<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 7, 1995
REGISTRATION NO. 33-61747
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
CAIRN ENERGY USA, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1311 23-2169839
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
MICHAEL R. GILBERT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CAIRN ENERGY USA, INC.
8235 DOUGLAS AVENUE, SUITE 1221
DALLAS, TEXAS 75225
(214) 369-0316
(Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive offices and of agent
for service)
---------------------
Copies to:
<TABLE>
<S> <C> <C>
MARK D. WIGDER, ESQ. LARRY JORDAN ROWE, ESQ. STEVEN A. COHEN, ESQ.
JENKENS & GILCHRIST, ROPES & GRAY HOLME ROBERTS & OWEN LLC
A PROFESSIONAL CORPORATION ONE INTERNATIONAL PLACE 1700 LINCOLN, SUITE 4100
1445 ROSS AVENUE, SUITE 3200 BOSTON, MASSACHUSETTS 02110 DENVER, COLORADO 80203
DALLAS, TEXAS 75202 (617) 951-7407 (303) 866-0238
(214) 855-4326
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered in connection with dividend or interest
reimbursement plans, check the following box. / /
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table indicates the expenses to be incurred in connection with the
issuance and distribution of the securities described in this registration
statement, other than underwriting discounts and commissions. The Company will
pay all such expenses.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee....................... $ 12,404
National Association of Securities Dealers, Inc. Filing Fee............... 4,097
NASDAQ Stock Market Filing Fee............................................ 17,500
Blue Sky Fees and Expenses................................................ 2,500*
Accounting Fees and Expenses.............................................. 47,000*
Legal Fees and Expenses................................................... 55,000*
Printing and Engraving Fees and Expenses.................................. 95,000*
Miscellaneous............................................................. 6,499*
--------
Total........................................................... $240,000*
========
</TABLE>
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under the Delaware General Corporation Law, subject to
certain limitations, to indemnify its directors and officers against expenses
(including attorneys' fees), judgments, fines and certain settlements actually
and reasonably incurred by them in connection with any suit or proceeding to
which they are a party so long as they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct was unlawful.
Reference is also made to the Company's Certificate of Incorporation, which
limits or eliminates a director's liability for monetary damages to the Company
or its stockholders for acts or omissions in the director's capacity as a
director, except that the Company's Certificate of Incorporation does not
eliminate or limit the liability of a director for (i) a breach of the
director's duty of loyalty to the Company or its stockholders, (ii) an act or
omission not in good faith that constitutes a breach of duty of the director to
the Company or an act or omission that involves intentional misconduct or a
knowing violation of the law, (iii) a transaction from which a director received
an improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, or (iv) an act or omission for which
the liability of a director is expressly provided for by an applicable statute.
In the case of an action by or in the right of the Company, indemnification is
precluded if such person has been adjudged to be liable, unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
the action was brought shall determine that indemnification is proper. The
Company will advance amounts to an indemnified person on receipt of an
undertaking to repay the advance following any subsequent determination that the
indemnified person is not entitled to indemnification. Indemnification will be
provided unless it is determined to be improper (i) by a majority of
disinterested directors constituting a quorum or if no such quorum is
obtainable, a majority vote of a committee of two or more directors, (ii) by a
majority vote of a quorum of the outstanding shares of stock of all classes
entitled to vote for directors, voting as a single class, which quorum shall
consist of disinterested stockholders, (iii) by independent legal counsel in a
written opinion, or (iv) by a court of competent jurisdiction. The Company also
has the power to obtain insurance indemnifying officers and directors of the
Company against any liability which it may deem proper, whether or not the
Company would have the power to indemnify such officer or director pursuant to
the General Corporation Law of the State of Delaware. The Company has not
obtained such insurance.
II-1
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<S> <C>
1.1 -- Form of Underwriting Agreement.
1.2 -- Form of Agreement Among Underwriters.
2.1 -- Purchase and Sale Agreement dated July 12, 1994, by and among Smith Offshore
Exploration Company, II, Phemus Corporation, and Cairn Energy USA, Inc. (without
exhibits) (the exhibits and schedules to the Agreement have been omitted pursuant to
Item 601(b)(2) of Regulation S-K). Incorporated by reference from the Company's
Current Report on Form 8-K, dated July 12, 1994, filed with the Commission on July
27, 1994.
2.2 -- Common Stock Purchase Agreement dated July 12, 1994 by and between Cairn Energy PLC
and Phemus Corporation. Incorporated by reference from the Company's Current Report
on Form 8-K, dated July 12, 1994, filed with the Commission on July 27, 1994.
*5.1 -- Opinion of Jenkens & Gilchrist, a Professional Corporation.
*23.1 -- Consent of Ernst & Young LLP, Independent Auditors.
*23.2 -- Consent of Jenkens & Gilchrist, a Professional Corporation (included in opinion
Exhibit 5).
*23.3 -- Consent of Ryder Scott Company.
*23.4 -- Consent of Arthur Andersen LLP, Independent Public Accountants
*24.1 -- Power of Attorney (included on the signature page of the Registration Statement).
</TABLE>
- ---------------
* Previously filed.
(b) Financial Statement Schedules:
See index to financial schedules on page F-1.
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
B. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security-holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
C. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE> 4
D. The registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement or in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, thereunto duly authorized, in the City of Dallas, and the State of
Texas, the 6th day of September, 1995.
CAIRN ENERGY USA, INC.
(Registrant)
By: /s/ MICHAEL R. GILBERT
----------------------------------
Michael R. Gilbert,
President and Chief Executive
Officer
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears below
constitutes and appoints Michael R. Gilbert and J. M. M. Sutherland, and each of
them, each with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power and substitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
to this Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- -------------------------------- ------------------
<C> <S> <C>
/s/ MICHAEL R. GILBERT President, Chief Executive September 6, 1995
- ---------------------------------------- Officer and
Michael R. Gilbert Director (Principal Executive
Officer)
/s/ J.M.M. SUTHERLAND* Senior Vice President, Chief September 6, 1995
- ---------------------------------------- Financial
J.M.M. Sutherland Officer, Treasurer, and
Director
(Principal Financial Officer)
/s/ A. ALLEN PAUL* Vice President-Finance September 6, 1995
- ---------------------------------------- (Principal Accounting Officer)
A. Allen Paul
/s/ R. DANIEL ROBINS* Director September 6, 1995
- ----------------------------------------
R. Daniel Robins
/s/ JACK O. NUTTER, II* Director September 6, 1995
- ----------------------------------------
Jack O. Nutter, II
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- -------------------------------- ------------------
<C> <S> <C>
/s/ WILLIAM B. B. GAMMELL* Director September 6, 1995
- ----------------------------------------
William B. B. Gammell
/s/ MICHAEL E. MCMAHON* Director September 6, 1995
- ----------------------------------------
Michael E. McMahon
/s/ JOHN C. HALSTED* Director September 6, 1995
- ----------------------------------------
John C. Halsted
*By: /s/ MICHAEL R. GILBERT
- ----------------------------------------
Michael R. Gilbert
Agent and Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ---------- ------------------------------------------------------------------------ ------------
<C> <S> <C>
1.1 -- Form of Underwriting Agreement.
1.2 -- Form of Agreement Among Underwriters.
2.1 -- Purchase and Sale Agreement dated July 12, 1994, by and among Smith
Offshore Exploration Company, II, Phemus Corporation, and Cairn
Energy USA, Inc. (without exhibits) (the exhibits and schedules to
the Agreement have been omitted pursuant to Item 601(b)(2) of
Regulation S-K). Incorporated by reference from the Company's Current
Report on Form 8-K, dated July 12, 1994, filed with the Commission on
July 27, 1994.
2.2 -- Common Stock Purchase Agreement dated July 12, 1994 by and between
Cairn Energy PLC and Phemus Corporation. Incorporated by reference
from the Company's Current Report on Form 8-K, dated July 12, 1994,
filed with the Commission on July 27, 1994.
*5.1 -- Opinion of Jenkens & Gilchrist, a Professional Corporation.
*23.1 -- Consent of Ernst & Young LLP, Independent Auditors.
*23.2 -- Consent of Jenkens & Gilchrist, a Professional Corporation (included
in opinion Exhibit 5).
*23.3 -- Consent of Ryder Scott Company.
*23.4 -- Consent of Arthur Andersen LLP, Independent Public Accountants
*24.1 -- Power of Attorney (included on the signature page of the Registration
Statement).
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
2,750,000 Shares
CAIRN ENERGY USA, INC.
Common Stock
UNDERWRITING AGREEMENT
August __, 1995
S.G. WARBURG & CO. INC.
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
PETRIE PARKMAN & CO., INC.
c/o S.G. WARBURG & CO. INC.
277 Park Avenue
New York, New York 10172
Dear Sirs:
Cairn Energy USA, Inc., a Delaware corporation (the "Company"), and
Phemus Corporation, a Massachusetts membership corporation (the "Selling
Stockholder"), propose to sell an aggregate of 2,750,000 shares of common
stock, par value $.01 per share, of the Company (the "Common Stock"), of which
750,000 shares of Common Stock are to be issued and sold by the Company and
2,000,000 shares of Common Stock are to be sold by the Selling Stockholder, in
each case to you and the several underwriters named in Schedule I hereto (the
"Underwriters"). The 2,750,000 shares of Common Stock being sold to the
several Underwriters by the Company and the Selling Stockholder are herein
called the "Firm Shares." The Company also proposes to sell to the several
Underwriters not more than 412,500 additional shares of Common Stock (the
"Additional Shares") if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are herein collectively
called the "Shares."
