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EXHIBIT 1.1
3,824,313 SHARES
PRIZE ENERGY CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
September __, 2000
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXX XXXXXXX & CO., INC.
As Representatives of the several
Underwriters named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders of Prize Energy Corp., a Delaware corporation (the
"Company"), named in Schedule 2 hereto, propose to sell an aggregate of
3,824,313 shares (the "Firm Stock") of the Company's common stock, par value
$.01 per share (the "Common Stock"). In addition, the Company and certain other
stockholders of the Company named in Schedule 2 hereto (together with the
stockholders selling the Firm Shares, the "Selling Stockholders") propose to
grant to the underwriters named in Schedule 1 hereto (the "Underwriters"), an
option to purchase up to an additional 573,647 shares of the Common Stock, in
the aggregate, on the terms and for the purposes set forth in Section 3 below
(the "Option Stock"). All of the 3,824,313 shares of the Firm Stock are being
sold by the Selling Stockholders. The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "Stock." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 and amendments
thereto with respect to the Stock have (i) been prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and amendments thereto have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
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Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereto, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations. The
Commission has not issued any order preventing or suspending the use of
any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in
Section 17 below) have been duly incorporated or organized, as
applicable, and are validly existing as corporations or limited
partnerships in good standing under the laws of the State of Delaware,
are duly qualified to do business and are in good standing as foreign
corporations or partnerships in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all
corporate or partnership power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they
are engaged; and none of the subsidiaries of the Company, other than
Prize Energy Resources, L.P., Prize Operating Company and PEC
(Delaware), Inc., is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations.
(d) 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 (i) have been duly and validly
authorized and issued and are fully
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paid and non-assessable, and (ii) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims, except for the pledge of such shares and partnership interests
pursuant to the Amended and Restated Credit Agreement, dated February
8, 2000, among Prize Energy Resources, L.P., Vista Resources Partners,
L.P. and Midland Resources, Inc. as borrowers, the Company, as
guarantor, Banc Boston, N.A., as administrative agent, First Union
National Bank, as syndication agent, CIBC Inc., as documentation agent,
and Bank One, Texas, as lead manager, as amended (the "Credit
Agreement").
(e) The shares of the Stock 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, fully paid and
non-assessable; and such Stock will conform to the descriptions thereof
contained in the Prospectus; the shares of Stock to be sold by the
Selling Stockholders to the Underwriters hereunder have been duly and
validly authorized and are validly issued, fully paid and
non-assessable, or, with respect to shares that may be issued to the
Selling Stockholders pursuant to the exercise of options after the date
hereof and prior to the sale and transfer of such shares of Stock to
the Underwriters, will be, when issued, delivered and paid for in
accordance with the terms of the option agreements covering such
shares, validly issued, fully paid and non-assessable.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any 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 material property or assets of the Company or
any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or
assets; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby and thereby.
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(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have
been waived or satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans, stock option
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations, business or prospects of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules), other than the pro forma financial statements,
filed as part of the Registration Statement or included in the
Prospectus present fairly the financial condition and results of
operations of the entities purported to be shown thereby, at the dates
and for the periods indicated, subject, in the case of any interim
financial statements, to year-end audit and subsequent adjustment, and
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The pro forma financial statements of the Company and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments made therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company and who have delivered [one of] the initial
letter[s] referred to in Section 9(g) hereof, and Xxxxx Xxxxxxxx LLP
and Xxxxxx Xxxxxxxx LLP, whose reports appear in the
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Prospectus [and who have each delivered one of the initial letters
referred to in Section 9(g) hereof], are each independent public
accountants as required by the Securities Act and the Rules and
Regulations, and were independent accountants as required by the
Securities Act and the Rules and Regulations during the periods covered
by the financial statements on which they reported.
(m) Netherland, Xxxxxx & Associates, Inc. and Xxxxxxxxxx
Petroleum Consultants, Inc., whose reserve audits or evaluations are
referenced or appear, as the case may be, in the Prospectus and who
have delivered the letters referred to in Section 9(i) hereof, were, as
of the dates of such audit or report, as the case may be, and are, as
of the date hereof, independent engineers with respect to the Company
and Vista Energy Resources, Inc. ("Vista"), respectively.
