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EXHIBIT 1-A
VERITAS DGC, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
October 5, 2000
Goldman, Sachs & Co.,
Dain Rauscher Incorporated
Simmons & Company International
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
From time to time Veritas DGC, Inc., a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Common Stock, par value $0.01 per share
(the "Shares") specified in Schedule II to such Pricing Agreement (with respect
to such Pricing Agreement, the "Firm Shares"). If specified in such Pricing
Agreement, the Company may grant to the Underwriters the right to purchase at
their election an additional number of shares, specified in such Pricing
Agreement as provided in Section 3 hereof (the "Optional Shares"). The Firm
Shares and the Optional Shares, if any, which the Underwriters elect to purchase
pursuant to Section 3 hereof are herein collectively called the "Designated
Shares."
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each Pricing
Agreement shall specify the
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aggregate number of the Firm Shares, the maximum number of Optional Shares, if
any, the initial public offering price of such Firm and Optional Shares or the
manner of determining such price, the purchase price to the Underwriters of such
Designated Shares, the names of the Underwriters of such Designated Shares, the
names of the Representatives of such Underwriters, the number of such Designated
Shares to be purchased by each Underwriter and the commission, if any, payable
to the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Firm and Optional Shares, if any, and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth
in the registration statement and prospectus with respect thereto) the terms of
such Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) a registration statement on Form S-3 (File No. 333-86247)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other 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 the Initial Registration
Statement or document incorporated by reference therein 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 Representatives); 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 (any preliminary prospectus included in
the Initial Registration Statement) or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus;" 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, each
as amended at the time such part of the Initial Registration Statement
became effective, are hereinafter collectively called the "Registration
Statement;" the prospectus relating to the Shares, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus;" any reference herein to any Preliminary
Prospectus or the 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 Preliminary
Prospectus or Prospectus, as the case may
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be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Initial Registration Statement shall
be deemed to refer to and include any annual report of the Company
filed pursuant to Section 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; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Shares in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of
the date of such filing);
(b) the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of 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 therein 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 or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) the Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental
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action, order or decree, otherwise than as set forth or contemplated in
the Prospectus; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the 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;
(e) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus; the Company and each of its subsidiaries has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, except where the failure to qualify or be in good
standing would not have a material adverse effect on the business,
condition (financial or other), properties, assets, liabilities,
stockholders' equity, results of operations or prospects of the Company
and its subsidiaries taken as a whole ("Material Adverse Effect");
(f) the Company's significant subsidiaries named in Schedule I
hereto (the "Significant Subsidiaries") owned in the aggregate more
than 90% of the consolidated assets of the Company and its
subsidiaries, taken as a whole, as of July 31, 2000 and had in the
aggregate more than 90% of the consolidated revenues of the Company and
its subsidiaries, taken as a whole, for the year ended July 31, 2000
(as reflected in the Consolidated Financial Statements contained in the
Prospectus);
(g) 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 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 for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(h) the Shares have been duly and validly authorized, and, when
the Firm Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Shares and, in
the case of any Optional Shares, pursuant to Over-allotment Options (as
defined in Section 3 hereof) with respect to such Shares, such
Designated Shares will be duly and validly issued and fully paid and
non-assessable; the Shares conform in all material respects to the
description thereof contained in the Registration Statement and the
Designated Shares will conform in all material respects to the
description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Shares; the issuance of
Shares is not subject to preemptive or other similar rights; the Rights
Agreement (as defined in the Registration Statement) has been duly
authorized, executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance with its
terms, subject to applicable laws of bankruptcy, insolvency or similar
laws
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relating to creditors' rights generally and to general principles of
equity (whether applied in a proceeding in law or equity);
(i) the issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, and the consummation
of the transactions contemplated herein and therein will not result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument 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 of its subsidiaries or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of the properties of the Company or any of
its subsidiaries; 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 or any Pricing Agreement or any Over-allotment Option, except
such as have been, or will have been prior to each Time of Delivery (as
defined in Section 4 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(j) other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(k) each of the Company and its subsidiaries has all necessary
licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
permits, authorizations, consents and approvals from other persons, in
order to conduct its respective business; neither the Company nor any
of its subsidiaries is in violation of, or in default under, any such
license, permit, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of its subsidiaries the
effect of which could have a Material Adverse Effect
(l) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and its subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved;
(m) the Company owns or possesses, or can acquire on reasonable
terms, all patents, patent rights, licenses inventions, copyrights,
know-how (including trade secrets and other
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unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by it in connection with its business as described
in the Prospectus, other than those which if not so owned or possessed
would not have a Material Adverse Effect; and the Company has not
received any notice of infringement of or conflict with asserted rights
of others with respect to any patent, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by it in connection with its business as described
in the Prospectus which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in any
Material Adverse Effect;
(n) the Company and its subsidiaries have indefeasible title to
all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus
or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries;
(o) this Agreement has been duly authorized, executed and
delivered by the Company;
(p) no person has the right, contractual or otherwise, to cause
the Company to issue to it, or register pursuant to the Act, any shares
of capital stock of the Company upon the issue and sale of the Shares
to the Underwriters hereunder, nor does any person have preemptive
rights, rights of first refusal or other rights to purchase any of the
Shares;
(q) neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws 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