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations of the
Commission thereunder (collectively, the "Rules and Regulations"), a
registration statement on Form S-3 including a prospectus relating to the
Shares, which may be amended. The registration statement as amended at the
time when it becomes effective, including information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
<PAGE> 2
Rule 430A under the Securities Act, is hereinafter referred to as the
"Registration Statement"; and the prospectus in the form first used to confirm
sales of Shares is hereinafter referred as the "Prospectus." For purposes
hereof, the term "Prospectus" shall include the consolidated financial
statements of the Company and the notes thereto included therein. Any
reference in this Agreement to the Registration Statement or any Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the
Registration Statement or any Prospectus, as the case may be, and any reference
to any amendment or supplement to the Registration Statement or any Prospectus
shall be deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the Registration Statement, any Prospectus or any amendment or supplement
thereto, but does not include any documents incorporated by reference in the
Registration Statement, any Prospectus or any amendment or supplement thereto
subsequent to the Closing Date (as defined in Section 4 hereof).
2. Agreements to Sell and Purchase. The Selling Stockholder and
the Company, severally and not jointly, hereby agree, subject to all the terms
and conditions set forth herein, to sell 2,000,000 shares of Common Stock and
750,000 shares of Common Stock, respectively, to the Underwriters and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Stockholder herein contained and subject to all of the terms and
conditions set forth herein, each of the Underwriters, severally and not
jointly, agrees to purchase from the Selling Stockholder and the Company the
respective number of Firm Shares set forth opposite that Underwriter's name in
Schedule I hereto, at a purchase price of $ per share (the "Purchase
Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company also agrees to
issue and sell to the several Underwriters up to 412,500 Additional Shares, and
the Underwriters shall have a one-time right to purchase up to an aggregate of
412,500 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased as provided in Section 4 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the
total number of Firm Shares.
The Company and the Selling Stockholder hereby agree to, and the
Company and the Selling Stockholder shall, concurrently with the execution of
this Agreement, deliver agreements executed by (i) each of the directors and
officers of the Company, (ii) the Company and (iii) the Selling Stockholder
pursuant to which each such person agrees, except as provided in the
Prospectus, not to offer, sell, contract to sell, grant any option to purchase,
or otherwise dispose
2
<PAGE> 3
of any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock (or, in the case of the
Company, file any registration statement under the Securities Act with respect
to any of the foregoing), except to the several Underwriters pursuant to this
Agreement, for a period of 180 days after the date of the Prospectus without
the prior written consent of S.G. Warburg & Co. Inc. Notwithstanding the
foregoing, during such period the Company may issue or grant options to
purchase shares of Common Stock pursuant to employee benefit plans and issue
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof.
3. Terms of Public Offering. The Company and the Selling
Stockholder are advised by you that the Underwriters propose to make a public
offering of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
and the Selling Stockholder are further advised by you that the Shares are to
be offered to the public initially at U.S. $ per share (the public
offering price) and to certain dealers selected by you at a price that
represents a concession not in excess of U.S. $. per share under the
public offering price, and that the Underwriters may allow, and such dealers
may reallow, a concession, not in excess of U.S. $. per share, to certain
other dealers.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made by certified or official bank check
or checks payable to the order of the Company (in the case of Shares sold by
the Company) and the Selling Stockholder (in the case of Shares sold by the
Selling Stockholder), in New York Clearing House or similar next day funds, at
the offices of S.G.Warburg & Co. Inc., 277 Park Avenue, New York, New York, at
10:00 a.m. (New York City time), on September , 1995, or at such other time
on the same or such other date, not later than September , 1995, or such
other place as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the Closing Date.
Delivery to the Underwriters and payment for any Additional Shares
shall be made by certified or official bank check or checks payable to the
order of the Company, in each case in New York Clearing House or similar next
day funds, at the offices of S.G.Warburg & Co. Inc., 277 Park Avenue, New York,
New York, at 10:00 a.m. (New York City time), on such date (which may be the
same as the Closing Date but shall in no event be earlier than the Closing Date
nor later than 10 business days after the giving of the notice hereinafter
referred to) as shall be designated in a written notice from S.G.Warburg & Co.
Inc. to the Company of its determination to purchase a number, specified in
said notice, of Additional Shares, or on such other date, in any event not
later than October , 1995, or at such other place as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the Option Closing Date. The notice of the determination to exercise the
option to purchase Additional Shares and of the Option Closing Date may be
given at any time within 30 days after the date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and issued in such denominations
as you shall request in writing not later than two full business days prior to
the Closing Date or the Option Closing Date, as the case may be. Such
certificates shall be made available to you for inspection not later than 9:30
A.M.
3
<PAGE> 4
(New York City time) on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. Certificates in definite form
evidencing the Shares shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, with any transfer or similar taxes
thereon duly paid by the Company or the Selling Stockholder, as appropriate,
for the respective accounts of the several Underwriters.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants to each
Underwriter as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, to use its best efforts to cause
the Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company will comply in a
timely manner with the applicable provisions of Rules 424 and 430A
under the Securities Act prior to the Closing Date.
(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement
has become effective and when any post-effective amendment to it
becomes effective, (ii) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information with respect thereto,
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes,
and (iv) of the happening of any event during the period referred to
in paragraph (e) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statement therein, in
light of the circumstances under which made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, two signed copies
of the Registration Statement as first filed with the Commission and
of each subsequent amendment to the Registration Statement, including
all exhibits, and to furnish to you and each Underwriter designated by
you, (i) such number of conformed copies of the Registration Statement
as so filed and of each such amendment to it, without exhibits, as you
may reasonably request, and (ii) such number of the Incorporated
Documents, and the exhibits thereto, as you may reasonably request.
(d) Not to file (i) any amendment or supplement to the
Registration Statement (other than an amendment or supplement made
through the filing of Incorporated Documents), whether before or after
the time when it becomes effective, or to make any amendment or
supplement to the Prospectus of which you shall not previously have
been
4
<PAGE> 5
advised or to which you shall reasonably object, or (ii) so long as,
in the reasonable opinion of counsel to the Underwriters, a prospectus
is required to be delivered in connection with sales by any
Underwriter or dealer, any document which, upon filing, becomes an
Incorporated Document without delivering a copy of such documents to
you prior to or concurrently with such filing.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish to each Underwriter and dealer as
many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any
event shall occur as a result of which, in the reasonable opinion of
counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with any law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to
the Prospectus so that the statements in the Prospectus, as so amended
or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply
with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter
or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Shares for offer and sale by
the several Underwriters and by dealers under the state securities or
Blue Sky laws of such jurisdictions as you may request, to continue
such qualification in effect so long as required for distribution of
the Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be
required to qualify as a foreign corporation or to take any action
that would subject it to service of process in suits other than as to
matters relating to the offer and sale of the Shares or subject itself
to taxation in respect of doing business in any jurisdiction where it
is not now so subject.
(h) To make generally available to its stockholders as
soon as reasonably practicable a consolidated earnings statement
covering a period of at least twelve months beginning after the
"effective date" (as defined in Rule 158 under the Act) of the
Registration Statement (but in no event commencing later than 90 days
after such effective date) which shall satisfy the provisions of
Section 11(a) of the Act (including, at the option of the Company,
Rule 158 promulgated thereunder).
5
<PAGE> 6
(i) During the period of five years hereafter, to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the holders of Common
Shares and a copy of each report (including related financial
statements) filed with the Commission, the NASDAQ National Market
System and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
(j) To pay all costs, expenses, fees and taxes incident
to (i) the preparation, printing, filing and distribution under the
Securities Act of the Registration Statement (including financial
statements and exhibits), each Prospectus and all amendments and
supplements to any of them prior to or during the period specified in
paragraph (e), (ii) the printing and delivery of the Prospectus and
all amendments or supplements to it during the period specified in
paragraph (e), (iii) the copying and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda (including in each
case any reasonable disbursements of counsel for the Underwriters
relating to such copying and delivery), (iv) the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the several states (including in each case the
reasonable fees and disbursement of counsel for the Underwriters
relating to such registration or qualification and memoranda relating
thereto), (v) filing and clearance with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering,
(vi) the listing of the Shares on the NASDAQ National Market System,
(vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold as
described herein and (viii) the performance by the Company of its
other obligations under this Agreement.
(k) In accordance with the Cuba Act and without
limitation to the provisions of Section 9 hereof, the Company agrees
to indemnify and hold harmless the Underwriters from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred), arising
out of any violation by the Company of the Cuba Act.
(l) Except as stated in this Agreement and in the
Prospectus, to not take, directly or indirectly, any action designed
to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or the Option Closing Date, as
the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
(n) To apply its net proceeds from the sale of the Shares
in accordance with the description set forth in the Prospectus under
"Use of Proceeds."
6
<PAGE> 7
6. Covenants of the Selling Stockholder. In further
consideration of the agreements of the Underwriters herein contained, the
Selling Stockholder covenants to each Underwriter as follows:
(a) To cooperate to the extent necessary to cause the
Registration Statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) To do or perform all things reasonably required to be
done or performed by the Selling Stockholder before the Closing Date
or the Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares to be sold by the
Selling Stockholder to the Underwriters pursuant to this Agreement.
(c) Except as stated in this Agreement and in the
Prospectus, to not take, directly or indirectly, any action designed
to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(d) To advise you promptly, and if requested by you, to
confirm such advice in writing, within the period of time referred to
in Section 5(e) hereof, of any change in information relating to the
Selling Stockholder or any new information relating to the Selling
Stockholder stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of the Selling Stockholder that
suggests that any statement made in the Registration Statement or the
Prospectus (as then amended or supplemented, if amended or
supplemented) is or may be untrue in any material respect or that the
Registration Statement or Prospectus (as then amended or supplemented,
if amended or supplemented) omits or may omit to state a material fact
or a fact necessary to be stated therein in order to make the
statements therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the
Securities Act and the Rules and Regulations or any other law.