(n) Each of the Company and its subsidiaries has (1) generally
satisfactory or good and indefeasible title to all its interests in its
oil and gas properties, title investigations having been carried out by
or on behalf of such person in accordance with good practice in the oil
and gas industry in the areas in which such properties are located, (2)
good and marketable title in fee simple to all of its other real
property, and (3) good and marketable title to all personal property
owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; and all real property and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions as
are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its
subsidiaries.
(o) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(p) The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of
their respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of
others.
(q) Except as described 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 or assets of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would be
reasonably
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expected to have a material adverse effect on the general affairs,
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect"); and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(r) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(t) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which might be
reasonably expected to have a Material Adverse Effect.
(u) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect to incur
any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section
412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code");
and each "pension plan" for which the Company would have any material
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and, to the best of the
Company's knowledge, nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(v) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof,
or has requested extensions thereof, and has paid all taxes due
thereon, except those taxes that are currently being contested in good
faith and for which adequate reserves have been made, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, would have) a Material Adverse Effect.
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(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, other than pursuant to employee benefit plans, stock
option plans or other employee compensation plans described in the
Prospectus or pursuant to outstanding options, rights or warrants
described in the Prospectus, (ii) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(x) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject or (iii) is in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or
has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership
of its property or to the conduct of its business, except in the case
of (ii) and (iii) above for such defaults or violations that, singly or
in the aggregate, would not result in a Material Adverse Effect.
(z) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge,
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except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes,"
"toxic wastes," "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection
("Environmental Laws").
(aa) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(bb) Except as described in the Prospectus, there are no
transactions with any "affiliate" or "associate" (as such terms are
defined in Rule 405 promulgated under the Act) or any officer, director
or security holder of the Company (whether or not constituting such an
affiliate or associate) which are required by the Securities Act and
the applicable Rules and Regulations thereunder to be disclosed in the
Registration Statement or the Prospectus.
(cc) To the Company's knowledge after reasonable inquiry, no
officer, director, nominee for director or more than 5% stockholder of
the Company has any direct or indirect affiliation or association with
any member of the National Association of Securities Dealers, Inc. (the
"NASD").
(dd) There are no transfer taxes or other similar fees or
charges under federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Stock.
(ee) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in the Prospectus.
(ff) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
for the ownership of material property or assets or to conduct their
respective businesses, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as
described in the Prospectus
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(exclusive of any supplement thereto); each of the Company and each of
its subsidiaries has operated and is operating its business in
compliance with and not in violation of any of its obligations with
respect to each such permit and no event has occurred which allows, or
after notice or lapse of time or both would allow, revocation or
termination of any such permit or result in any other impairment of the
rights of the Company or any of its subsidiaries under any such permit,
subject in each case to such qualification as described in the
Prospectus; and, except as described in the Prospectus, such permits
contain no restrictions that are burdensome to the Company or any of
its subsidiaries except for restrictions that would not, singly or in
the aggregate, have a Material Adverse Effect.
(gg) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
could not, singly or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally, and not jointly, represents,
warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have (or, in the case of Selling Stockholders who may
sell shares only on the Second Delivery Date and who will exercise
options to acquire shares of Common Stock to sell as Option Stock, the
Selling Stockholder has good title to currently exercisable options,
and immediately prior to the Second Delivery Date will have) good and
valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens,
encumbrances (other than obligations under a Voting and Shareholders
Agreement dated February 8, 2000, as amended, between the Company,
Prize Natural Resources, Inc., and certain stockholders, named therein,
including certain Selling Stockholders, as of the date hereof, which
obligations will terminate and/or be of no effect with respect to the
Stock delivered to the Underwriters), equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto and
thereto, good and valid title to such shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several
Underwriters.
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(b) The Selling Stockholder has full right, power (corporate
or partnership power with respect to corporations or partnerships that
are Selling Stockholders) and authority to enter into this Agreement;
the execution, delivery and performance of this Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby 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 Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Selling Stockholder, or the
certificate of limited partnership and the partnership agreement of the
Selling Stockholder, as applicable, or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of
the Selling Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations, filings or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby.
(c) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, with respect to Pioneer and the NGP
Entities (as defined below), only, the foregoing representations and
warranties shall only apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to such Selling Stockholder
furnished to the Company in writing by such Selling Stockholder
expressly for use therein and provided, further, that no representation
or warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(d) Each of Messrs. Xxxxxx X. Xxxxx, Xxx X. Xxxx and D.