any of them is a party or by which any of them or any of their
properties may be bound;
(r) the statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Common Stock and under the captions "Plan
of Distribution" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate in all material respects,
(s) neither the Company nor any of its subsidiaries is or, after
giving effect to the offering and sale of the Shares, will 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") or analogous foreign
laws and regulations;
(t) 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;
(u) PricewaterhouseCoopers LLP and Deloitte & Touche LLP, who
each have certified certain financial statements of the Company and its
subsidiaries, and PricewaterhouseCoopers LLP, Chartered Accountants,
who have certified certain financial
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statements of Veritas Energy Services, Inc., are each independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder; and
(v) the Company is not engaged in any discussions or
negotiations with Petroleum Geo-Services ASA ("PGS") concerning a
potential merger, consolidation, sale of assets, sale of stock or other
business combination involving the Company and PGS.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives 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 as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, 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 Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Goldman, Sachs & Co. at least forty-eight
hours in advance as specified in such Pricing Agreement, (i) with respect to the
Firm Shares, all in the manner and at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such
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Optional Shares, or at such other time and date as the Representatives
and the Company may agree upon in writing, such time and date, if not
the First Time of Delivery, herein called the "Second Time of
Delivery". Each such time and date for delivery is herein called a
"Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives 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 the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares, of the suspension of the
qualification of such 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 such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such 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 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic copies
of the Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of the Shares and if at such time any event 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
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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 same period to amend or
supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify the Representatives and
upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many written and electronic copies as the Representatives 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;
(d) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however, that
the License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or transferred;
(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 of the Registration Statement (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 of the Pricing
Agreement for such Designated Shares and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Shares, as notified to the Company by the Representatives,
(ii) the last Time of Delivery for such Designated Shares and (iii) any
period specified in the Pricing Agreement, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder or in the
Pricing Agreement, any securities of the Company that are substantially
similar to the Designated Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Shares or any such substantially
similar securities (other than as set forth in the Pricing Agreement or
pursuant to employee stock option plans existing on, or upon the
conversion of convertible or exchangeable securities outstanding as of,
the date of the Pricing Agreement for such Designated Shares) without
the prior written consent of the Representatives;
(g) to use its best efforts to list, subject to notices of
issuance, the Shares on the New York Stock Exchange (the "Exchange");
and
(h) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of filing
either pay the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's
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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, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Blue Sky Memorandum, closing documents (including compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Shares; (iii) all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky survey(s); (iv) all fees and expenses in connection with
listing the Shares on the Exchange; (v) the cost of preparing certificates for
the Shares; (vi) the cost and charges of any transfer agent or registrar or
dividend disbursing agent; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder and under any Over-allotment
Options which are not otherwise specifically provided for in this Section. It is
understood, however, 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, 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 of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Shares are, at
and as of each Time of Delivery for such Designated Shares, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares 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 by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; 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 the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions (a draft of each such
opinion is attached as Annex II(a) hereto), dated each Time of Delivery
for such Designated Shares, with respect to various matters as the
Representatives 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) Fulbright & Jaworski LLP, counsel for the Company shall have
furnished to the Representatives their written opinion (a draft of such
opinion is attached as Annex II(b)
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hereto), dated each Time of Delivery for such Designated Shares,
respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) the Company and each domestic Significant Subsidiary
of the Company have been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) the Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and the
Designated Shares being delivered at such Time of Delivery have
been duly and validly authorized and issued and are fully paid
and non-assessable and free of statutory or contractual
preemptive rights; and the Designated Shares conform in all
material respects to the description thereof in the Prospectus
as amended or supplemented;
(iii) this Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Company;
(iv) the issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to the Designated Shares and the
consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument filed as an exhibit to the Company's
Form 10-K for the year ended July 31, 2000 (the "Form 10-K") or
any document filed with the Commission after the filing of the
Form 10-K and incorporated by reference in the Prospectus as
amended or supplemented, nor will such action result in any
violation of the provisions of the Certificate of Incorporation
or By-laws of the Company or any of its subsidiaries or any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of its or
their properties;
(v) 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 Designated Shares being delivered at such Time of
Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Designated Shares by the Underwriters;
(vi) the statements set forth in the Prospectus as
amended and supplemented under the caption "Description of
Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to
therein, are accurate in all material respects;
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<PAGE> 12
(vii) the Rights Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable in accordance with
its terms, subject to applicable laws of bankruptcy, insolvency
or similar laws relating to creditors' rights generally and to
general principles of equity (whether applied in a proceeding
in law or equity);
(viii) the Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge, no
stop order proceedings with respect thereto are pending or
threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424
under the Act has been made in the manner and within the time
period required by such Rule 424;
(ix) neither the Company nor any of its subsidiaries is
an "Investment Company" or any entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(x) the documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and
(xi) the Registration Statement and the Prospectus as
amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder.