(e) Prior to any public offering of the Shares, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Shares for offer and sale by
the Underwriter and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Shares and to file such consents to service of process or other
documents as may be necessary to effect such registration or
qualification; provided, however, that the Selling Stockholder shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to service of process in suits other than
as to matters relating to the offer and sale of the Shares or subject
itself to taxation in respect of doing business in any jurisdiction
where it is not now subject.
7
<PAGE> 8
7. Representations and Warranties of the Company. The Company
represents and warrants to, and covenants and agrees with, each Underwriter
as follows:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before
or, to the best knowledge of the Company, threatened by the
Commission.
(b) (i) The Company and the offering and sale of shares
contemplated by this Agreement meet the requirements for using Form
S-3 under the Act, (ii) each part of the Registration Statement, when
such part became effective, did not contain and each such part, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
in all material respects and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the Rules and Regulations and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth
in this Section 7(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to (x) the Underwriters furnished to the Company in writing
by the Underwriters expressly for use therein or (y) the Selling
Stockholder furnished to the Company in writing by the Selling
Stockholder expressly for use therein.
(c) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 of the Rules and Regulations,
complied when so filed in all material respects with the Securities
Act and the Rules and Regulations.
(d) All of the Company's subsidiaries are listed, to the
extent such listing is required under the Securities Act and the Rules
and Regulations, in an exhibit to the Company's Annual Report on Form
10-K which is incorporated by reference into the Registration
Statement. Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement, and each is
duly qualified and is in good standing as a foreign corporation
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
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
8
<PAGE> 9
(e) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such
document was filed, when such amendment was filed), conformed in all
material respects with the requirements of the Exchange Act and the
rules and regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all material respects
with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if any
amendment with respect to any such document was filed, when such
amendment was filed) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances when made, not misleading; and no such further document,
when it is filed, will contain an untrue statement of a material fact
or will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances when made, not misleading.
(f) All of the outstanding shares of capital stock of the
Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature, except for the security interest
granted to International Nederlanden (U.S.) Capital Corporation
("INCC") pursuant to the Credit Agreement dated September 8, 1993, as
amended on October 15, 1993 and May 10, 1994 and amended and restated
on December 20, 1994 (the "Credit Agreement") between the Company and
INCC, a copy of which (without exhibits) has been filed with the
Commission as an exhibit to [ ] which is
incorporated by reference into the Registration Statement.
(g) (i) All the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights and have been issued in compliance with all federal and state
securities laws and (ii) the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided by
this Agreement, will have been validly issued and will be fully paid
and non-assessable, and the issuance of such Shares will not be
subject to any preemptive rights.
(h) The authorized and outstanding capital stock of the
Company conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus. Except as described
in the Prospectus, there are no outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any capital stock of
the Company or its subsidiaries or other equity interest in the
Company or its subsidiaries, in each case, issued by the Company or
its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind of which the Company or its
subsidiaries is a party relating to the issuance of capital stock of
the Company or its subsidiaries, any such convertible or exchangeable
securities or any such rights, warrants or options.
9
<PAGE> 10
(i) Except as otherwise stated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Prospectus: (i) there has been no material adverse change, or any
development that would reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, (ii) the Company and its subsidiaries,
taken as a whole, have not incurred any material liability or
obligation, direct or contingent, not in the ordinary course of
business nor entered into any material transaction not in the ordinary
course of business, and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company, its subsidiaries on any
class of capital stock or repurchase or redemption by the Company or
its subsidiaries of any class of capital stock.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or bylaws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, loan agreement,
covenant, note, contract, lease or other instrument to which the
Company or its subsidiary is a party or by which it or any of them may
be bound (including the Credit Agreement) or to which any of the
property or assets of the Company or its subsidiaries is subject,
except for such defaults as would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(k) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms, except to the extent
that rights to indemnification thereunder may be limited by federal or
state securities laws and policies embodied therein, or to the extent
that such obligations are subject to or affected or limited by (i)
applicable liquidation, conservatorship, bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws
affecting creditors' rights or in the collection of debtors'
obligations generally from time to time in effect, or (ii) general
principles of equity (whether enforceability is considered in a
proceeding in equity or at law). The execution, delivery and
performance of this Agreement, compliance by the Company with all the
provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as has been
previously obtained and except as may be required under the securities
or blue sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or bylaws of the Company or its subsidiaries or any
agreement, indenture or other instrument to which the Company or its
subsidiaries is a party or by which the Company or its subsidiaries or
their respective property is bound, or violate or conflict with any
laws, administrative regulations or rulings or court decrees
applicable to the Company, its subsidiaries or their respective
property, except for any such conflict, breach, violation or default
as will not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
10
<PAGE> 11
(l) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the best knowledge of the Company, threatened, against
or affecting the Company or its subsidiaries, (i) which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or (ii) in which there is a reasonable possibility of a
determination adverse to the Company or its subsidiaries and which, if
determined adversely to the Company and its subsidiaries, would
reasonably be expected to (A) result in any material adverse change in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
(B) materially and adversely affect the properties or assets thereof
or (C) materially and adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the
Company or its subsidiaries is a party or of which any of their
respective properties or assets is the subject which are not described
in the Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company or
its subsidiaries which are required to be filed as exhibits to the
Registration Statement or incorporated by reference therein by the
Securities Act or the Rules and Regulations which have not been so
filed or incorporated.
(m) The Company and its subsidiaries have obtained all
licenses, permits and other authorizations required under any
Environmental Law (as defined below) necessary for their respective
operations, except to the extent that failure to have such license,
permit or authorization would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; the business and operations of the Company and its
subsidiaries comply with the terms and conditions of such licenses,
permits and authorizations and comply with all Environmental Laws,
except to the extent that failure to comply would not reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole; the Company and its subsidiaries are in
compliance with all Environmental Laws, except to the extent that any
noncompliance would not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
neither the Company nor its subsidiaries has received any written
communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or its
subsidiaries is not in compliance with any Environmental Law, except
to the extent that such noncompliance would not reasonably be expected
to have a material adverse effect on the Company and its subsidiaries,
taken as a whole; there is no Environmental Claim (as defined below)
pending or, to the Company's knowledge, threatened against the Company
or its subsidiaries or, to the Company's knowledge, against any person
or entity whose liability for any Environmental Claim the Company or
its subsidiary has retained or assumed either contractually or by
operation of law, except to the extent that such Environmental Claim
would not reasonably be expected to have a material adverse effect on
the Company and its subsidiaries, taken as a whole; the Company is not
aware of any condition or circumstance that is reasonably likely to
give rise to an Environmental Claim that, if made, would have a
material adverse effect on the Company and its subsidiaries, taken as
a whole. As used in this Agreement, "Environmental Laws" means any
and all
11
<PAGE> 12
federal, state and local statutes, laws, regulations, ordinances,
grants, franchises, licenses, agreements, or governmental restrictions
relating to pollution, human health or the environment or the release
of any materials into the environment, including, but not limited to,
emissions, discharges, releases or threatened releases of pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products; and "Environmental Claim" means any
claim, action, cause of action, investigation or notice by any person
or entity alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the environment, of
any pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products at any location, whether
or not owned or operated by the Company or any of its subsidiaries or
(b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
(n) Except as otherwise set forth in the Prospectus, the
title of the Company and its subsidiaries to their oil and gas
properties and assets is consistent with industry standards. Certain
of the Company's and its subsidiaries' assets are subject to liens and
pledges in connection with their respective financings. Except as
otherwise set forth in the Prospectus, the Company has no notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or its subsidiaries to the
continued possession of their leased or subleased premises or property
under such leases or subleases, where such claim would have a material
adverse effect upon the Company's or its subsidiaries' business or
assets, taken as a whole.
(o) The Company and its subsidiaries are insured by
recognized financially sound and reputable insurance companies in such
amounts with such deductibles and covering such losses and risks as
are prudent and customary in the businesses in which they are engaged;
and neither the Company nor its subsidiaries believes that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated
by the Prospectus.
(p) The accountants who certified the financial
statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(q) The financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and changes
in financial position of the Company and its subsidiaries on the basis
stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such financial statements
and related schedules and notes
12
<PAGE> 13
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein.
(r) The Ryder Scott Company ("Ryder Scott"), who has
taken such actions with respect to the Company's estimates of its oil
and gas reserves as is set forth in the Prospectus, are independent
petroleum engineers with respect to the Company. The factual data
provided to Ryder Scott in the preparation of their estimates of the
Company's oil and gas reserves were accurate in all material respects
with the applicable requirements of Rule 4-10 of Regulations S-X and
Securities Act Industry Guide 2. The projections and assumptions
provided to Ryder Scott by the Company were reasonable based upon the
information available to the Company at the time such information was
so provided.
(s) Except as disclosed in the Prospectus, the Company
and its subsidiaries have such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate their respective
properties and to conduct their businesses as described in the
Prospectus, except where the failure to have such permits would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole; the Company and its subsidiaries have fulfilled and
performed all of their material obligations due to be performed with
respect to such permits and, except as disclosed in the Prospectus, no
event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such permit;
and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or its
subsidiary.