Xxxxxxx Xxxxxxxxxx, who are executive officers of the Company (each, an
"Executive Selling Stockholder"), agrees, severally and not jointly,
that (1) the representations and warranties of the Company contained in
Section 1 hereof are true and correct, (2) is familiar with the
Registration
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Statement and the Prospectus (as amended or supplemented) and has no
knowledge of any material fact, condition or information not disclosed
in the Registration Statement, as of the Effective Date, or the
Prospectus (or any amendment or supplement thereto), as of the
applicable filing date, which has adversely affected or may adversely
affect the business of the Company, and (4) is not prompted to sell
shares of Common Stock by any information concerning the Company which
is not set forth in the Registration Statement and the Prospectus.
(e) Pioneer Natural Resources USA, Inc. ("Pioneer") agrees
that (1) Pioneer is familiar with the Registration Statement and the
Prospectus (as amended or supplemented), (2) the executive officers of
Pioneer without further investigation have no current actual knowledge
of any material fact, condition or information not disclosed in the
Registration Statement, as of the Effective Date, or the Prospectus (or
any amendment or supplement thereto), as of the applicable filing date,
which has adversely affected or may adversely affect the business of
the Company, and (3) is not prompted to sell shares of Common Stock by
any information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
(f) Natural Gas Partners II, L.P. and Natural Gas Partners
III, L.P. (collectively, the "NGP Entities") each agree that (1) it is
familiar with the Registration Statement and the Prospectus (as amended
or supplemented), (2) to the actual knowledge of the general partners,
ultimate general partners of the NGP Entities and their managing
members, it has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement, as of the
Effective Date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely
affected or may adversely affect the business of the Company, and (3)
is not prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration
Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Stock set opposite its name in Schedule 2
hereto, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from each Selling Stockholder
that number of shares of the Common Stock which represents the same proportion
of the number of shares of the Firm Stock to be sold by each Selling
Stockholder, as the number of shares of the Firm Stock set forth opposite the
name of such
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Underwriter in Schedule 1 represents of the total number of shares of the Firm
Stock to be purchased by all of the Underwriters pursuant to this Agreement. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company and the applicable Selling Stockholders
specified in Schedule 2 hereto grant to the Underwriters options to purchase up
to an aggregate of 573,647 shares of Option Stock. Such options are granted
severally for the purpose of covering over-allotments in the sale of Firm Stock
and are exercisable as provided in Section 5 hereof; provided, the Company shall
be jointly liable and required to perform the options granted by such Selling
Stockholders in the event such Selling Stockholders are unable to deliver their
shares of Option Stock and perform their obligations on the Second Delivery Date
(as defined in Section 5 hereof). Shares of Option Stock shall be purchased
severally for the account of each Underwriter in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriter in Schedule 1
hereto. The price of both the Firm Stock and any Option Stock shall be $ ___ per
share.
The Selling Stockholders and the Company shall not be obligated to
deliver any of the Stock to be delivered on the First Delivery Date or the
Second Delivery Date, as the case may be, except upon payment for all the Stock
to be purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters. Upon authorization by the
Underwriters of the release of the Firm Stock, the several Underwriters propose
to offer the Firm Stock for sale upon the terms and conditions set forth in the
Prospectus. Each Underwriter agrees that it will not offer or sell any of the
Stock outside of the United States or Canada. Each of the Underwriters agrees
that it will not distribute the Stock in such a manner as to require the filing
of a prospectus or similar document (excluding a private placement offering
memorandum) with respect to the Stock under the laws of any Province or
Territory in Canada.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Xxxxxxx & Xxxxx L.L.P., 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, at 9:00 A.M., Dallas, Texas time, on
the fourth full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
herein as the "First Delivery Date." On the First Delivery Date, the applicable
Selling Stockholders shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the applicable Selling
Stockholders of the purchase price by wire transfer in immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in
such names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the applicable Selling Stockholders shall, or shall cause a
custodian to, make the certificates representing the Firm Stock available for
inspection by
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the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the options granted in Section 3 above may be exercised by written
notice being given to the Company and the applicable Selling Stockholders by the
Representatives. Exercise of these options shall be exercised pro rata among the
Company and the applicable Selling Stockholders set forth in Schedule 2 hereto
as determined by the Representatives. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the options are being exercised,
the names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the options shall have been exercised nor later than the
fifth business day after the date on which the options shall have been
