) The fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Shares under the
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, Preliminary Prospectus and Prospectus
and amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters and dealers;
(b) The cost of printing or reproducing any Agreement Among
Underwriters, this Agreement, and closing documents (including any
compilations thereof) in connection with the offering, purchase, sale and
delivery of the Shares;
(c) All fees and expenses in connection with listing the Shares on
the Nasdaq National Market;
(d) The filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, securing any required review
by the NASD of the terms of the sale of the Shares;
(e) The cost of preparing stock certificates;
(f) The cost and charges of any transfer agent or registrar; and
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(g) All other costs and expenses incident to the performance of
the Company's obligations hereunder, including any fees in connection with
the sale of the Shares in any of the provinces of Canada, which are not
otherwise specifically provided for in this Section.
It is understood, that except as provided in this Section, and Sections
8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale
of any of the Shares by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements
of the Company herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company shall have performed in all material
respects all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective not later than
the earlier of (x) 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; or (y) at such later date and time as may be approved by a
majority in interest of the Underwriters; 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 all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxx & Xxxxxx, L.L.P., counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to such matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx Xxxxxx, Esq., Vice President - General Counsel of the
Company, shall have furnished to you in his capacity as Vice President -
General Counsel, his written opinion, dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly qualified as a foreign corporation
for the transaction of business in, and is either in good standing under
the laws of, each jurisdiction in which the properties owned or leased
by it or the character of the business conducted by it requires such
qualification or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction;
(ii) Each direct or indirect subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation or is duly
formed and validly existing as a general or limited partnership under
the laws of its state of formation, as the case may be, has power and
authority to own, lease and operate its assets and
-14-
conduct its business as described in the Prospectus, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the nature of its activities requires such
qualification; all of the issued shares of capital stock of, or
partnership or other equity ownership interest in, each such subsidiary
has been duly and validly authorized and issued, are fully paid and
non-assessable, and (except as described in the Prospectus) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental actions,
suits or proceedings pending or threatened against or affecting the
Company or any of its subsidiaries, or any of their respective officers,
directors or partners in their capacity as such, before or by any
Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect;
(iv) Except for consents that have been or will be obtained prior
to the Time of Delivery, the issue and sale of the Shares being
delivered at such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
of any lien, charge or encumbrance on any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement, note, lease 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 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 Certificate of
Incorporation or By-laws of the Company 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, other than any breach,
violation or default which would not have a Material Adverse Effect;
(v) All contracts and agreements summarized in the Registration
Statement and the Prospectus (other than oil and gas leases and other
oil and gas property interests) are, to the extent summarized therein,
fairly summarized therein, conform in all material respects to the
descriptions thereof contained therein, and, to the extent such
contracts or agreements or any other material agreements are required
under the Act or the Rules and Regulations thereunder to be filed as
exhibits to the Registration Statement, they are so filed; and such
counsel does not know of any contracts or other documents required to be
summarized or disclosed in the Prospectus (or required to be filed under
the Exchange Act if upon such filing they would be incorporated, in
whole or in part, by reference therein) or to be so filed as an exhibit
to the Registration Statement, which have not been so summarized,
disclosed or filed;
(vi) The statements incorporated by reference to the
Company's Form 8-A into the Prospectus with respect to the description
of the Company's capital
-15-
stock, insofar as they purport to constitute a summary of the terms of
the Stock, are accurate and complete;
(vii) Such counsel has no reason to believe that the Registration
Statement or any amendment or supplement thereto, at the time such
Registration Statement or amendment or supplement became effective, or
the Prospectus or any amendment or supplement thereto (including any
document filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus or any amendment or supplement thereto),
as of its date and as of each Time of Delivery, contained or 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, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion as to the financial statements and schedules of financial,