(t) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries. As of the date of this Agreement, the associated costs
and liabilities to the Company and its subsidiaries relating to such
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(u) No holder of any security of the Company has any
right to require registration of shares of Common Stock or any other
security of the Company except as
13
<PAGE> 14
set forth in the Prospectus, and no security holders of the Company
that have rights to require registration of any shares of Common Stock
or other securities of the Company are being excluded from
participating in the filing of the Registration Statement and the
consummation of the transactions contemplated therein except with
their express written consent.
(v) The Shares are listed on the NASDAQ Stock Market
National Market.
(w) Except as described in the Prospectus, the Company,
its subsidiaries which have been or are consolidated with the Company
for the purpose of filing income tax returns (the "Consolidated Tax
Subsidiaries") and any group of which the Company or any of its
Consolidated Tax Subsidiaries is or was a member for income tax
purposes have filed all foreign, federal, state and local tax returns
that are required to be filed or have requested extensions thereof and
have paid all taxes required to be paid by any of them and any related
or similar assessment, fine or penalty levied against any of them, to
the extent that any of the foregoing is due and payable, except for
any such tax, assessment, fine or penalty that is currently being
contested in good faith and by appropriate proceedings; and adequate
charges, accruals and reserves have been made in the applicable
financial statements referred to in Section 7(p) above in respect of
all foreign, federal, state and local taxes for all periods as to
which the tax liability of the Company, its Consolidated Tax
Subsidiaries and any group of which the Company or any of its
Consolidated Tax Subsidiaries is or was a member for income tax
purposes has not been finally determined.
(x) Neither the Company nor its subsidiaries have
violated any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or
state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case would reasonably be
expected to result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(y) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(z) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(aa) Except for the consent of the Selling Stockholder to
the number of Shares to be sold by it pursuant to Section 2 of this
Agreement, no vote or consent of any stockholder of the Company, and
no consent, approval or waiver of any party to or any person entitled
to any right or benefit under the Company's charter or amended by-laws
or
14
<PAGE> 15
any other instrument or agreement to which the Company is a party or
by which it is bound or under which it is entitled to any right or
benefit, is required in connection with the offering, sale or purchase
by the Underwriters of any of the Shares under this Agreement or the
consummation of any of the other transactions contemplated hereby.
(bb) The Company has not taken, directly or indirectly,
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(cc) Except as described in the Prospectus under
"Underwriting" and on the cover page, there are no claims, payments,
issuances, arrangements or understandings for services in the nature
of a finder's or origination fee with respect to the sale of the
Shares hereunder.
8. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents and warrants to, and covenants and agrees
with, each Underwriter as follows:
(a) The Selling Stockholder has been duly incorporated
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation and has full legal right, corporate
power and authority to enter into and perform its obligations under
this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(c) The execution and delivery by the Selling Stockholder
of, and the performance by the Selling Stockholder of its obligations
under, this Agreement will not contravene or conflict with, result in
a breach of, or constitute a default under, the charter or by-laws or
other organization documents of the Selling Stockholder or, to the
best knowledge of the Selling Stockholder, the terms of any agreement
or instrument to which the Selling Stockholder is a party or by which
it is bound or under which it is entitled to any right or benefit, any
provision of applicable law or any judgment, order, decree or
regulation applicable to the Selling Stockholder of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Selling Stockholder.
(d) The Selling Stockholder has, and on the Closing Date
will have, valid title to all of the Shares which may be sold by the
Selling Stockholder under this Agreement and the legal right and
power, and all authorizations and approvals required by law and under
its charter or by-laws or other organization documents, to sell,
transfer and deliver all of the Shares which may be sold by the
Selling Stockholder under this Agreement and to comply with its other
obligations hereunder and thereunder.
15
<PAGE> 16
(e) Assuming that the Underwriters purchase the Shares
which are sold by the Selling Stockholder pursuant to this Agreement
for value, in good faith and without notice of any adverse claim, the
delivery of the Shares which are sold by the Selling Stockholder
pursuant to this Agreement will pass title to such Shares, free and
clear of any security interests, claims, liens, equities and other
encumbrances.
(f) To the best knowledge of the Selling Stockholder, no
authorization, approval, consent or order of, or qualification,
registration or filing with, any court or governmental authority or
agency is required for the consummation by the Selling Stockholder of
the transactions contemplated in this Agreement, except such as have
been obtained under the Securities Act and the Rules and Regulations
and except such as may be required under the securities or Blue Sky
laws of any jurisdiction in connection with the purchase and
distribution of Shares by the Underwriters.
(g) The Selling Stockholder does not have any
registration or other similar rights to have any securities (debt or
equity) registered under the Securities Act by the Company except for
such rights as are described in the Prospectus under "Shares Eligible
for Future Sale."
(h) Except for the consent of the Selling Stockholder to
the number of Shares to be sold by the Selling Stockholder pursuant to
Section 2 of this Agreement, to the best knowledge of the Selling
Stockholder, no consent, approval or waiver under any instrument or
agreement to which such Selling Stockholder is a party or by which it
is bound or under which it is entitled to any right or benefit, is
required in connection with the offering, sale or purchase by the
Underwriters of any of the Shares which may be sold by such Selling
Stockholder under this Agreement or the consummation by the Selling
Stockholder of any of the other transactions contemplated hereby; and
the Selling Stockholder hereby consents to the offering and sale by
the Selling Stockholder of the number of Shares to be sold by it
pursuant to this Agreement and to the consummation of the other
transactions contemplated hereby and, to the extent that any of the
foregoing might conflict with, result in a breach of, or constitute a
default under any instrument or agreement to which the Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, the Selling Stockholder hereby
waives such conflict, breach or default.
(i) All information furnished by or on behalf of the
Selling Stockholder in writing expressly for use in the Registration
Statement and Prospectus is, and on the Closing Date will be, true,
correct and complete in all material respects, and does not, and on
the Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact necessary to make such
information not misleading; and the Selling Stockholder confirms as
accurate the number of shares of Common Stock set forth opposite the
Selling Stockholder's name in the Prospectus under the caption
"Principal Stockholders," as of the date of the Prospectus and on the
date hereof, prior to the sale of any Shares.
16
<PAGE> 17
(j) The Selling Stockholder has not taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to cause or result
in, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein not
misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any untrue statement or
omission or alleged untrue statement or omission based upon
information relating to (x) any Underwriter furnished in writing to
the Company by such Underwriter expressly for use therein or (y) the
Selling Stockholder furnished in writing to the Company by the Selling
Stockholder expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or before the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus
or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Underwriter shall
promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all reasonable
fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel shall
have been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such
17
<PAGE> 18
controlling person and the Company and such Underwriter or such
controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different
from or in addition to those available to the Company (in which case
the Company shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it
being understood, however, that the Company shall not, in connection
with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys for such
Underwriter and controlling persons, which firm shall be designated in
writing by S.G.Warburg & Co. Inc., and that all such fees and expenses
shall be reimbursed as they are incurred). The Company shall not be
liable for any settlement of any such action effected without its
written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless such
Underwriter and any such controlling person from and against any loss
or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request before the date of
such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
The Company's obligations under this paragraph (b) shall not impair
the Company's right to indemnification under Sections 9(c) and 9(d).
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, the Selling Stockholder
and any person controlling the Company or the Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the Underwriters but only with reference to
information relating to such Underwriter furnished in writing by such
Underwriter expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus. In case any action shall be
brought against the Selling Stockholder, the Company, any of its
directors, any such officer or any person controlling the Company or
the Selling Stockholder based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which
indemnity may be sought against an Underwriter, such Underwriter shall
have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Underwriter shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company,
its directors, any such officers and any
18
<PAGE> 19
person controlling the Company shall have the rights and duties given
to each Underwriter by Section 9(b) hereof.
(d) The Selling Stockholder agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement, each Underwriter and any person controlling
the Company or any such Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter
but only with reference to information relating to the Selling
Stockholder furnished in writing by the Selling Stockholder expressly
for use in the Registration Statement, the Prospectus or any
preliminary prospectus. In case any action shall be brought against
any Underwriter, the Company, any of its directors, any of its
officers or any person controlling the Company or such Underwriter
based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against the
Selling Stockholder, the Selling Stockholder shall have the rights and
duties given to the Company (except that if the Company shall have
assumed the defense thereof, the Selling Stockholder shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the Selling Stockholder), and the
Company and such Underwriter, their respective directors, any such
officers and any persons controlling the Company or such Underwriter
shall have the rights and duties given to each Underwriter by Section
9(b) hereof; provided, however, that the aggregate amount the Selling
Stockholder shall be liable for under this Section 9(d) shall not
exceed the amount of the aggregate gross proceeds of the Shares
offered and sold pursuant to the terms of this Agreement on behalf of
the Selling Stockholder to the public.
(e) If the indemnification provided for in this Section 9
is unavailable or insufficient to an indemnified party in respect of
any losses, claims, damages, liabilities or judgments referred to
herein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) such proportion as is appropriate to
reflect the relative benefits received by the Company and Selling
Stockholder on the one hand and of the Underwriters on the other hand
from the offerings of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or judgments, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in
the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and
the Selling Stockholder and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in
the table
19
<PAGE> 20
(including the footnotes thereto) on the cover of the Prospectus, bear
to the aggregate public offering price of the Shares. The relative
fault of the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Selling Stockholder or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or mission. The Underwriters' respective
obligations to contribute pursuant to this Section 9 are several in
proportion to the respective number of Shares they have purchase
hereunder, and not joint.
(f) The Company, the Selling Stockholder and the
Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 9 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 that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission and (ii) the Selling Stockholder shall
not be required to contribute any amount in excess of the aggregate
gross proceeds of the Shares offered and sold pursuant to the terms of
this Agreement on behalf of the Selling Stockholder to the public.