exercised. The date and time the shares of Option Stock are delivered are
sometimes referred to as the "Second Delivery Date" and the First Delivery Date
and the Second Delivery Date are sometimes each referred to as a "Delivery
Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 9:00 A.M., Dallas, Texas time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Selling
Stockholders and the Company, as applicable, of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Option Stock shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the applicable Selling Stockholders and the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file the Prospectus pursuant to Rule 424(b)
under the Securities 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 Securities Act; to make no
further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment
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to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise
the Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or 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 the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Representatives a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings) and, (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
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(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have at least 410 days after the end
of the Company's current fiscal quarter), to make generally available
to the Company's security holders and to deliver to the Representatives
an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Securities Act and
the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by
the Company to its stockholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; 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;
(i) For a period of indirectly, offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock employee benefit plans, stock option plans or other
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of Common Stock
or securities convertible into or exchangeable for Common Stock the
grant of options pursuant to option plans existing on the date hereof);
(2) not to, directly or indirectly, enter into any swap or other
derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc. on behalf of the Underwriters;
and (3) unless Xxxxxx Brothers Inc. on behalf of the Underwriters gives
its prior written consent, not to
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permit sales that may be restricted under registration rights
agreements between the Company and stockholders in which stockholders
have agreed not to sell shares if requested by underwriters in an
offering; and to cause Natural Gas Partners V, L.P. and each executive
officer and director of the Company to furnish to the Representatives,
prior to the First Delivery Date, a letter or letters, substantially in
the form of Exhibit A hereto, pursuant to which each such person shall
agree not to, directly or indirectly, (1) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 90 days from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc.
on behalf of the Underwriters;
(j) Prior to the Effective Date, to apply, to the extent
necessary, for the listing of the Stock on the American Stock Exchange
and to use its best efforts to complete that listing, subject only to
official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Option
Stock being sold by the Company as set forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder;
and
(m) To not directly or indirectly take any action designed to
or which has constituted or which might reasonably be expected to cause
or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Stock.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees:
(a) For a period of 90 days from the date of the Prospectus,
not to, directly or indirectly (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
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economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, without the prior written consent of Xxxxxx Brothers Inc. on
behalf of the Underwriters;
(b) That the Stock to be sold by the Selling Stockholder
hereunder is subject to the interest of the Underwriters and the other
Selling Stockholders hereunder and that the obligations of the Selling
Stockholder hereunder shall not be terminated by any act of the Selling
Stockholder, by operation of law, by the death or incapacity of any
individual Selling Stockholder or any other event (other than the
termination of this Agreement); and
(c) To deliver to the Representatives on or prior to the First
Delivery Date or the Second Delivery Date, as the case may be, a
properly completed and executed United States Treasury Department Form
W-9.
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the filing fees incident to securing any required
review by the NASD of the terms of sale of the Stock; (f) any applicable listing
or other fees; (g) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 6(h) above
and of preparing, printing and distributing a blue sky memorandum (including
related fees and expenses of counsel to the Underwriters); (h) all other costs
and expenses incident to the performance of the obligations of the Company and
the Selling Stockholders under this Agreement; provided that, except as provided
in this Section 8 and in Section 13 below the Underwriters shall pay their own
costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters, and, as between the
Underwriters and the Selling Stockholders only, each of the Selling Stockholders
shall pay the fees and expenses of his or its counsel, any custodian (and any
other attorney-in-fact), and any transfer taxes payable in connection with his
or its respective sales of Stock to the Underwriters; and provided further, that
the provisions of this Section 8 shall not affect any agreement that the Company
and any Selling Stockholder may have entered into, or may hereafter enter into,
with respect to the sharing or reimbursement of any of the foregoing costs and
expenses.