statistical and reserve data contained in the Registration Statement,
the Prospectus or the documents incorporated by reference therein);
(d) Xxxxx, Xxxxxx & Xxxxxx LLP shall have furnished to you their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own, lease and operate
its assets and conduct its business as described in the Prospectus;
(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 and are fully paid
and non-assessable; and the capital stock of the Company conforms in all
material respects as to the legal matters to the description of the Stock
incorporated by reference from the Company's Form 8-A into the
Prospectus; the Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefore as provided herein, will
be duly and validly issued and fully paid and non-assessable, free and
clear of all liens, encumbrances, equities or claims will not be subject
to any preemptive or similar right, and will conform in all material
respects to the description of the Stock incorporated by reference into
the Prospectus;
(iii) The Company has full corporate power and authority to enter
into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except
the registration under the Act of the Shares, filing under the Exchange
Act, or filing required by the Nasdaq National Market and as may be
required under the securities or "Blue Sky" laws of certain
jurisdictions and such consent as may be required under the bylaws and
-16-
rules of the NASD in connection with the purchase and distribution of
the Shares by the Underwriters;
(v) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(vi) To the best of such counsel's knowledge, except as have been
waived at the Time of Delivery, there are no persons with registration
or similar rights to have any securities of the Company registered
pursuant to the Registration Statement;
(vii) The Registration Statement is effective under the Act and,
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
and
(viii) Such counsel (A) is of the opinion that the Registration
Statement and the Prospectus and any amendment or supplement thereto
(including any document incorporated by reference into the Prospectus),
as of their respective effective dates and as of each Time of Delivery,
complied in all material respects with the requirements of the
Securities Act, the Rules and Regulations, the Exchange Act and the
Exchange Act Rules and Regulations (it being understood that such
counsel need express no opinion as to the financial statements and
schedules or financial, statistical and reserve data contained in the
Registration Statement, the Prospectus or the documents incorporated by
reference therein), and the conditions for use of Form S-3, set forth in
the General Instructions thereto, have been satisfied; and (B) has no
reason to believe that the Registration Statement or any amendment or
supplement thereto, at the time such Registration Statement or amendment
or supplement became effective, or the Prospectus or any amendment or
supplement thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus or any
amendment or supplement thereto), as of its date and as of each Time of
Delivery, contained or 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, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no opinion as to the financial statements and
schedules of financial, statistical and reserve data contained in the
Registration Statement, the Prospectus or the documents incorporated by
reference therein).
(e) Xxxxx, Xxxxxx & Xxxxxx LLP shall have furnished to you their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) the Selling Stockholder has full power and authority to enter
into this Agreement and to sell the Shares to be sold by the Selling
Stockholder to the Underwriters; this Agreement has been duly
authorized, executed and delivered by the Selling Stockholder;
-17-
(ii) to the best of such counsel's knowledge, after due inquiry,
the execution, delivery and performance of this Agreement by the Selling
Stockholder, compliance by the Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the securities or Blue Sky
laws of the various states) and, except for consents that have been or
will be obtained before the Time of Delivery, will not conflict with or
constitute a breach of any of the terms or provision of, or a default
under, any loan agreement, mortgage, lease or other agreement or
instrument that is material to the Selling Stockholder to which he is a
party or by which his assets are bound, or violate of conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or governmental body or agency having jurisdiction over the
Selling Stockholder or his property, except for violations that are not
material; and
(iii) The Selling Stockholder has good title to the Shares to be
sold by him and upon delivery of certificates representing such Shares
pursuant hereto, and payment for such Shares, good and clear title to
such Shares will pass to the Underwriters, free and clear of any liens,
claims and encumbrances whatsoever.
(f) On the date of the Prospectus, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery, Xxxxxx Xxxxxxxx
L.L.P. shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance reasonably satisfactory to
you, to the effect set forth in Annex I hereto;
(g) Xxxxx Xxxxx and Netherland Xxxxxx, such firms constituting
independent petroleum engineering consultants, shall have delivered to you on
the date of this Agreement a letter (the "Reserve Letter") and also at each
Time of Delivery a letter dated the date of such Time of Delivery, in each
case in form and substance reasonably satisfactory to you, 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 the oil and gas reserves is given or incorporated in the
Prospectus as of the date not more than five days prior to the date of such
letter), the conclusions and findings of such firm with respects to the oil
and gas reserves of the Company.
