1
BELDEN & BLAKE CORPORATION
3,500,000 SHARES OF COMMON STOCK
(no par value)
_______________
UNDERWRITING AGREEMENT
June _____, 1995
Johnson Rice & Company
McDonald & Company Securities, Inc.
Southcoast Capital Corporation
As representatives of the several Underwriters
named in Schedule I hereto
c/o Johnson Rice & Company
639 Loyola Avenue
Suite 2775
New Orleans, Louisiana 70113
Dear Sirs:
Belden & Blake Corporation, an Ohio corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named on Schedule I hereto (the "Underwriters") an
aggregate of 3,500,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 525,000 additional shares (the "Optional Shares") of Common
Stock, no par value ("the Stock"), of the Company (the "Firm Shares" and the
"Optional Shares" being collectively called the "Shares").
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, and may have filed an amendment or
amendments thereto, on Form S-3 (No. 33-____________), for the registration of
the Shares under the Securities Act of 1933, as amended (the "Act"). If such
registration has not become effective, a further amendment to such registration
statement, including therein a final prospectus, necessary to permit such
registration statement to become effective, will be filed promptly by
2
the Company with the Commission. If such registration statement has become
effective, the Company shall file with the Commission in accordance with Rule
424(b) of the General Rules and Regulations of the Commission under the Act
(the "Regulations") a final prospectus containing all Rule 430A Information (as
hereinafter defined) previously omitted at the time such registration statement
was declared effective by the Commission. The Company will not, without your
prior consent, file any other amendment thereto or make any change in the form
of final prospectus prior to the time it is first filed pursuant to Rule 424(b)
of the Regulations. Such registration statement, including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof, as amended, when it shall become effective, is herein called the
"Registration Statement" and shall include information with respect to the
Shares and the offering permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A of the Regulations (the "Rule
430A Information"); and the prospectus, in the form included as part of the
Registration Statement, or, if different, in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations, is herein called the
"Prospectus." The term "preliminary prospectus" as used herein means each
prospectus included in the Registration Statement or any amendments thereto,
before it became effective under the Act and any prospectus filed with the
Commission pursuant to Rule 424(a) of the Regulations. The term "Effective
Date" means the date that the Registration Statement is declared effective by
the Commission. Any reference herein to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3, which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the Effective Date, the date of such
preliminary prospectus or the date of the Prospectus, as the case may be, and
any reference herein to the terms "amend", "amendment", or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, which is incorporated therein by
reference and (ii) any such document so filed.
(b) On the Effective Date, when any post-effective amendment to the
Registration Statement becomes effective, when the Prospectus is first filed
with the Commission pursuant to Rule 424(b) of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, when
any document filed under the Exchange Act is filed with the Commission, and at
all times subsequent thereto and including the Delivery Date (as hereinafter
defined) and during such longer period as the Prospectus may be required to be
delivered in connection with sales by the Underwriters or a dealer, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and did not or will not,
as the case may be, contain an untrue statement of a material fact and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and no event with respect
to the Company or any of its Subsidiaries (as hereinafter defined), will have
occurred that should have been set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not then been set forth in such
an amendment or supplement including, but not limited to, any material loss or
-2-
3
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries (except, in the
case of long term debt, repayments or borrowings in the ordinary course of
business since such dates under the Company's revolving line of credit) or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and its Subsidiaries. When any preliminary prospectus was first filed
with the Commission (whether filed as part of the Registration Statement for
the registration of the Shares or any amendment thereto or pursuant to Rule
424(a) of the Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such preliminary prospectus and
any amendments thereof and supplements thereto complied in all material
respects with the applicable provisions of the Act and the Regulations and
did not contain an untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. The documents incorporated
by reference in the Registration Statement and the Prospectus, when they
were first filed with the Commission, complied in all material respects with
the applicable provisions or the Exchange Act and the rules and regulations
of the Commission thereunder. The term "Subsidiary" as used herein means
the following subsidiaries of the Company: Ward Lake Drilling, Inc., Canton
Oil and Gas Company, Target Oilfield Pipe and Supply Company, Belden & Blake
(U.K.) Inc., Belden & Blake Securities, Inc., Peake Energy, Inc., Belden &
Blake Investments A.G. and Engine Power Systems, Inc. The Company does not
have an ownership interest of 50% or more of any entity other than the
Subsidiaries.
(c) Neither the Commission nor the "blue sky" or securities authority
of any jurisdiction has issued a stop order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of any preliminary
prospectus, the Prospectus, the Registration Statement, or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the Shares, nor,
to the knowledge of the Company, has any of such authorities instituted or
threatened to institute any proceedings with respect to a stop order.