Notwithstanding the provisions of the Section 9, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 9 are not exclusive and shall not limit
any right or remedies which may otherwise be available to any
indemnified party at law or in equity.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or
contribution under this Section 9 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred.
(h) To the extent that both the Company and the Selling
Stockholder are subject to any losses, claims, damages, liabilities or
expenses as indemnifying parties under this Section 9, their
obligation under this Section 9 shall be several and not joint.
20
<PAGE> 21
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) The Underwriter shall have received on the Closing
Date a certificate, dated the Closing Date and signed by the President
or Senior Vice President and the principal financial or accounting
officer of the Company, to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct on and as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
(b) (i) Since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, there shall
not have been any material adverse change, or any development
involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, affairs or business
prospects, whether or not arising in the ordinary course of business,
of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus there shall
not have been any change, or any development involving a prospective
material adverse change, in the capital stock or in the long-term debt
of the Company from that set forth in the Registration Statement and
Prospectus, (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus and (iv) on
the Closing Date the Underwriter shall have received a certificate
dated the Closing Date, signed by the President or Senior Vice
President and the principal financial or accounting officer of the
Company, confirming the matters set forth in this paragraph (b) of
this Section 10.
(c) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Jenkens & Gilchrist, a Professional Corporation,
counsel for the Company, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the
laws of the State of Delaware with full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement
thereto) and to enter into and perform its obligations under
this Agreement, and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure so to register or
qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net
worth or results of operations of the Company and its
subsidiary taken as a whole.
21
<PAGE> 22
(ii) The Company's subsidiary is a corporation
duly incorporated and validly existing in good standing under
the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease, and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment
or supplement thereto); and all the outstanding shares of
capital stock of the Company's subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable, and, to the knowledge of such counsel, are
owned by the Company directly, free and clear of any security
interest, or lien, adverse claim, equity or other encumbrance
except for the security interest granted to INCC pursuant to
the Credit Agreement.
(iii) The Shares to be issued and sold by the
Company hereunder, when issued and delivered to the
Underwriters against payment therefore as provided by this
Agreement, will have been validly issued and will be fully
paid and non-assessable, and the issuance of such Shares is
not subject to any statutory, charter or, to the knowledge of
such counsel, contractual preemptive or similar rights; the
form of certificates used to evidence the Common Stock is in
due and proper form and complies with all applicable
requirements of the charter and by-laws of the Company and the
General Corporation Law of the State of Delaware; the
authorized capital stock of the Company is as set forth under
the caption "Capitalization" in the Prospectus; the authorized
capital stock of the Company conforms in all material respects
as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital
Stock;" the four million shares of Common Stock issued in the
Company's public offering that closed on August 6, 1993 and
the shares of Common Stock owned by the Selling Stockholder
have been duly issued and are fully paid, non-assessable and
not subject to any preemptive or, to the knowledge of such
counsel, contractual preemptive rights or similar rights.
(iv) The Shares to be sold by the Selling
Stockholder to the several Underwriters hereunder have been
duly authorized, and when delivered to the Underwriters
against payment therefor as provided by this Agreement, will
have been validly issued and will be fully paid and
non-assessable, and are not subject to any preemptive, or to
the knowledge of such counsel, contractual preemptive or
similar rights.
(v) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent
that rights to indemnification thereunder may be limited by
federal or state securities laws and policies embodied
therein, or to the extent that such obligations are subject to
or affected or limited by (i) applicable liquidation,
conservatorship, bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws affecting
creditors' rights or in the collection of debtors' obligations
generally from time to time in effect, or (ii) general
principles of
22
<PAGE> 23
equity (whether enforceability is considered in a proceeding
in equity or at law), including the qualification that the
availability of the remedy of specific performance or
injunction relief or other equitable remedies is subject to
the discretion of the court before which any such proceeding
therefor may be brought and including standards of good faith,
fair dealing and reasonableness that may be applied by a court
to the exercise of certain rights and remedies.
(vi) The Registration Statement has become
effective under the Securities Act; to such counsel's
knowledge, any required filings of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) of the Rules and
Regulations have been made in the manner and within the time
period required by such Rule 424(b); and, to such counsel's
knowledge, no stop order suspending its effectiveness has been
issued and no proceedings for that purpose are, to the
knowledge of such counsel, pending before or contemplated by
the Commission.
(vii) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which
are required to be disclosed in the Registration Statement,
other than those disclosed therein.
(viii) The statements in the Prospectus under "Risk
Factors--Shares Eligible for Future Sale," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations of the Company--Capital Resources and Liquidity,"
"Business--Regulation," "Business--Title to Properties,"
"Selling Stockholder," "Shares Eligible for Future Sale,"
"Description of Capital Stock," and "Underwriting," in each
case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein,
when read together with related information contained in the
Incorporated Documents, fairly present, in all material
respects, the information called for with respect to such
legal matters, documents and proceedings referred to therein
and fairly summarize, in all material respects, the matters
referred to therein (it being understood that such counsel
expresses no opinion as to factual matters or as to the
financial statements or schedules or other financial,
statistical or reserve data included in the Registration
Statement or Prospectus or any amendments or supplements
thereto specifically).
(ix) To such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, and the descriptions
thereof and references thereto are correct in all material
respects.
(x) To such counsel's knowledge, neither the
Company nor its subsidiary is in violation of its respective
charter or bylaws and, to such counsel's
23
<PAGE> 24
knowledge, neither the Company nor any of its subsidiaries is
in default in the performance of any obligation, debenture,
note or any other evidence of indebtedness or in any other
agreement, indenture or instrument, except for any default
which will not have a material adverse effect to the Company
and its subsidiary taken as a whole.
(xi) The execution, delivery and performance of
this Agreement by the Company, the issuance and the sale of
the Shares to be sold to the several Underwriters by the
Company and the sale of the Shares to be sold to the several
Underwriters by the Selling Stockholder hereunder will not
require the Company to obtain any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as
such has been obtained or may be required under the Securities
Act and the Rules and Regulations or other securities or Blue
Sky laws) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the
charter or bylaws of the Company or its subsidiary or, to such
counsel's knowledge, any agreement indenture or other
instrument or, to such counsel's knowledge, violate or
conflict with any laws, administrative regulations or rulings
or court decrees applicable to the Company or its subsidiaries
or their respective properties except for any such conflict,
breach, violation or default that is not material to the
business of the Company and its subsidiary taken as a whole.
(xii) Such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or its subsidiary is a party or to which any of their
respective property is subject which is required to be
described in the Registration Statement or the Prospectus and
is not so described.
(xiii) To such counsel's knowledge, (1) except as
described in the Prospectus, no holder of any security of the
Company has any right to require registration of shares of
Common Stock or any other security of the Company and (2)
there are no rights of any security holders of the Company to
require registration of any shares of Common Stock or other
securities of the Company because of the filing of the
Registration Statement and the consummation of the
transactions contemplated therein, except such rights as have
been effectively waived.
(xiv) Except for the consent of the Selling
Stockholder to the number of Shares to be sold by it pursuant
to Section 2 of this Agreement, no vote or consent of any
stockholder of the Company, and no consent, approval or waiver
of any party to or any person entitled to any right or benefit
under the Company's charter or by-laws or, to such counsel's
knowledge, any other instrument or agreement to which the
Company is a party or by which it is bound or under which it
is entitled to any right or benefit, is required in connection
with the offering, sale or purchase
24
<PAGE> 25
by the Underwriter of any of the Shares under this Agreement
or the consummation of any of the other transactions
contemplated by this Agreement.
(xv) To such counsel's knowledge, there are no
persons with registration or other similar rights to have any
securities (debt or equity) (A) registered pursuant to the
Registration Statement or included in the offerings
contemplated by this Agreement except for the Selling
Stockholder or (B) except for such rights as are accurately
described, in all material respects, in the Prospectus under
"Shares Eligible for Future Sale", except such rights as have
been waived.
(xvi) The Company is not an "investment company"
or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act.
(xvii) Each of the Incorporated Documents (except
for the financial statements, schedules and notes thereto and
other financial, statistical and reserve data, as amended,
included therein, as to which counsel need not express any
opinion), when they were filed (or, if an amendment with
respect to any Incorporated Document was filed, when such
amendment was filed) complied as to form in all material
respects with the Exchange Act and the rules and regulations
promulgated thereunder.
(xviii) The Registration Statement and the Prospectus
and any supplement or amendment thereto (except for financial
statements, schedules and other financial, statistical and
reserve data, as to which no opinion need be expressed) comply
as to form in all material respects with the Securities Act
and the Rules and Regulations.
(xix) Such counsel has participated in conferences
with officers and other representatives of the Company and
representatives of the independent public accountants for the
Company and with your representatives at which the contents of
the Registration Statement and the Prospectus, and any
supplements or amendments thereto, and related matters were
discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as
specified above in clause viii), and any supplements or
amendments thereto, on the basis of the foregoing, nothing has
come to such counsel's attention that would lead them to
believe that either the Registration Statement or any
amendments thereto at the time the Registration Statement or
such amendments became effective, contained an untrue
statement of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that
such counsel need express no belief as to the financial
statements or schedules or other financial, statistical or
reserve data included in the
25
<PAGE> 26
Registration Statement or the Prospectus or any amendments or
supplements thereto).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of Texas and New York, the General Corporation Law of
the State of Delaware, or the federal law of the United States, to the
extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the Closing Date, shall be satisfactory
in form and substance to the Underwriter, shall expressly state that
the Underwriter may rely on such opinion as if it were address to them
and shall be furnished to the Underwriter) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriter, provided that Jenkens & Gilchrist, a
Professional Corporation, shall further state that they believe that
they and the Underwriters are justified in relying upon such opinion
of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company
and public officials.