(h) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference 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, and (ii) since the respective dates as of
which information is given or incorporated by reference in the Prospectus
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 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 reasonable judgment of the
Underwriters so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
-18-
the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(i) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq National
Market; (ii) a suspension or material limitation in trading in the Company's
securities on the Nasdaq National Market; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York or
Tennessee state authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the reasonable judgment of the Underwriters
makes it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(j) The Shares at such Time of Delivery shall have been duly
listed for quotation on the Nasdaq National Market; and
(k) The Company shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of the Company,
reasonably satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other matters
as you may reasonably request, and the Company shall have furnished or caused
to be furnished certificates as to the matters set forth in subsections (a)
and (h) of this Section.
(l) The Selling Stockholder shall have furnished to you at such
Time of Delivery a certificate, satisfactory to you as to the accuracy of the
representations and warranties of the Selling Stockholder herein at and as of
such Time of Delivery, as to performance by the Selling Stockholder of all of
his obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request.
8. (a) The Company and, with respect to subparagraph (i) of this
Section 8(a) only, the Selling Stockholder will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities to which
such Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, any preliminary prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (ii) any untrue statement
or alleged untrue statement made by the Company in Section 1(a) of this
Agreement and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company and the Selling Stockholder shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any preliminary prospectus or any such amendment or
-19-
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Xxxxxx Xxxxxx expressly
for use therein; provided however, that the Company and the Selling
Stockholder shall not be liable if such loss, claim, damage, liability or
judgment arises out of, or is based upon, an untrue statement or omission or
alleged untrue statement or omission in a preliminary prospectus if the
Prospectus corrects the untrue statement or omission or the alleged untrue
statement or omission which is the basis of the loss, claim, damage,
liability or judgment for which indemnification is sought and a copy of the
Prospectus was not sent or given (where such delivery is required by the Act)
at or before the confirmation of the sale to the person who received a
preliminary prospectus and who is asserting such loss, claim, damage,
liability or expense, unless such failure to deliver a Prospectus resulted
from noncompliance by the Company with Section 5(c) hereof. Notwithstanding
the foregoing, the aggregate liability of the Selling Stockholder pursuant to
the provisions of this paragraph shall be limited to an amount equal to the
aggregate purchase price received by the Selling Stockholder from the sale of
the Shares hereunder. Notwithstanding anything in the foregoing to the
contrary, the Company, the Selling Stockholder and the Underwriter
indemnified parties agree that to the extent the Underwriter indemnified
parties seek indemnification pursuant to this Section 8(a), the Company shall
first be liable to the Underwriter indemnified parties and to the extent
payments made by the Company to the Underwriter indemnified parties as a
result of such indemnification are inadequate to satisfy in full any claim
which the Underwriter indemnified parties may have against the Company or the
Selling Stockholder under this Section 8(a), then the Selling Stockholder
shall be liable hereunder, subject to the limitations set forth in the
immediately preceding sentence, it being understood that the Underwriter
indemnified parties shall not be required to enforce their rights hereunder
in separate proceedings. The foregoing indemnity agreement is in addition to
any liability which the Company or the Selling Stockholder may otherwise have
to any Underwriter indemnified party.
The Company also agrees to indemnify and hold harmless the Selling
Stockholder from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omissions to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused
by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Selling Stockholder furnished
in writing to the Company by or on behalf of such Selling Stockholder
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
and the Selling Stockholder against any losses, claims, damages or
liabilities to which the Company or the Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Prospectus, any preliminary prospectus or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, any preliminary
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prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Xxxxxx Xxxxxx, expressly for use therein; and will
reimburse the Company or the Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) and (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under such subsection. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) and (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the
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offering (before deducting expenses) received by the Company or the Selling
Stockholder (as the case may be) bear to the total underwriting discounts and
commissions received by the Underwriters, 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, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Selling Stockholder on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were 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
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include 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 subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint. Notwithstanding the foregoing, the
aggregate liability of the Selling Stockholder pursuant to the provisions of
this Section 8(d) shall be limited to an amount equal to the aggregate
purchase price received by the Selling Stockholder from the sale of his
Shares hereunder.