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and is duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction; and each Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, with power and authority to own
its properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any
-3-
4
business, so as to require qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus; and all of
the issued shares of capital stock of each Subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
are owned, directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(f) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(g) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly and validly authorized, and this
Agreement has been duly executed and delivered by the Company and represents
the legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms;
(h) The Company and its Subsidiaries have good and marketable title
to their real properties and their producing oil and gas properties, free and
clear of all liens, encumbrances and defects, except (i) those described in the
Prospectus, (ii) liens securing taxes and other governmental charges, or claims
of materialmen, mechanics and similar persons, not yet due and payable, (iii)
liens and encumbrances under operating agreements, unitization and pooling
agreements, and other similar agreements of a scope and nature customary in the
oil and gas industry that do not materially affect the value of such oil and
gas properties or materially interfere with the use made or proposed to be made
of such properties by the Company and its Subsidiaries and (iv) such other
liens, encumbrances and defects that do not, singly or in the aggregate,
materially affect the value of such properties or materially interfere with the
use made or proposed to be made of such properties by the Company and its
Subsidiaries;
(i) The issue and sale of the Shares by the Company, the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation or Code of Regulations of the
Company or the charter, by-laws or other constitutional documents of any of its
Subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
-4-
5
or governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions contemplated
by this Agreement, except (i) the registration under the Act of the
Shares, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under state "blue sky" or securities laws
in connection with the purchase and distribution of the Shares by the
Underwriters, (iii) such approval of the underwriting arrangements as may be
required under the by-laws of the National Association of Securities Dealers,
Inc. (the "NASD") and (iv) approval by The Nasdaq National Market of the Nasdaq
National Market Notification for Listing Additional Shares with respect to the
Shares;
(j) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any of
its Subsidiaries is the subject that, if determined adversely to the Company or
any of its Subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders' equity or
results of operations of the Company and its Subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(k) Ernst & Young, who have certified certain financial statements of
the Company and its Subsidiaries, and certain financial statements of
businesses and operations acquired by the Company that are set forth in the
Registration Statement and the Prospectus, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(l) The audited and unaudited consolidated financial statements and
schedules of the Company and its Subsidiaries included in the Registration
Statement and the Prospectus, or incorporated by reference therein, present
fairly the consolidated financial position of the Company and its Subsidiaries
as of their respective dates and the consolidated results of their operations,
their cash flows and changes in shareholders' equity for the respective periods
covered thereby; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as set forth in the notes to such
financial statements and except to the extent that certain footnote disclosures
regarding the unaudited financial statements have been omitted in accordance
with the applicable rules of the Commission; the consolidated financial
statements of the Company and its Subsidiaries included in the Registration
Statement and the Prospectus, or incorporated by reference therein, comply in
all material respects to the requirements of the Act and the regulations
thereunder; the historical selected consolidated financial data included in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been derived from the consolidated financial statements in the
Registration Statement and the Prospectus, except as set forth therein;
(m) The pro forma financial information included in the Registration
Statement and the Prospectus has been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered except as set forth in the notes to such statements and
complies in all material respects with the applicable requirements
-5-
6
of the Act and Regulation S-X. The assumptions used in preparing such pro
forma information, whether or not described in notes thereto, provide a
reasonable basis for presenting the significant direct effects of the
transactions reflected therein, and the related pro forma adjustments give
appropriate effect to those assumptions and are properly applied in the pro
forma financial information;
(n) The Company and its Subsidiaries own or have the right to use all
patents, patent applications, trademarks, service marks, trade names, licenses,
sublicenses and rights thereof that are necessary for the conduct of their
respective businesses in the manner in which it is being conducted, except for
those the absence of which would not in the aggregate have a material adverse
effect on the business and operations of the Company and its Subsidiaries taken
as a whole, and no default exists (and no event has occurred that with notice
or lapse of time or both, would constitute a default) in the due performance
and observance of, and no event has occurred that would have a material adverse
effect on the Company's or any such Subsidiary's rights under, any term,
covenant or condition of any license or sublicense to which the Company or any
such Subsidiary is a party;
(o) The Stock is qualified for inclusion in, and is quoted on, the
Nasdaq National Market;
(p) Neither the Company, nor any of its Subsidiaries, nor any of
their affiliates (as defined in the rules and regulations of the Commission
under the Act), does business with the government of Cuba or with any person or
affiliate located in Cuba, and the Company and its Subsidiaries are in
compliance with all laws and regulations of the State of Florida relating to
issuers of securities that are doing business with Cuba;
(q) None of the Company, its Subsidiaries, or any of their officers,
directors or affiliates has taken or will take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any securities of the Company to facilitate the sale or resale
of the Shares; and the Company has not effected any sales of shares of Stock
that would be required to be disclosed in response to Item 701 of Regulation
S-K, except as disclosed in the Registration Statement; and
(r) The Company and its Subsidiaries have filed all federal, state
and foreign income and franchise tax returns required to be filed and have paid
all taxes shown thereon to be due, except for taxes that are being contested in
good faith or with respect to which an extension has been granted, and there is
no tax deficiency that has been or, to the best knowledge of the Company, might
be asserted against the Company, any of its Subsidiaries or any of their
respective properties or assets that would have a material adverse effect on
the condition (financial or other), business, properties, assets or results of
operations of the Company and its Subsidiaries taken as a whole.