The opinion described in this paragraph (c) shall be rendered
to you at the request of the Company and shall so state therein.
References to the Prospectus in this paragraph (c) include any
supplements thereto at the Closing Date.
(d) You shall have received on the Closing Date the
opinion of Ropes & Gray, counsel for the Selling Stockholder, dated
the Closing Date, to the effect that:
(i) The Selling Stockholder has full right, power
and authority to enter into this Agreement. The execution,
delivery and performance of this Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated thereby will not conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject, nor will such actions
result in any violation of the provisions of the Selling
Stockholder's charter or by-laws 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
Selling Stockholder or the property or assets of the Selling
Stockholder; and, except for the registration of the Shares
under the Securities Act of 1933 and such consents, approvals,
authorizations, registrations, qualifications, filings or
registrations as may be required under the Securities Exchange
Act of 1934, as amended and applicable state securities laws
in connection with the purchase and distribution of the Shares
by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby.
26
<PAGE> 27
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(iii) Immediately prior to the delivery of certificates for
the Shares by the Selling Stockholder to the Underwriters, the
Selling Stockholder was the sole beneficial owner of the
Shares to be sold by the Selling Stockholder under this
Agreement, and such Shares were free and clear of all liens in
favor of the issuer and any adverse claims. Upon completion
of the sale of the Shares by the Selling Stockholder to the
Underwriters, assuming that each of the several Underwriters
has purchased such Shares in good faith and without notice of
any such lien or adverse claim or any other adverse claim
within the meaning of the Uniform Commercial Code, such
Underwriters will have all acquired all rights of the Selling
Stockholder in such Shares free of any adverse claim.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the Commonwealth of Massachusetts, the general corporation law of
the State of Delaware, the federal law of the United States, to the
extent such counsel deems proper and specified in such opinion, upon
the opinion (which shall be dated the Closing Date, shall be
satisfactory in form and substance to the Underwriter, shall be
addressed to or shall expressly state that the Underwriter may rely
upon such opinion as if it were addressed to them and shall be
furnished to the Underwriter) of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for
the Underwriter,provided that such counsel shall further state that
they believe that they and the Underwriter are justified in relying
upon such opinion of other counsel, and (B) as to matters of fact, to
the extent they deem proper, on representations of the Selling
Stockholder contained herein and on certificates of the Selling
Stockholder and public officials.
The opinions of such counsel described in this paragraph (d)
above shall be rendered to you at the request of the Selling
Stockholder and shall so state therein.
(e) The Underwriters shall have received on the Closing
Date an opinion, dated the Closing Date, of Holme Roberts & Owen LLC,
counsel for the Underwriters, as to the matters referred to in clauses
(v), (vi), (viii) (but only with respect to the statements under the
caption "Underwriting") and (xviii) of the foregoing Section 10(c).
In giving such opinion with respect to the matters covered by clause
(xviii)(2) such counsel may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(f) The Underwriters shall have received letters dated as
of the date hereof and as of the Closing Date, in form and substance
satisfactory to you, from Ernst & Young LLP, independent public
accountants, with respect to the financial statements and
27
<PAGE> 28
certain financial information relating to the Company contained in the
Registration Statement and the Prospectus.
(g) The Underwriters shall have received letters dated as
of the date hereof and as of the Closing Date, in form and substance
satisfactory to you, from Ryder Scott, with respect to the oil and gas
reserve information contained in the Registration Statement and the
Prospectus.
(h) The Underwriters shall have received from the Company
and the Selling Stockholder the lock-up agreements specified in
Section 2 hereof.
(i) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by the Selling
Stockholder, to the effect that the representations and warranties of
the Selling Stockholder set forth in this Agreement are true and
correct on and as of the Closing Date and that the Selling Stockholder
has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
(j) At the date of this Agreement and at the Closing
Date, the Company shall have furnished to the Underwriters a
certificate of the Company, signed by the principal financial or
accounting officer of the Company, in form and substance satisfactory
to the Underwriters, to the effect that the signer of such certificate
has performed (or members of his staff acting under his supervision
have performed) certain specified procedures as a result of which such
signer has determined that certain numerical and statistical
information set forth in the Registration Statement and the
Prospectus, and any supplements to the Prospectus (and not covered by
the letter or letters delivered pursuant to Section 10(f) above)
specified by the Underwriter, has been derived from, and agrees with,
the records of the Company.
(k) The Company and the Selling Stockholder shall not
have failed at or before the Closing Date to perform or comply with
any of the agreements herein contained and required to be performed or
complied with by the Company and the Selling Stockholder at or before
the Closing Date.
The obligation of the Underwriter to purchase Additional Shares
hereunder is subject to the satisfaction on and as of the Option Closing Date
of the conditions set forth in this Section 10, except that, if the Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in Section 10 shall be dated as of the Option Closing Date
and the opinions called for by Sections 10(c), 10(d) and (e) shall be revised
to reflect the sale of the Additional Shares.
11. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
28
<PAGE> 29
This Agreement may be terminated at any time before the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or
otherwise, of the Company or its subsidiary or the earnings, affairs, or
business prospects of the Company or its subsidiary, whether or not arising in
the ordinary course of business, which would, in your reasonable judgment, make
it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in your reasonable judgment, is material and adverse and would, in your
reasonable judgment, make it impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus, (iii) the suspension or
material limitation of trading in securities on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ Stock Market National Market or
limitation on prices for securities on any such exchange or the National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your reasonable opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or its subsidiary, (v) the declaration of a banking
moratorium by either federal or New York authorities or (vi) the taking of any
action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the financial markets in the United States.
12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows; (a) if to the Company, to Cairn
Energy USA, Inc. 8235 Douglas Avenue, Suite 1221, Dallas, Texas 75225,
Attention: Michael R. Gilbert, (b) if to the Selling Stockholder, the Phemus
Corporation, c/o John Halsted, Harvard Management Company, 600 Atlantic Avenue,
Boston, Massachusetts 02203, with a copy to Larry Jordan Rowe, Ropes & Gray,
One International Place, Boston, Massachusetts 02110, and (c) if to any
Underwriter, S.G.Warburg & Co. Inc., Attention: Syndicate Department, 277 Park
Avenue, New York, New York 10172, with a copy to Steven A. Cohen, Holme
Roberts & Owen LLC, 1700 Lincoln Street, Suite 4100, Denver, Colorado 80203,
or in any case to such other address as the person to be notified may have
requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors, the
Selling Stockholders and of the Underwriters set forth in or made pursuant to
this Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment of the Shares, regardless of (i) any
investigation, or statement as to the results thereof made by or on behalf of
the Underwriters or by or on behalf of the Company or the Selling Stockholder,
the officers or directors of the Company or the Selling Stockholder or any
controlling person of the Company or the Selling Stockholder, (ii) acceptance
of the Shares and payment for them hereunder and (iii) termination of this
Agreement.
29
<PAGE> 30
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company or the Selling Stockholder to
comply with the terms or to fulfill any of the conditions of this Agreement,
the Company agrees to reimburse the Underwriters for all out-of-pocket expenses
(including the fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided herein, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Selling Stockholder, the Underwriters, any controlling persons referred to
herein and their respective successors and assigns, all as and to the extent
providing in this Agreement, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Shares from any of the several
Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
[SIGNATURE PAGE(S) FOLLOW]
30
<PAGE> 31
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Selling Stockholder and the Underwriter.
Very truly yours,
CAIRN ENERGY USA, INC.
By:
-----------------------------------
Name:
Title:
PHEMUS CORPORATION
the Selling Stockholder
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
S.G.Warburg & Co. Inc.
Howard, Weil, Labouisse, Friedrichs
Incorporated
Petrie Parkman & Co., Inc.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
S.G.WARBURG & CO. INC.
By:
-----------------------------------
31
<PAGE> 1
2,750,000 SHARES
CAIRN ENERGY USA, INC.
AGREEMENT AMONG UNDERWRITERS
S.G.WARBURG & CO. INC.
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
PETRIE PARKMAN & CO., INC.
As Representatives of the Several Underwriters
c/o S.G.WARBURG & CO. INC.
277 Park Avenue
New York, New York 10172
Dear Sirs:
We hereby agree with you as follows with respect to (i) the purchase by
you and the other Underwriters (the "Underwriters") named in Schedule I to the
Underwriting Agreement annexes to this Agreement as Exhibit A (the
"Underwriting Agreement"), including ourselves, severally, of an aggregate of
2,750,000 shares of common stock, par value $.01 per share, ("Common Stock") of
Cairn Energy USA, Inc. (the "Company"), 750,000 of such shares to be issued and
sold by the Company, and 2,000,000 of such shares to be sold by Phemus
Corporation, a Massachusetts corporation (the "Selling Stockholder") (the
750,000 shares of Common Stock being issued and sold to the Underwriters by the
Company and the 2,000,000 shares of Common Stock being sold to the Underwriters
by the Selling Stockholder are herein collectively referred to as (the "Firm
Shares")), (ii) the purchase, if you shall have determined that the
Underwriters shall purchase any of the additional 412,500 shares of Common
Stock (the "Additional Shares") which the Company will agree to issue and sell
to the Underwriters pursuant to Section 2 of the Underwriting Agreement, from
the Company of the Additional Shares, (iii) the offering of all such Firm
Shares and Additional Shares (collectively, "Shares").
