1
[Draft--9/24/97]
September , 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxxxxx & Company, Inc.
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
COHO ENERGY, INC., a Texas corporation (the "Company"),
proposes to issue and sell to several Underwriters named in Schedule I hereto
(the "Underwriters") $125 million principal amount of its % Senior
Subordinated Notes Due 2007 (the "Securities") to be issued pursuant to the
provisions of an Indenture dated as of September , 1997 (the "Indenture")
between the Company and Marine Midland Bank, as Trustee (the "Trustee"). The
Securities will be guaranteed on a senior subordinated basis by Coho Resources,
Inc., a Nevada corporation ("CRI") and certain other wholly owned subsidiaries
of the Company identified on the signature pages of this Agreement
(collectively, with CRI, the "Subsidiary Guarantors").
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Securities. The registration statement as amended at the time
it becomes effective, including the information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933 (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Securities is hereinafter referred to as the
"Prospectus". If the Company has filed an abbreviated registration
2
2
statement to register additional securities pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462 Registration Statement.
1. Representations and Warranties of the Company and the
Subsidiary Guarantors. Each of the Company and the Subsidiary Guarantors
represents and warrants to and agrees with each of the Underwriters that:
(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
threatened by the Commission.
(b) (i) 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, (ii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) 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 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
paragraph 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
3
3
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; 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 by the Company or
a subsidiary of the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors.
4
4
(f) The Indenture has been duly qualified under the Trust
Indenture Act and 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 as (i) enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited
by equitable principles of general applicability and (iii) general
principles of equity may affect such matters.
(g) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may affect such
matters.
(h) The Subsidiary Guarantees have been duly authorized and,
when the Indenture has been duly executed and delivered by the
Subsidiary Guarantors, the Subsidiary Guarantees will be valid and
binding agreements of the respective Subsidiary Guarantors,
enforceable in accordance with their respective terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may affect such
matters.
5
5
(i) The execution and delivery by each of the Company and the
Subsidiary Guarantors of, and the performance by each of the Company
and the Subsidiary Guarantors of their respective obligations under,
this Agreement, the Indenture and the Securities, as the case may be,
will not contravene any provision of applicable law or the articles or
certificate of incorporation or by-laws of the Company or such
Subsidiary Guarantor, as the case may be, or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company and the Subsidiary Guarantors of their respective obligations
under this Agreement, the Indenture or the Securities, as the case may
be, except such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the
Securities.
(j) There has not occurred any material adverse change, or
any development involving a prospective 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, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
6
6
(l) 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 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the rules and regulations of the Commission thereunder.
(m) None of the Company and the Subsidiary Guarantors is and,
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus,
will be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with
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,
7
7
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and the Underwriters, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agree, severally and not jointly, to
purchase from the Company the respective principal amounts of Securities set
forth in Schedule I hereto opposite their names at % of their principal
amount--the purchase price--plus accrued interest, if any, from September ,
1997 to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement has become effective as in your judgment is advisable. The Company
is further advised by you that the Securities are to be offered to the public
initially at % of their principal amount--the public offering price--plus
accrued interest, if any, and to certain dealers selected by you at a price
that represents a concession not in excess of % of their principal amount
under the public offering price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of % of their principal
amount, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be
made in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several
8
8
Underwriters at 10:00 a.m., New York City time, on __________, 1997,(1) or at
such other time on the same or such other date, not later than __________,
1997,(2) as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Payment for the Securities shall be made against delivery to
you on the Closing Date for the respective accounts of the several Underwriters
of the Securities registered in such names and in such denominations as you
shall request in writing not less than one full business day prior to the
Closing Date, with any transfer taxes payable in connection with the transfer
of the Securities to the Underwriters duly paid.
5. Conditions of the Underwriters' Obligations. The
obligations of the Company and the several obligations of the Underwriters to
purchase and pay for the Securities on the Closing Date are subject 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 hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's
---------------
(1) Insert date 3 business days or, in the event the offering is priced after
4:30 p.m. Eastern Time (and T+4 settlement is deemed to apply to secondary
sales), 4 business days after the date of the Underwriting Agreement.
(2) Insert date 5 business days after the date inserted in accordance with
note [6] above.
9
9
securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement), that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) You shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company and
the Subsidiary Guarantors contained in this Agreement are true and
correct 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 on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
Xxxxxxxxx & Xxxxxxxx LLP, counsel for the Company (except for the
opinion described in paragraph (x) below, which opinion shall be
rendered by [ ], special environmental counsel for the
Company), dated the Closing Date, to the effect that:
(i) the Company is a corporation validly existing in
good standing under the laws of the
10
10
State of Texas, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) each subsidiary of the Company that is a
significant subsidiary as defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act, is a corporation
validly existing in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of business or its ownership or leasing
of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by each of the Company and the
Subsidiary Guarantors;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by each of the Company and the Subsidiary Guarantors
and is a valid and binding agreement of each of the Company
and the Subsidiary Guarantors, enforceable in accordance with
its terms except as (i) enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting
11
11
creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable remedies may be
limited by equitable principles of general applicability and
(iii) general principles of equity may affect such matters;
(v) the Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable
principles of general applicability and (iii) general
principles of equity may affect such matters;
(vi) the execution and delivery by each of the
Company and the Subsidiary Guarantors of, and the performance
by the Company and the Subsidiary Guarantors of their
respective obligations under, this Agreement, the Securities
and the Indenture, will not contravene any provision of
applicable law or the articles or the certificate of
incorporation or by-laws of the Company or the relevant
Subsidiary Guarantor or, of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries filed as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31,
1996, or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order
12
12
of, or qualification with, any governmental body or agency is
required for the performance by the Company and the Subsidiary
Guarantors of their respective obligations under this
Agreement, the Securities and the Indenture, except such as
may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Securities;
(vii) the statement (1) in the Prospectus under the
captions "Business and Properties-- Governmental Regulation,"
"Business and Properties--Environmental Regulations,"
"Description of the Notes" and "Underwriters" and (2) in the
Registration Statement under Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents and proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the
matters referred to therein;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required;
(ix) none of the Company and the Subsidiary
Guarantors is and, after giving effect to the offering and
sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will be an "investment
company"
13
13
as such term is defined in the Investment Company Act of 1940,
as amended;
(x) such counsel is of the opinion that the Company
and its subsidiaries (i) are in compliance with any and all
applicable Environmental Laws, (ii) have received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries taken as a whole;
and
(xi) the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder.