(s) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied. Neither the Company nor any
Subsidiary is in breach of any term
-6-
7
or provision of its respective charter documents; no default exists, and no
event has occurred which would, with notice, the lapse of time or both,
constitute a default, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, lease, note,
bank loan or credit agreement or any other instrument to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary or any
of their respective properties or assets may be bound or affected in any
respect that would have a material adverse effect on the condition (financial
or other) business, properties, assets or results of operations of the Company
and its Subsidiaries taken as a whole.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $____________, the number of Firm Shares set
forth opposite the name of such Underwriter on Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in Clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares that such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter on Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 525,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the Time of Delivery (as defined
in Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
3. Upon the authorization by you as representatives of the several
Underwriters of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as Johnson Rice & Company may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf of the Company
to you for the account of such Underwriter, against payment by such Underwriter
or on its behalf of the purchase price therefor by wire transfer of immediately
available funds to an account designated by the Company, net of the cost of
such funds to the Underwriters from the Time of Delivery until the next
business day. Delivery of the
-7-
8
certificates and payment of the purchase price therefor shall be made at the
offices of Johnson Rice & Company, at ______ central time, on
____________________, 1995, or at such other time and date as you and the
Company may agree upon in writing, such time and date being herein called the
"Time of Delivery." Such certificates will be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery at the
offices of Johnson Rice & Company or such other place as may be designated by
you.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus that
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when the
Registration Statement, or any amendment thereto, has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish you with copies thereof; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or any order preventing or suspending the use of any preliminary
prospectus or Prospectus, of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, and of any request by the Commission to
amend or supplement the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any preliminary prospectus or
Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time prior to expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Shares and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time
-8-
9
reasonably request of an amended Prospectus or a supplement to the Prospectus
that will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)), an
earnings statement of the Company and its Subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date that is 180 days after the date hereof, not to offer,
sell, contract to sell or otherwise dispose of any Stock, any securities of the
Company that are substantially similar to the Stock, or any securities
convertible into or exchangeable for Stock or such substantially similar
securities, without your prior written consent, and to cause Henry S. Belden IV
to agree not to offer, sell, contract to sell or otherwise dispose of any
Stock, any securities of the Company substantially similar to the Stock, or any
securities convertible into or exchangeable for Stock or such substantially
similar securities, during such period, without your prior written consent,
other than the Company's sale of shares hereunder, the Company's issuance of
Stock upon the exercise of presently outstanding stock options and except for
the grant of stock options, restricted stock or other stock based awards under
existing employee benefit plans.
(f) To apply the net proceeds from the sale of the Shares as set
forth in the Prospectus and to file such reports with the Commission with
respect to the sale of the Shares and the application of the proceeds therefrom
as may be required by Rule 463 under the Act;
(g) The company will not take, directly or indirectly, any action
that might reasonably be expected to cause or result in (i) stabilization of
the price of the Stock to facilitate the sale or resale of the Stock, or (ii)
manipulation of the price of the Stock.
(h) To take all such actions as may be required to cause the Shares
to be included in the Nasdaq National Market;
(i) During a period of five years following the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission, Nasdaq or any other
national securities exchange on which any class of securities of the Company is
listed and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its Subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission).