9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the
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performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a) above; 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 any request of
the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Xxxxxxx
& Xxxxx L.L.P., counsel for the Underwriters, is material or omits to
state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Stock,
the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company and the Selling
Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) Xxxxxx & Xxxxxxx, A Professional Corporation, shall have
furnished to the Representatives on behalf of the Underwriters its
written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries (x) have
been duly incorporated or organized, as the case may be, in
the State of Delaware and are validly existing as corporations
or limited partnerships in good standing under the laws of the
State of Delaware, (y) other than PEC (Delaware), Inc., are
duly qualified to do business and are in good standing as
foreign corporations or limited partnerships in the States of
Oklahoma and Texas, and (z) have all corporate or partnership
power and authority necessary to own or hold their respective
properties and conduct the businesses in which they are
engaged;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and
nonassessable and conform to the
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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 and
are fully paid, non-assessable and, to such counsel's
knowledge, are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims,
except for the pledge of such shares and partnership interests
pursuant to the Credit Agreement; and, except as described in
the Prospectus, to such counsel's knowledge no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert, exercise or
exchange any obligations into or for any securities or
ownership interests in the Company are outstanding;
(iii) Except as described in the Prospectus, there
are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of,
any shares of the Common Stock (including the Stock) pursuant
to the Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(iv) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any
of its subsidiaries, would have a material adverse effect on
the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company
and its subsidiaries, taken as a whole; and, to such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(v) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in
such opinion (based solely upon a telephonic confirmation from
a representative of the Commission), the Prospectus was filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and no stop order suspending the effectiveness of the
Registration Statement has been issued (based solely upon a
telephonic confirmation from a representative of the
Commission) and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the
Commission;
(vi) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the
Company prior to such Delivery Date (other than the financial
statements and related schedules and other financial data and
statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the
Securities Act and the Rules and Regulations;
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(vii) The statements contained in the Prospectus
under the headings "Description of Capital Stock" and "Shares
Eligible for Future Sale," insofar as such statements refer to
statements of law, descriptions of statutes, rules or
regulations or legal conclusions, are accurate and fair
summaries of such statements of law, descriptions of statutes,
rules or regulations or legal conclusions;
(viii) To such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statement or incorporated therein
by reference as permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized,
executed and delivered by the Company;
(x) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions
contemplated hereby 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 material property
or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties or assets; and,
except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby and
thereby;
(xi) To such counsel's knowledge, except as described
in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right (other than rights which have been
waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities
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registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act;
(xii) The Company is in compliance in all material
respects with all presently applicable provisions of ERISA; no
"reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which
the Company would have any material liability; the Company has
not incurred and does not expect to incur any material
liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Section 412 or 4971 of the Code; and each "pension plan" for
which the Company would have any material liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and, to such counsel's
knowledge, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification; and
(xiii) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act
of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Oklahoma and the General Corporation
Law of the State of Delaware and that such counsel is not admitted in
Delaware.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance reasonably satisfactory to the Representatives,
to the effect that (x) such counsel has acted as counsel to the Company
in connection with the preparation of the Registration Statement and
(y) based on the foregoing, no facts have come to the attention of such
counsel which lead them to believe that the Registration Statement
(except for the financial statements and related schedules and other
financial data, and reserve information included therein, as to which
such counsel need express no belief) as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus
(except as stated above) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus, except for the statements made in the Prospectus under the
caption "Description of Capital Stock" insofar as such statements
relate to the Stock and concern legal matters.
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(e) Counsel for each Selling Stockholder shall have furnished
to the Representatives on behalf of the Underwriters its written
opinion, as counsel to the Selling Stockholder(s) for whom it is acting
as counsel, addressed to the Underwriters and dated the First Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that (or, with respect to counsel for
Selling Stockholders who may only sell Stock on the Second Delivery
Date, only to the extent applicable as of the First Delivery Date):
(i) The Selling Stockholder has full (or in the case
of a corporation or partnership, corporate or partnership, as
applicable) right, power and authority to enter into this
Agreement; to the knowledge of such counsel after reasonable
inquiry, the execution, delivery and performance of this
Agreement by the Selling Stockholder and the consummation by
the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the material
property or assets of the Selling Stockholder is subject, nor
will such actions result in any violation of the provisions of
the charter or by-laws of the Selling Stockholder, or the
certificate of limited partnership or partnership agreement of
such Selling Stockholder (as the case may be), or any statute
or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over
the Selling Stockholder or the property or assets of the
Selling Stockholder; and, except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations, filings or qualifications as
may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Selling Stockholder and the offer, sale or
delivery of the Stock by the Selling Stockholder to the
Underwriters;
(ii) This Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Stockholder;
(iii) Upon payment for and delivery of the Stock as
herein contemplated, each of the Underwriters shall acquire a
security entitlement (as that term is defined in the Uniform
Commercial Code in effect in the State of New York (the
"NYUCC")), with respect to the Stock free and clear of any
adverse claim (as that term is defined under the NYUCC),
provided that each of the Underwriters does not have notice of
any adverse claim (within the meaning of Section 8-105 of the
NYUCC).