In addition, such counsel shall state that although they
do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in
the opinion in subsection (vi) of this Section 7(c), no facts
have come to such counsel's attention that lead such counsel to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) 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
therein not misleading or that, as of its date and as of such
Time of Delivery, the Prospectus as amended or supplemented or
any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of such Time of Delivery; and they do not know of any
amendment to the Registration Statement required to be filed or
any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be
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<PAGE> 13
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which
are not filed or incorporated by reference or described as
required; and no facts have come to such counsel's attention
that lead such counsel to believe that any documents
incorporated by reference in the Prospectus as amended or
supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) when they became effective or were so filed, as the
case may be, contained, in the case of a registration statement
which became effective under the Act, 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 therein
not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading;
Larry L. Worden, Vice President, General Counsel and Secretary
of the Company shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(b)
hereto), dated each Time of Delivery for such Designated Shares,
respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) the Company and each Significant Subsidiary of the
Company have been duly incorporated and is validly existing as
a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; the
Company and each of its Significant Subsidiaries are duly
qualified and in good standing as a foreign entity authorized
to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified
would not, either individually or in the aggregate, result in a
Material Adverse Effect;
(ii) the Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company (including
the Designated Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully
paid and non-assessable and free of statutory or contractual
preemptive rights;
(iii) to the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect; and to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) the issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to the Designated Shares and the
consummation of the transactions herein and therein
contemplated will not result in a
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<PAGE> 14
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries is
a party or by which the Company is bound or to which any of the
property or assets of the Company 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
of its subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries or any of its or their properties;
(v) to the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws 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 any of them is a party or by
which any of them or any of their properties may be bound;
(vi) the documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and
(vii) the Registration Statement and the Prospectus as
amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder;
In addition, such counsel shall state that although he
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, no facts have come to
such counsel's attention that lead such counsel to believe
that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion) 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 therein not
misleading or that, as of its date and as of such Time of
Delivery, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of such Time of Delivery; and he does not know of any
amendment to the Registration Statement required to be filed or
any contracts or other documents of a character
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<PAGE> 15
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required; and no facts have come to
such counsel's attention that lead him to believe that any
documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion), when they became effective or were so
filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, 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 therein not misleading, or, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not
misleading;
(d) On the date of the Pricing Agreement for such Designated
Shares and at each Time of Delivery for such Designated Shares, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated
by reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the date of such Pricing Agreement or
the effective date of the Registration Statement or the date of the
most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement,
if the date of such report is later than such effective date, and a
letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto (a draft of the form of letter to be delivered
on the date of the Pricing Agreement for such Designated Shares is
attached as Annex I(a) hereto and a draft of the form of letter to be
delivered at the Time of Delivery for such Designated Shares is
attached as Annex I(b) hereto), and with respect to such letter dated
such Time of Delivery, as to such other matters as the Representatives
may reasonably request and in form and substance satisfactory to the
Representatives;
(e) (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 as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares 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 as amended prior to the date of the Pricing Agreement
relating to the Designated Shares, and (ii) since the respective dates
as of which information is given in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Shares
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 as amended prior to
the date of the Pricing Agreement relating to the Designated Shares,
the effect of which, in any such case described in clause (i) or (ii),
is in the
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<PAGE> 16
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Shares on the terms and in the manner
contemplated in the Prospectus as amended relating to the Designated
Shares;
(f) On or after the date of the Pricing Agreement relating to
the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock;
(g) On or after the date of the Pricing Agreement relating to
the Designated Shares 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; (ii) a suspension
or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York or Texas
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 judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Shares or Optional Shares or both on the terms and
in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Shares;
(h) The Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
(i) The directors and executive officers of the Company listed
in Schedule II hereto shall have entered into a written agreement in
the form of Annex III hereto (each such agreement, a "Lock-up
Agreement"), and executed originals of each Lock-up Agreement shall
have been delivered to the Representatives; and
(j) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement relating to such Designated Shares; and
(k) The Company shall have furnished or caused to be furnished
to the Representatives at each Time of Delivery for the Designated
Shares certificates of officers of the Company satisfactory to the
Representatives 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, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, 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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the