-9-
10
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel, accountants and petroleum
engineers in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any preliminary prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers: (ii) the cost of printing or
reproducing any Agreement Among Underwriters, this Agreement, any Selected
Dealers Agreement, the Blue Sky Memorandum and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering
and sale under state securities laws as provided in Section 5(b) hereof,
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) the filing fees incident to securing any required review by the NASD of
the terms of the sale of the Shares; (v) the cost of preparing stock
certificates; (vi) the cost and charges of any transfer agent or registrar; and
(vii) all other costs and expenses incurred by the Company incident to the
performance of its obligations hereunder that are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees and expenses
of their counsel, stock transfer taxes on resale by them of any of the Shares,
and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.,
counsel for the Underwriters, shall have furnished to you such opinion or
opinions, dated the Time of Delivery, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
-10-
11
(c) Black, McCuskey, Souers & Arbaugh, counsel for the Company, shall
have furnished to you their written opinion, dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio, with all
requisite corporate power and authority to own its properties and conduct its
business as described in the Registration Statement and Prospectus. The Company
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as to require
such qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such counsel
being entitled to rely with respect to the opinion in this clause upon opinions
of local counsel and with respect to matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions and
certificates);
(ii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business,
so as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and all of the issued shares of capital stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and non-
assessable, and are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims except as described in Section
1(e) of this Agreement (such counsel being entitled to rely with respect to the
opinion in this clause upon opinions of local or other counsel and with respect
to matters of fact upon certificates of officers of the Company or its
Subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(iii) The Company has an authorized capitalization as set forth in the
Registration Statement and Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and are fully paid
and non-assessable; and the Shares conform to the description of the Stock
contained in the Prospectus;
(iv) The Stock is listed on the Nasdaq National Market;
(v) To the best of such counsel's knowledge and other than as set
forth in the Registration Statement and Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject that, if determined adversely to the Company or any
of its Subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders' equity or
results of operations
-11-
12
of the Company and its Subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company, subject as to the enforcement of remedies to applicable bankruptcy,
insolvency, moratorium and other laws affecting the rights of creditors
generally and except as to rights of indemnification and contribution hereunder
which may be limited by federal securities laws;
(vii) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject, nor will such action result in
any violation of the provisions of the Articles of Incorporation or Code of
Regulations of the Company or the charter, by-laws or other constitutional
documents of any of its Subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of their
properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except (i) the registration under
the Act of the Shares, (ii) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and (iii) such approval of the underwriting arrangements as
may be required under the by-laws of the NASD;
(ix) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby by the Company will
not (A) conflict with or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) or require consent under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to the terms of any
agreement or instrument filed as an exhibit to the Registration Statement or
any material franchise, license or permit known to such counsel to which the
Company or any of its Subsidiaries is a party or by which any of such
corporations or their respective properties or assets may be bound, or (B)
violate or conflict with any provision of the Articles of Incorporation, Code
of Regulations or Bylaws of the Company or any of its Subsidiaries, or, to the
best knowledge of such counsel, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its Subsidiaries or any of
their respective properties or assets. To the best
-12-
13
knowledge of such counsel, no consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental, or regulatory agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, except
for (1) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters
(as to which such counsel need express no opinion), and (2) such as have been
made or obtained under the Act.
(x) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements and
schedules and other financial and statistical data included or incorporated by
reference therein, as to which no opinion need be rendered) comply as to form
in all material respects with the requirements of the Act and the Regulations.
The documents filed under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus and in any amendment thereof or
supplement thereto (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference therein,
as to which no opinion need be rendered) comply as to form in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder.
(xi) The Registration Statement is effective under the Act, and, to
the best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof has been
issued and no proceedings therefor have been initiated or threatened by the
Commission.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus were discussed and, although such
counsel is not passing upon, and does not assume responsibility for and has not
verified, the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, on the basis of the foregoing
(relying as to materiality upon the opinions of officers and other
representatives of the Company) nothing has come to the attention of such
counsel that leads it to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment became
effective contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at all times up
to and including the Delivery Date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and schedules
and other financial and statistical data included or incorporated by reference
in the Registration Statement or the Prospectus or in any amendments thereof or
supplements thereto).
-13-
14
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States and the laws of the State of Ohio.