(e) The obligations of the Company and the Selling Stockholder
under this Section 8 shall be in addition to any liability which the Company
and the Selling Stockholder may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
(including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery
the Underwriters (other than the defaulting Underwriter) may in their
discretion arrange for the Underwriters or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the other Underwriters do not
arrange for the purchase of such Shares, then the Company and the Selling
Stockholder shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to such
Underwriters to purchase such Shares on such terms. In the event that, within
the respective prescribed periods, such Underwriters notify the Company that
such Underwriters have so arranged for the
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purchase of such Shares, or the Company notifies such Underwriters that it
has so arranged for the purchase of such Shares, the Underwriters or the
Company shall have the right to postpone the Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement
with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by the other
Underwriters, the Company and the Selling Stockholder as provided in
subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-tenth of the aggregate number of all the
Shares to be purchased at such Time of Delivery, then the Company and the
Selling Stockholder shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters, the Company and the Selling Stockholder as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-tenth of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Company and the
Selling Stockholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except
as provided in Sections 6 and 8 hereof; but, if for any other reason any
Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters for all out-of-pocket expenses
approved in writing by Xxxxxx Xxxxxx, including fees and
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disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, Xxxxxx Xxxxxx shall act on behalf of
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by Xxxxxx Xxxxxx.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Xxxxxx & Company, Inc., 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx Xxxxxx; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company set forth in the Registration Statement,
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company by Xxxxxx Xxxxxx on request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter,
and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. Except as provided
in Section 4 hereof, as used herein, the term "business day" shall mean any
day when the Commission's office in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TENNESSEE.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the representatives of the
Underwriters plus one for each counsel, in any counterparts hereof, and upon
the acceptance hereof by Xxxxxx Xxxxxx, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company. It is
understood that Xxxxxx Xxxxxx'x acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement Among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on Xxxxxx
Xxxxxx'x part as to the authority of the signers thereof.
Very truly yours,
BASIN EXPLORATION, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx Xxxxx
(Selling Stockholder)
Accepted as of the date hereof
Xxxxxx Xxxxxx & Company, Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
Xxxxxx Xxxxxxx & Co., Inc.
Xxxxxxxx Xxxxxx Refsnes, Inc.
By: Xxxxxx Xxxxxx & Company, Inc.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Xxxxxxxx X. Xxxxx, Managing Director
On behalf of each of the Underwriters
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SCHEDULE I
Underwriter Firm Shares
Xxxxxx Xxxxxx
& Company, Inc. 675,000
Howard, Weil,
Labouisse, Xxxxxxxxxx
Incorporated 675,000
Xxxxxx Xxxxxxx & Co., Inc. 675,000
Xxxxxxxx Xxxxxx Refsnes, Inc. 675,000
---------
Total 2,700,000
SCHEDULE II
Xxxxxxx Xxxxx 200,000 shares
c/o Basin Exploration, Inc.
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(1) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(2) They have audited the financial statements and related schedules
included or incorporated in the Registration Statement and that their reports
with respect thereto are also included in the Registration Statement, and, if
applicable, they have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, condensed or complete, that have
been included (or incorporated by reference) in the Registration Statement,
and such unaudited consolidated financial statements provided by the Company
that shall be available for any period or periods after the latest period of
such statements included (or incorporated by reference) in the Registration
Statement, copies of which have been separately furnished to the Underwriters
(the "Underwriters");
(3) In their opinion, the consolidated financial statements and related
schedules audited by them and included or incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Rules and Regulations
thereunder, the Exchange Act and the Exchange Act Rules and Regulations
thereunder;
(4) For purposes of such letters, they have read the 1996 and 1997
minutes of meetings of the stockholders, the board of directors and
appropriate committees of the Company and its subsidiaries as set forth in
the minute books as of a date not more than five days before the Registration
Statement is declared effective (the "Cutoff Date"), officials of the
Company having advised them that the minutes of all such meetings through the
Cutoff Date" were set forth therein and that (a) with respect to the nine
month periods ended September 30, 1997 and 1996, they have (i) performed the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information, on the unaudited
condensed consolidated balance sheet dated as of September 30, 1997, and the