1. REGISTRATION STATEMENT. We confirm that we have examined the
registration statement relating to the Shares as amended to the date of this
Agreement and we are familiar with the terms of the securities to be offered
and the other terms of the offering which are to be reflected in the proposed
amendment to the registration statement (or, if the registration statement has
become effective under the Securities Act of 1933, as amended (the "Securities
Act"), which are deemed to be included in the registration statement pursuant
to Rule 430A under the Securities Act). The registration statement as amended
at the time when it becomes effective, including the information, if any,
deemed to be a part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"Registration Statement;" and the prospectus in the form first used to confirm
sales of shares is hereinafter referred to as the "Prospectus."
We further confirm that:
a. Insofar as it relates to us, the information in the
Registration Statement as amended to this date and in the proposed
amendment is correct and complete and is not misleading.
b. We are aware of and are willing to accept our
responsibilities under the Securities Act as an Underwriter to be named
in the Registration Statement.
<PAGE> 2
c. We are willing to proceed with the underwriting of the
Shares in the manner contemplated in the Underwriting Agreement and
described in the Prospectus.
d. You are authorized, in your discretion and on our
behalf, with approval of counsel for the Underwriters, to approve any
proposed amendment to the Prospectus and to approve of or to object to
any further amendments to the Registration Statement, or amendments or
supplements to the Prospectus.
2. UNDERWRITING AGREEMENT. We authorize you to execute ad
deliver, on our behalf, the Underwriting Agreement in substantially the form
attached hereto as Exhibit A and to make the representations and warranties, on
our behalf, as set forth therein. The number of Firm Shares set forth opposite
each Underwriter's name in Schedule I to the Underwriting Agreement is referred
to in this Agreement as the "original underwriting commitment" of such
Underwriter, and the ratio which such original underwriting commitment bears to
the total number of Firm Shares is referred to in this Agreement as the
"underwriting proportion" of such Underwriter.
3. AUTHORIZATION UNDER UNDERWRITING AGREEMENT. The Underwriting
Agreement provides that the obligations of the Underwriters thereunder are
subject, among other things, to the condition that the Registration Statement
shall have become effective not later than 5:00 p.m. (New York City time) on
the date of the Underwriting Agreement. You are hereby authorized, in your
discretion, to extend such time to not later than 1:00 p.m. (New York City
time) on the date following such date and, with the consent of the
Underwriters, including yourselves, who have agreed to purchase in the
aggregate at least a majority of the Firm Shares, to agree to one or more
subsequent extensions of such date and to take on our behalf any action that
may be necessary in your sole discretion to take the following action with
respect to the Underwriting Agreement:
a. To postpone the Closing Date or the Option Closing
Date (as such terms are defined in the Underwriting Agreement) or,
except as provided above, to extend any other date specified in the
Underwriting Agreement.
b. To exercise any right of cancellation or termination.
c. To arrange for the purchase by other persons
(including yourselves or any other Underwriters) of any of the Shares
not taken up by any defaulting Underwriter or by the other
Underwriters.
d. To give notice on our behalf of your determination
that the Underwriters shall purchase Additional Shares from the
Company.
4. METHOD OF OFFERING. We authorize you, as representatives of
the several Underwriters, to manage the underwriting and the public offering of
the Shares and to take such action in connection therewith and in connection
with the purchase, carrying and resale of the Shares, including without
limitation the following, as you in your sole discretion deem appropriate or
desirable:
a. To determine the time of the initial public offering
of the Shares, the initial public offering price and the Underwriters'
gross spread and whether the Underwriters shall purchase any Additional
Shares and the amount, if any, of Additional Shares to be so purchased.
b. To make any changes in the public offering price or
other terms of the offering.
c. To make changes in those who are to be Underwriters
and in the respective numbers of the Firm Shares to be purchased by
them, provided that our original underwriting commitment shall not be
changed without our consent.
-2-
<PAGE> 3
d. To determine all matters relating to advertising and
communications with dealers or others.
e. To reserve for sale and to sell to institutions or
other retail purchasers, for our account, such of our Shares as you may
determine; provided, however, that such reservations and sales shall be
made for the respective accounts of the several Underwriters as nearly
as practicable in their respective underwriting proportions, except for
such sales for the account of a particular Underwriter designated by
such a purchaser.
g. To fix the concession to dealers and the reallowance
to dealers and, after the initial public offering of the Shares, to
make changes in the concession and reallowance.
h. At any time with respect to unsold Shares retained by
us: (A) to reserve any such Shares for sale by you for our account or
(B) to purchase any such Shares which in your opinion are needed to
enable you to make deliveries for the accounts of the several
Underwriters pursuant to this Agreement. Such purchase may be made at
the public offering price or, at your option, at such price less all or
any part of the concession to dealers.
i. To charge the account of any Underwriter with an
amount equal to the concession allowed to dealers in respect of Shares
purchased under the Underwriting Agreement by such Underwriter and not
sold by us for its account (and Shares which we believe have been
substituted therefor) which may be delivered against a purchase
contract made by us for the account of any Underwriter before the
termination of all of the provisions referred to in Section 5 hereof or
the covering by S.G.Warburg & Co. Inc. of any short position created by
S.G.Warburg & Co. Inc. for the accounts of the Underwriters pursuant to
Section 5 hereof, or in lieu of such charge, require such Underwriter
to repurchase on demand at the total cost thereof (including
commissions), plus transfer taxes, any such Shares so delivered.
We understand that you will advise us when the Shares are released for
public offering and of the number of Shares sold or reserved for sale for our
account. We shall retain for direct sale any Shares purchased by us and not so
sold or reserved. Direct sales will be made in accordance with the terms of
offering set forth in the Prospectus. With your consent, we may obtain release
from you for direct sale of any Shares held by you for sale pursuant to
subparagraphs (e) and (f) above but not sold and paid for. To the extent
Shares so released had been reserved for sale to dealers, the number of Shares
reserved for our account for sale to dealers shall be correspondingly reduced.
We will advise you from time to time, at your request, of the number of Shares
retained by us which remain unsold and of the number of Shares remaining unsold
which were delivered to us pursuant to the last paragraph of this Section 4.
We agree that without your consent and the prior specific written
approval of our customer we will not sell to any account over which we exercise
discretionary authority any of the Shares which we have agreed to purchase
under the Underwriting Agreement.
-3-
<PAGE> 4
If, before the termination of this Agreement, you shall purchase or
contract to purchase any of the Shares sold directly by us, in your discretion
you may (i) sell for our account the Share so purchased and debit or credit our
account for the loss or profit resulting from such sale, (ii) charge our
account with an amount equal to the concession to dealers with respect thereto
and credit such amount against the cost thereof or (iii) require us to purchase
such Shares at a price equal to the total cost of such purchase including
commissions and transfer taxes on redelivery. Certificates for the Shares
delivered on such repurchase need not be identical to the certificates for the
Shares so purchased by you.
5. TRADING AUTHORIZATIONS. We authorize you, during the term of
this Agreement in your discretion:
a. To make purchases and sales of shares of Common Stock
in the open market or otherwise (in addition to purchase and sales made
under the authority of Section 4), either for long or short account, on
such terms and at such prices as you may determine.
b. To arrange for sales of the Shares pursuant to Section
4 above, the over-allotment, and to make purchases for the purpose of
covering any over-allotment so made.
All such purchases and sale and over-allotments shall be made for the
respective accounts of the several Underwriters as nearly as practicable in
their respective underwriting proportions; provided, however, that at no time
shall our net commitment resulting from such purchases and sales, either for
long or short account, or pursuant to such over-allotments, exceed 15% of our
original underwriting commitment and provided that in determining our net
commitment for account here shall be subtracted the maximum number of
Additional Shares which we are entitled to purchase. We agree to take up at
cost on demand any shares of Common Stock so purchased for our account and to
deliver on demand any shares so sold or so over-allotted for our account.
Without limiting the generality of the foregoing, you may buy or take over for
the respective accounts of the several Underwriters, in the proportion and
within the limits set forth, at the price at which reserved, any of the Shares
reserved for sale by you but not sold and paid for, for such purposes as you
may determine, including, but not limited to, the covering of over-allotments
and short sales.
You will notify us promptly if you engage in any stabilization
transaction requiring reports to e filed pursuant to Rule 17a-2 under the
Securities Exchange Act of 1934, as amended, and notify us of the date of
termination of stabilization. S.G.Warburg & Co. Inc. shall prepare and
maintain such records as are required to be maintained by it as manager
pursuant to such Rule 17a-2.
The provisions of this Section 5 shall terminate at the close of
business on the 30th full business day after the Shares are released by you for
sale of the public, unless any of such provisions are terminated as such
earlier time as we may determine by telegraphic notice to that effect sent to
each Underwriter.
6. LIMITATION ON TRANSACTIONS BY UNDERWRITERS. Except as
permitted by you, we will not during the term of this Agreement bid for,
purchase, sell or attempt to induce others to purchase or sell, directly or
indirectly, any Common Stock other than (i) as provided in the Underwriting
Agreement and in this Agreement, (ii) purchases from or sales to dealers of the
Shares at the public offering price less all or any part of the reallowance to
dealers or (iii) purchases or sales by us of any Common Stock as broker on
unsolicited orders for the account of others.
We represent that we have not participated in any transaction
prohibited by the preceding paragraph and that we have at all times complied
with the provisions of Rule 10b-6 of the Securities Exchange Commission
applicable to this offering.
We may, with your prior consent, make purchases of the Shares from and
sales to other Underwriters at the public offering price, less all or any part
of the concession to dealers.