(d) At the time this Agreement is executed and at the Time of
Delivery, Ernst & Young shall have furnished to you a letter or letters, dated
the respective date of delivery thereof, in form and substance satisfactory to
you, to the effect that;
(i) They are independent certified public accountants with
respect to the Company and its Subsidiaries within the meaning of the Act and
the applicable rules and regulations thereunder;
(ii) In their opinion, the financial statements and schedules
examined by them and included in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder;
(iii) The selected financial information with respect to the
Company included in the Prospectus agrees with the corresponding amounts
(after restatements where applicable, which shall be identified in such letter)
in the audited consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its Subsidiaries, inspection of the
minute books of the Company and its Subsidiaries since December 31, 1991,
inquiries of officials of the Company and its Subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that caused
them to believe that:
(A) any unaudited consolidated interim financial statements
of the Company included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder, or are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with the basis for the audited consolidated financial
statements of the Company included in the Prospectus;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements included
in the Prospectus;
-14-
15
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any unaudited
consolidated interim financial statements referred to in Clause (A)
and any unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma financial information included
in the Prospectus does not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the consolidated
capital stock or any increase in the consolidated long-term debt of the
Company and its Subsidiaries, or any decreases in consolidated net current
assets or net assets or other items specified by the Representatives, or any
increase or decrease in any other item specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet included
in the Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to in
Clause (E) there were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increase or decrease in any
other item specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each case for
decreases or increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the examination referred to in their report
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (v) and (vi)
above, Ernst & Young shall state that they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives, which are derived from
the general accounting records of the Company and its Subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules to,
the Registration Statement specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its Subsidiaries and have found
them to be in agreement.
(e) (i) Neither the Company nor any of its Subsidiaries shall
have sustained, since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not cov-
-15-
16
ered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries (except, in the case
of long-term debt, repayments or borrowings in the ordinary course of business
since such dates under the Company's revolving line of credit) or any change or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its Subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in Clause (i) or (ii), is in your judgment so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus;
(f) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general moratorium
on commercial banking activities in New York declared by either federal or New
York State authorities; or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war if the effect of any such event specified in this
Clause (iii) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Prospectus; and
(g) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of the Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
the Time of Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you expressly for use
therein.
-16-
17
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any preliminary prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred. The Company acknowledges that the statements set forth
under the heading "Underwriting" constitute the only information contained in
the Registration Statement or Prospectus or any related preliminary prospectus
or any amendment therefor or supplement thereto furnished in writing to the
Company by the Underwriters expressly for use in connection with the
preparation thereof.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
-17-
18
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, than each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received
by the Underwriters with respect to the Shares purchased under this Agreement,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the other and
the parties relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to above in this Subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentations. The Underwriters' obligations in this Subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
-18-
19
that the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares that it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on
the terms contained herein. If within thirty-six hours after such default by
any Underwriter you do not arrange for the purchase of such Shares, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Shares, or the Company notifies you that it has so arranged for the
purchase of such Shares, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus that in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in Subsection (a) above, the aggregate number of such Shares that
remains unpurchased does not exceed one- eleventh of the aggregate number of
all the Shares, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares that such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in Subsection (a) above, the aggregate number of such Shares that
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares, or if the Company shall not exercise the right described in Subsection
(b) above to require non- defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made
-19-
20
by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or the Company, or any officer
or director or controlling person of the Company, and shall survive delivery of
and payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company in Subsection (a) of Section 8 hereof, the
representations and warranties in Subsections (b) and (c) of Section 1 hereof
and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 7 hereof, insofar as they may constitute a basis
for indemnification for liabilities (other than payment by the Company of
expenses incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Act, shall not extend to the extent of any
interest therein of a controlling person or partner of an Underwriter who is a
director, officer or controlling person of the Company when the Registration
Statement has become effective, except in each case to the extent that an
interest of such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless in
the opinion of counsel for the Company the matter has been settled by
controlling precedent, the Company will, if a claim for such indemnification is
asserted, submit to a court of appropriate jurisdiction the question whether
such interest is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but, if for any other reason the
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares, but the Company shall then be under
no further liability to any Underwriter except as provided in Section 6 and
Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly as representatives, or by Johnson Rice & Company,
on behalf of you as the representative.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Johnson Rice
& Company, at 639 Loyola Avenue, Suite 2775, New Orleans, Louisiana, 70113,
Attention: F. Del Agnew; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Joseph M. Vitale, Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire,
or telex constituting such Questionnaire, which address will be
-20-
21
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. The Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us six counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement Among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
Belden & Blake Corporation
By: ______________________________
Name:
Title:
-21-
22
Accepted as of the date hereof:
Johnson Rice & Company
McDonald & Company Securities, Inc.
Southcoast Capital Corporation
By: Johnson Rice & Company
By:______________________________________
Name:
Title:
On behalf of each of the Underwriters
-22-
23
SCHEDULE I
Total Number of Shares
Underwriter to be Purchased
- ------------------------------- ----------------------
Johnson Rice & Company . . . . . . . . .
McDonald & Co. Securities, Inc. . . . . .
Southcoast Capital Corporation . . . . .
----------------
Total . . . . . . . . . . . . . . . . 3,500,000
================
-23-