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In rendering such opinion, such counsel may (1) state that its opinion
is limited to matters governed by the Federal laws of the United States
of America, the laws of Texas, the laws of the State of New York (to
the extent such counsel is licensed to practice in such state) and the
General Corporation Law of Delaware and that such counsel is not
admitted in Delaware and (2) in rendering the opinion in Section
9(e)(i) above relating to no conflicts with any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument, rely on a certificate of the Selling Stockholder specifying
the scope of documents potentially applicable and available for review
by counsel (including, for example, a limitation to documents filed or
required to be filed under the Exchange Act), provided that such
counsel shall furnish copies thereof to the Underwriters and state that
such counsel is not aware of any facts that cause it to believe that
both the Underwriters and such counsel are not justified in relying
upon such certificate. Such counsel shall also have furnished to the
Underwriters a written statement, addressed to the Underwriters and
dated the First Delivery Date, in form and substance satisfactory to
the Underwriters, to the effect that (x) such counsel has acted as
counsel to the Selling Stockholder, if applicable, on a regular basis,
and has acted as counsel to the Selling Stockholder in connection with
the preparation of the Registration Statement, and (y) based on the
foregoing, no facts have come to the attention of such counsel which
lead it to believe that the Registration Statement, as of the Effective
Date, contained any untrue statement of a material fact relating to the
information provided by Selling Stockholder contained in Section 10(g)
or omitted to state such a material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(f) The Representatives shall have received from Xxxxxxx &
Xxxxx L.L.P., counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Underwriters shall have received a letter from [each of] Ernst & Young
LLP, [Xxxxx Xxxxxxxx LLP and Xxxxxx Xxxxxxxx LLP,] in form and
substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
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information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) With respect to the letter of Ernst & Young LLP[, Xxxxx
Xxxxxxxx LLP and Xxxxxx Xxxxxxxx LLP] referred to in the preceding
paragraph and delivered to the Representatives, on behalf of the
Underwriters, concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such
accountant[s], addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as
of the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of
a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letter
and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
letter from each of Netherland, Xxxxxx & Associates, Inc. and
Xxxxxxxxxx Petroleum Consultants, Inc. addressed to the Underwriters
and dated such Delivery Date confirming that they are or were
independent engineers with respect to the Company and Vista,
respectively, and stating, as of the date of such letter, the
conclusions and findings of such firm with respect to the information
and other matters covered by their letter delivered to the
Representatives concurrently with the execution of this Agreement and
confirming in all material respects the conclusions and findings set
forth in such prior letter.
(j) The Company shall have furnished to the Representatives,
addressed to the Underwriters, a certificate, dated such Delivery Date,
of its Chairman of the Board, its President or a Vice President and its
chief financial officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 hereof are true and correct as of
such Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 9(a) and 9(l) hereof have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
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(k) Each Selling Stockholder (or any custodian or one or more
attorneys-in-fact on behalf of each Selling Stockholder) shall have
furnished to the Representatives on the First Delivery Date a
certificate, dated the First Delivery Date, signed by, or on behalf of,
the Selling Stockholder (or any custodian or one or more
attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and
correct in all material respects as of the First Delivery Date and that
the Selling Stockholder has complied with all agreements contained
herein to be performed by the Selling Stockholder at or prior to the
First Delivery Date.
(l) (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
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity, prospects or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(n) To the extent required, the American Stock Exchange shall
have approved the Stock for listing, subject only to official notice of
issuance.