unaudited condensed consolidated statements of income, retained earnings and
cash flows for the nine month periods ended September 30, 1997 and 1996,
included or incorporated by reference in the Registration Statement, and have
(ii) inquired of certain officials of the Company who have responsibility for
financial and accounting matters whether the unaudited condensed consolidated
financial statements referred to in a(i) comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations thereunder or the Exchange Act and the Exchange Act Rules and
Regulations thereunder and (b) with respect to the period from October 1,
1997, to the Cutoff Date, they have read all available unaudited consolidated
financial statements of the Company and its subsidiaries for October through
the last month or other period ending before the Cutoff Date and such
corresponding period or periods for 1997 and 1996 furnished to them by the
Company, officials of the
Company having advised them that no such financial statements as of any date
or for any period subsequent to such last month or other period ending before
the Cutoff Date were available, and (ii) have inquired of certain officials
of the Company who have responsibility for financial and accounting matters
whether the unaudited consolidated financial statements referred to in b(i)
are stated on a basis substantially consistent with that of the audited
consolidated financial statements included or incorporated by reference in
the Registration Statement;
(5) Nothing came to their attention as a result of the foregoing
procedures that caused them to believe that (a)(i) any material modifications
should be made to the unaudited condensed consolidated financial statements
described in 4(a)(i) included (or incorporated by reference) in the
Registration Statement for them to be in conformity with generally accepted
accounting principles, (ii) the unaudited condensed consolidated financial
statements described in 4(a)(i) do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations thereunder or the Exchange Act and the Exchange Act Rules and
Regulations thereunder (b)(i) at the end of such last month or other period
ending before the Cutoff Date, there was any change in the capital stock,
increase in long-term debt, or decrease in consolidated net current assets or
stockholders' equity, or such other changes specified by the Underwriters in
items, of the Company consolidated with its subsidiaries as compared with
amounts shown in the September 30, 1997 unaudited condensed consolidated
balance sheet included or incorporated by reference in the Registration
Statement, or (ii) for the period from October 1, 1997, to the end of such
last month or other period ending before the Cutoff Date, there were any
decreases, as compared to the corresponding period in the preceding year, in
consolidated net sales or in the total or per-share amounts of income before
extraordinary items, of net income, or in such other items specified by the
Underwriters, except in all instances for changes, increases, or decreases
that the Registration Statement discloses have occurred or may occur;
(6) Company officials have advised them that no consolidated financial
statements as of any date or for any period subsequent the end of such last
month or other period ending before the Cutoff Date are available, and
accordingly, the procedures carried out by them with respect to changes in
the financial statement items after the end of such last month or other
period ending before the Cutoff Date have, of necessity, been even more
limited than those with respect to the periods referred to in 4 above, and
they have inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether (a) at the Cutoff
Date, the was any change in the capital stock, increase in long-term debt or
any decreases in consolidated net current assets or stockholders' equity of
the Company consolidated with its subsidiaries as compared with amounts shown
on the September 30, 1997 unaudited condensed consolidated balance sheet
included in the Registration Statement or (b) for the period from October 1,
1997 to the Cutoff Date, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated net sales or in
the total or per-share amounts of income before extraordinary items or of net
income, and on the basis of theses inquiries and their reading of the minutes
as described in 4 above, nothing came to their attention that caused them to
believe that there was any such change, increase, or decrease, except in all
instances for changes, increases, or decreases that the Registration
Statement discloses have occurred or may occur;
(7) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis
of limited
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procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation
S-K, if the requirements of such Items are applicable;
(8) They are qualified to comment with respect to any unaudited pro
forma financial information included (or incorporated by reference) in the
Registration Statement, if applicable, and after application of appropriate
procedures, nothing came to their attention that caused them to believe that
the unaudited pro forma financial statements, if any, do not comply as to
form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements; and
(9) Other than the procedures and findings or assurances referred to
above, they have carried out certain specified procedures with respect to
certain amounts, percentages and financial information specified by the
Underwriters, which are derived from the general accounting records of the
Company and its subsidiaries, which appear or are incorporated by reference
in the Registration Statement, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement or have
performed such other procedures and have made such findings as shall be
specified by the Underwriters.
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