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<PAGE> 17
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, 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, 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 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 any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company 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 any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, 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 any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company 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)
or (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 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
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<PAGE> 18
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 any 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) or (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 on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. 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 on the one hand and the Underwriters
of the Designated Shares 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 on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. 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 on the one hand or such
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 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 applicable Designated 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
obligations of the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
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<PAGE> 19
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company 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 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 Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves 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 Representatives do not arrange for the purchase
of such Firm Shares or Optional Shares, as the case may be, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Shares on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Shares 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 as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives 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 the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, 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
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the
19
<PAGE> 20
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, 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 any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Shares or Optional Shares
with respect to which such Pricing Agreement shall have been terminated except
as provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such 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 such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
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 the address of the Representatives as set forth in the
Pricing Agreement; 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 the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company 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 or any such Pricing
20
<PAGE> 21
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 each Pricing Agreement. 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 AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
21
<PAGE> 22
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and one for each of the Representatives
plus one for each counsel counterparts hereof.
Very truly yours,
Veritas DGC, Inc.
By: /s/ ANTHONY TRIPODO
---------------------------------------
Name: Anthony Tripodo
Title: Executive Vice President, Chief
Financial Officer and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Dain Rauscher Incorporated
Simmons and Company International
By: /s/ GOLDMAN, SACHS & CO.
---------------------------
(Goldman, Sachs & Co.)
On behalf of the Underwriters
22
<PAGE> 23
ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.,
Dain Rauscher Incorporated
Simmons & Company International,
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
1000 Louisiana
11th Floor
Houston, Texas 77002
......................, 2000
Ladies and Gentlemen:
Veritas DGC, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated ____________, 2000 (the "Underwriting Agreement"), between the
Company on the one hand and Goldman, Sachs & Co. and Dain Rauscher Incorporated
and Simmons & Company International on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares" consisting of Firm
Shares and any Optional Shares the Underwriters may elect to purchase). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the
<PAGE> 24
Company, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto and, (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares, as provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
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
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
2
<PAGE> 25
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and one for each of the Representatives
plus one for each counsel counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be 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 the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
Veritas DGC, Inc.
By:
------------------------------------------
Name: Anthony Tripodo
Title: Executive Vice President, Chief
Financial Officer and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Dain Rauscher Incorporated
Simmons & Company International
By
------------------------------------
(Goldman, Sachs & Co.)
On behalf of the Underwriters
3
<PAGE> 26
SCHEDULE I
MAXIMUM NUMBER
OF OPTIONAL
NUMBER OF SHARES WHICH
FIRM SHARES MAY BE
UNDERWRITER TO BE PURCHASED PURCHASED
----------- --------------- ---------
Goldman, Sachs & Co...........................
Dain Rauscher Incorporated....................
Simmons & Company International...............
------------ -----------
Total.......................
============ ===========
4
<PAGE> 27
SCHEDULE II
TITLE OF DESIGNATED SHARES:
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
$........ per Share
PURCHASE PRICE BY UNDERWRITERS:
$........ per Share
[COMMISSION PAYABLE TO UNDERWRITERS:
$........ per Share in Federal (same-day) funds
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of The Depository
Trust Company or its designated custodian
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds
BLACKOUT PROVISIONS WITH RESPECT TO THE DESIGNATED SHARES
[90 days]
TIME OF DELIVERY:
......... a.m. (New York City time), .................., 19..
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
5
<PAGE> 28
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) 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;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing
came to their attention that caused them to believe that the unaudited
condensed consolidated financial statements do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) 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 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
F-1
<PAGE> 29
the disclosure requirements of items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act
and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus, for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon
F-2
<PAGE> 30
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except
in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, 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.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
F-3