-4-
<PAGE> 5
7. DELIVERY AND PAYMENT. At 9:00 a.m. (New York City time) on the
Closing Date, we will deliver to you at the office of S.G.Warburg & Co. Inc.,
277 Park Avenue, New York, New York 10772, a certified or official bank check,
payable in New York Clearing House funds, to the order of S.G.Warburg & Co.
Inc. or otherwise as you may direct, for either (i) an amount equal to the
public offering price less the selling concession in respect of the Firm Shares
to be purchased by us or (ii) an amount equal to the public offering price less
the selling concession in respect of such of the Firm Shares to be purchased by
us as shall have been retained by or released to us for direct sale, as you
shall direct. At 9:00 a.m. (New York City time) on the Option Closing Date (as
defined in Section 4 of the Underwriting Agreement), if any, we will make
similar payments as you may direct for any Additional Shares to be purchased by
us. You shall use such funds to make payment on our behalf to the Company of
the purchase price for our Firm Shares or Additional Shares, as the case may
be. Any balance shall be held by you for our account. If you have not
received our funds as requested, you may in your discretion make any such
payment on our behalf and we will promptly deliver funds to you in the amount
so requested. Any such payment by you will not relieve us from any of our
obligations under this Agreement or under the Underwriting Agreement. Unless
we promptly give you written instructions otherwise, if transactions in the
Shares may be settled through the facilities of the Depository Trust Company,
payment for and delivery of shares purchase by us will be made through such
facilities, if we are a member, or, if we are not a member, settlement may be
made thorough our ordinary correspondent who is a member.
We authorize you, in carrying out the provisions of this Agreement, in
your discretion, to arrange loans for our account, to advance your funds to our
account, charging current interest rates, and to hold or pledge as security
therefor all or any party of the Shares which you may be holding for our
account. Any lender is hereby authorized to accept your instructions with
respect to such loans, and we authorize you to execute and deliver notes or
other instruments in connection therewith.
You shall promptly remit to us or credit to our account (i) the
proceeds of any loan taken down on our behalf and (ii) upon payment to you for
any Shares sold for our account, an amount equal either to the purchase price
paid by us or the price received by you therefor, as you may determine.
We authorize you to take delivery of certificates for our Shares,
registered as you may direct in order to facilitate deliveries, and to deliver
any Shares reserved for us against sale. You will deliver to us certificates
for our unreserved Shares and certificates for our reserved but unsold Shares
as soon as practicable after the termination of the provisions referred to in
Section 10.
Certificates for all other Shares which you then hold for our account
shall be delivered to us upon termination of this Agreement, or prior thereto
in your discretion, and certificates for any such Shares may at any time be
delivered to us for carrying purposes only, subject to redelivery upon demand.
If, upon termination of this Agreement, an aggregate of not more than 10% of
the Shares remains unsold, you may, in your discretion, sell such Shares at
such prices as you may determine.
8. BLUE SKY QUALIFICATION. Upon request, you will inform us as to
the jurisdictions in which you have been advised by counsel that the Shares
have been registered or qualified for sale under the respective securities or
Blue Sky laws, but you do not assume any responsibility or obligations as to
our right to sell the Shares in any jurisdiction.
If required, you will file or cause to be filed a Further State Notice
with the Department of State of New York.
9. INDEMNIFICATION AND CERTAIN CLAIMS. Each Underwriter,
including yourselves, agrees to indemnify and hold harmless each of the other
Underwriters, and each person, if any, who controls any other Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and to
reimburse their expenses, all to the extent, if any, and upon the terms that we
agree to indemnify and hold harmless the Company, its director, its officers
who signed the
-5-
<PAGE> 6
Registration Statement and any person controlling the Company and to reimburse
their expenses, as set forth in the Underwriting Agreement.
We agree that in respect of any matters connected with, or action taken
by you pursuant to, this Agreement you shall act only as agents of the
Underwriters and you shall be under no lability to us in any such respect or in
respect of the form of, or the statements contained in, or the validity of, any
preliminary prospectus or the Registration Statement or the Prospectus, or any
amendment or supplement to any of them, or for any report or other filing made
by you for us on our behalf under this Agreement, except for want of good faith
and for obligations expressly assumed by you herein and no obligations on your
part will be implied or inferred from confirmation or acceptance of this
Agreement.
We will pay our proportionate share (based on our underwriting
proportion) of (i) all expenses incurred by you in investigating or defending
against any claim or proceeding which is asserted or instituted by any party
(including any governmental or regulatory body) other than an Underwriter based
upon the claim that the Underwriters constitute an association, unincorporated
business or other separate entity, or relating to the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus and (ii) any liability incurred by you in respect of any such claim
or proceeding, whether such liability shall be the result of any settlement
agreed to by you, other than any such liability as to which you actually
receive indemnity pursuant to the first paragraph of this Section 9 or pursuant
to Section 9 of the Underwriting Agreement.
10. TERMINATION AND SETTLEMENT. This Agreement shall terminate (i)
on the 30th business day after the initial public offering of the Shares, (ii)
on such earlier date as you may determine or (iii) on the termination of the
Underwriting Agreement if the Underwriting Agreement shall be terminated as
permitted by its terms provided, however, that S.G.Warburg & Co. Inc. may in
its discretion extend this Agreement for a further period or periods not
exceeding an aggregate of 30 days. You may at your discretion, on notice to us
before the termination of this Agreement, terminate or suspend the
effectiveness of Sections 4, 5 and 6 hereof or any part of them or alter any
of the terms or conditions of offering determined pursuant to Section 4 hereof.
No termination or suspension pursuant to this Section shall affect your
authority under Section 5 hereof to cover any short position under this
Agreement.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder shall cease, except (i) the mutual obligations to settle
accounts hereunder, (ii) our obligation to pay any transfer taxes which may be
assessed and paid on account of any sales hereunder for our account, (iii) our
obligations with respect to purchases which may be made by you from time to
time thereafter to cover any short position incurred under this Agreement and
(iv) the obligations of any defaulting Underwriter, all of which shall continue
until fully discharged. If any other Underwriter defaults in its obligations
under this Agreement we will assume our proportionate share (determined on the
basis of the respective underwriting proportions of the non-defaulting
Underwriters) of such obligations without relieving the defaulting Underwriter
from liability.
The accounts arising pursuant to this Agreement shall be settled and
paid as soon as practicable after termination except that you may reserve such
amount as you deem advisable to cover any additional contingent expenses.
You are authorized at any time:
a. To make partial or total distributions of credit
balances for the payment of debit balances.
b. To determine the amounts to be paid to or by us, which
determination will be final and conclusive.
c. As compensation for your services in connection with
this Agreement, to charge our account and pay to your selves, when
final accounting is made, an amount per Share to be determined by
-6-
<PAGE> 7
you (not to exceed 20% of the Underwriters' gross spread per Share)
for each Share which we have agreed or shall become committed to
purchase from the Company.
d. To charge our account with (i) all transfer taxes on
sales made for our account and (ii) our underwriting proportion of all
expenses (other than transfer taxes) incurred by you, as
representatives of the several Underwriters, in connection with the
transactions contemplated by this Agreement.
e. To hold any of our funds at any time in your hands
with your general funds without accountability for interest.
11. MISCELLANEOUS. Nothing in this Agreement shall constitute us
partners with you or with the other Underwriters and the obligations of
ourselves and of each of the other Underwriters are several and not joint. Each
Underwriter elects to be excluded from the application of Subchapter K, Chapter
1, Subtitle A, of the Internal Revenue Code of 1986. Default by any
Underwriter with respect to the Underwriting Agreement shall not release us
from any of our obligations thereunder or hereunder.
Your authority under this Agreement and the Underwriting Agreement may
be exercised by you jointly or by S.G.Warburg & Co. Inc. on your behalf.
Any notice from you to us shall be deemed to have been given if mailed,
telegraphed, transmitted by facsimile or hand delivered, or telephoned and
subsequently confirmed in writing, to our address in the Underwriters'
Questionnaire which we have furnished to you for transmittal to the Company.
We confirm that we are a member in good standing of the NASD or that we
are a foreign bank or dealer, not eligible for membership in the NASD. In
making sales of the Shares, if we are such a member, we agree to comply with
all applicable rules of the NASD, including, without limitation, the NASD's
Interpretation with Respect to Free-Riding and Withholding and Section 24 of
Article III of the NASD's Rules of Fair Practice or, if we are such a foreign
bank or dealer, we agree to comply with such Interpretation and Section 8, 24
and 36 of such Article as though we were such a member and Section 25 of such
Article as it applies to non-member broker or dealer in a foreign country. We
also confirm that our commitment to purchase Shares pursuant to the
underwriting Agreement will not result in a violation of Rule 15c3-1 under the
Exchange Act or of any restriction imposed upon us by any such exchange or any
governmental authority.
We agree that we will comply with such prospectus delivery requirements
of rule 15c2-8 under the Exchange Act as are applicable to us.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
This Agreement is being executed by us and delivered to you in
duplicate. Please indicate your receipt of identical agreements from each of
the other Underwriters by confirming this Agreement, whereupon it shall
constitute a binding agreement between us.
Very truly yours,
-----------------------------------
Name of Underwriter
By:
--------------------------------
Authorized Signatory or
Attorney-in-Fact
-7-
<PAGE> 8
Confirmed as of the date first above mentioned.
S.G.WARBURG & CO. INC.
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
PETRIE PARKMAN & CO., INC.
By: S.G.WARBURG & CO. INC.
By:
----------------------------------------
Authorized Signatory or Attorney-in-Fact
-8-