In such opinion, such counsel will state that it (i)
has no reason to believe that (except for financial statements
and schedules and other financial and statistical data
included therein as to which such counsel need not express any
belief and except for that part of the Registration Statement
that constitutes the Form T-1 heretofore referred to) the
Registration Statement and the prospectus included therein at
the time the Registration Statement became effective contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) has no
reason to
14
14
believe (except for financial statements and schedules and
other financial and statistical data as to which such counsel
need not express any belief) the Prospectus as of the Closing
Date contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
Xxxxxxx, Swaine & Xxxxx, special counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in subparagraphs
(iii), (iv), (v), (vii) (but only as to the statements in the
Prospectus under "Description of the Notes" and "Underwriters"), (ix)
and (xi) of paragraph (c) above.
With respect to subparagraph (xi) of Section 5(c) above,
Xxxxxxxxx & Xxxxxxxx LLP and Cravath, Swaine & Xxxxx 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. With respect to those opinions in
Section 5(c) related to the laws of the State of Nevada, Fulbright & Xxxxxxxx
LLP may rely upon the opinion of Xxxxxx, Xxxxxx & Xxxxxxx, special counsel to
the Company.
The opinions of Xxxxxxxxx & Xxxxxxxx LLP and [ ]
described in paragraph (c) above shall be rendered to you at the request of the
Company and shall so state therein.
(e) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Xxxxxx Xxxxxxxx LLP, independent public accountants for the Company,
containing statements and information of the type ordinarily included
in accountants' "comfort letters"
15
15
to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) The Equity Offering (as defined in the Prospectus) shall
have been consummated substantially on the terms described in the
Registration Statement.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three copies of the
conformed XXXXX submission copy of the Registration Statement
(including exhibits thereto) and for delivery to each other
Underwriter a conformed XXXXX submission copy of the Registration
Statement (without exhibits thereto) and, to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus
16
16
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is 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, in the opinion of counsel for the Underwriters, it
is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Securities may
have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplement, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1998 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or any of the Subsidiary Guarantors or warrants to purchase
debt securities of the Company or any of the Subsidiary Guarantors
substantially similar to the Securities or the Subsidiary Guarantors
in respect thereof (other than (i) the Securities and (ii) commercial
paper issued in the ordinary course of business), without your prior
written consent.
17
17
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwrites and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all expenses in connection with
the qualification of the Securities for offer and sale under state law
as provided in section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the
offering of the Securities by the National Association of Securities
Dealers, Inc., (v) any fees charged by the rating agencies for the
rating of the Securities, (vi) all costs and expenses incident to
listing the Securities on the Luxembourg Stock Exchange, (vii) the
cost of printing certificates representing the Securities, (viii) the
costs and charges of any trustee, transfer agent, registrar or
depositary, (ix) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including
without limitation, expenses
18
18
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
It is understood, however that except as provided in this Section,
Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) Each of the Company and
the Subsidiary Guarantors agrees, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including any legal or other expenses reasonably incurred by any Underwriter
or any such controlling person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplement if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
19
19
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless each of the Company, and the Subsidiary Guarantors,
their respective directors, their respective officers who sign the Registration
Statement and each person, if any, who controls the Company and the Subsidiary
Guarantors within the meaning of either 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 such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect
20
20
of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of parties
indemnified pursuant to the second preceding paragraph, and by the Company, in
the case of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. 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 and third sentences 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 30 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 prior to 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 an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
21
21
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Subsidiary Guarantors on the one hand
and the Underwriters on the other hand from the offering of the Securities 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 Subsidiary Guarantors on the one hand and of the
Underwriters on the other hand in connection with the statement or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Subsidiary Guarantors on the one hand and the Underwriters on
the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Securities. The
relative fault of the Company and the Subsidiary Guarantors on the one hand and
of 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 Subsidiary Guarantors or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Securities
they have purchased hereunder, and not joint.
22
22
The Company, the Subsidiary Guarantors and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 7 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 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities 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 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 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
23
23
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the event specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Registration Statement by the Commission.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportion that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
principal amount of Securities set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as
24
24
you may specify, to purchase the Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Underwriter
has agreed to purchase pursuant to Section 2 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any nondefaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the
Closing Date but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
25
25
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
COHO ENERGY, INC.
By
------------------------------
COHO RESOURCES, INC.
By
------------------------------
COHO LOUISIANA PRODUCTION COMPANY
By
------------------------------
COHO LOUISIANA GATHERING COMPANY
By
------------------------------
COHO FAIRBANKS GATHERING COMPANY
By
------------------------------
COHO EXPLORATION, INC.
By
------------------------------
26
26
INTERSTATE NATURAL GAS COMPANY
By
-------------------------------
Accepted, September , 1997
XXXXXX XXXXXXX & CO.
INCORPORATED
Xxxxxxxxx & Company, Inc.
Acting severally on behalf
of themselves and the
several Underwriters
named herein.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By
-------------------------------
27
27
Schedule I
Underwriter Principal Amount of
----------- Securities
-------------------
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxxxxx & Company, Inc.
------------
$125,000,000
============