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All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically); (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials any material fact required to be stated
therein or necessary to make the statements therein not misleading; or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action 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, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein which
consists solely of information set forth in Section 10(f) hereof; and provided
further, however that the Company shall not be liable to any Underwriter in any
such case with respect to any untrue statement or alleged untrue statement or
omission or alleged omission of a material fact in the Preliminary Prospectus to
the extent that the loss, claim, damage or liability of such Underwriter (or the
action in respect thereof) arises out of a sale by such Underwriter of Stock to
a person who was
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not sent or given, at or prior to the closing of such sale to such person, a
copy of the Prospectus as then amended or supplemented, if the Company had
previously furnished (or made available) copies thereof to such Underwriter and
the statement or omission in question contained in the Preliminary Prospectus
was corrected therein. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) (i) The Executive Selling Stockholders, severally and not jointly,
shall indemnify and hold harmless each Underwriter, its officers and employees,
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (1) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto (including, but not limited to, any information
relating to the Executive Selling Stockholder under the caption "Principal and
Selling Stockholders" contained in the Registration Statement and Prospectus (or
any amendment or supplement thereto)), or (2) the omission or alleged omission
to state in any Preliminary Prospectus, Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter, its officers and employees and
each such controlling person for any legal or other expenses reasonably incurred
by that Underwriter, its officers and employees or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Executive Selling Stockholders shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any such amendment or
supplement in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein which
consists solely of the information specified in Section 10(f) hereof. The
foregoing indemnity agreement is in addition to any liability which the
Executive Selling Stockholders may otherwise have to any Underwriter or any
officer, employee or controlling person of that Underwriter. Notwithstanding the
other provisions of this Section 10, the liability of each of the Executive
Selling Stockholders shall be limited to the total proceeds received by such
Selling Stockholder from the offering of the Stock by such Selling Stockholder
(after deducting commissions, but before taxes and any other expenses).
(ii) The NGP Entities and Pioneer, severally and not jointly,
shall indemnify and hold harmless each Underwriter, its officers and employees,
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss,
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claim, damage, liability or action relating to purchases and sales of Stock), to
which that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (1) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement and Prospectus (or any amendment or supplement thereto)
in reliance upon and relating solely to the Selling Stockholder Information
specified in Section 10(g) hereof, or (2) the omission or alleged omission to
state in any Preliminary Prospectus, Registration Statement or the Prospectus,
or in any amendment or supplement thereto, any material fact relating to the
Selling Stockholder Information specified in Section 10(g), required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse each Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably incurred by that
Underwriter, its officers and employees or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the NGP Entities and Pioneer shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or in any such amendment or supplement in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which consists solely of the information
specified in Section 10(f) hereof. The foregoing indemnity agreement is in
addition to any liability which the NGP Entities or Pioneer may otherwise have
to any Underwriter or any officer, employee or controlling person of that
Underwriter. Notwithstanding the other provisions of this Section 10, the
liability of the NGP Entities and Pioneer shall be limited to the total proceeds
received by such Selling Stockholder from the offering of the Stock by such
Selling Stockholder (after deducting commissions, but before taxes and any other
expenses).
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, and each Selling Stockholder and its officers and employees,
each of its directors, and each person if any, who controls the Selling
Stockholder within the meaning of the Securities Act from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Marketing
Materials any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or on
behalf of that
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Underwriter specifically for inclusion therein, and shall reimburse the Company,
such Selling Stockholder and any such director, officer or controlling person of
the Company or the Selling Stockholder for any legal or other expenses
reasonably incurred by the Company, such Selling Stockholder or any such
director, officer or controlling person of the Company or the Selling
Stockholder in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company, such Selling
Stockholder or any such director, officer, employee or controlling person of the
Company or the Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure; and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Underwriters shall have the right to employ counsel to represent jointly the
Underwriters and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Stockholder under this Section 10 if, in the
reasonable judgment of the Underwriters, it is advisable for the Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company or Selling Stockholders. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
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indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock 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 whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, the Selling Stockholders and the Underwriters
shall be obligated to contribute under this Section 10(e) only with respect to
losses, liabilities, claims, damages or expenses arising out of an untrue
statement or omission or alleged untrue statement or omission of a material fact
made in reliance upon and in conformity with the information contained in
Section 10(g) or Section 10(f), respectively, hereunder. The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10(e) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 10(e), 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 10(e), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Stock underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any
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untrue or alleged untrue statement or omission or alleged omission and (ii) no
Selling Stockholder shall be required to contribute any amount in excess of the
total proceeds received by such Selling Stockholder from the offering of the
Stock by such Selling Stockholder (after deducting commissions, but before taxes
and any other expenses). No person guilty of fraudulent misrepresentation
(within the meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of, and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
(g) Pioneer and the NGP Entities each confirm, and the Company
acknowledges, that each such Selling Stockholder's name, address, beneficial
ownership of shares owned by such Selling Stockholder and the number of shares
of Stock being sold by such Selling Stockholder under the caption "Principal and
Selling Stockholders" in the Prospectus constitute the only information
concerning each such Selling Stockholder specifically provided by such Selling
Stockholder for inclusion in the Registration Statement and the Prospectus. Such
information is referred to herein as the "Selling Stockholder Information."
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3 hereof. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Underwriters who so agree, shall have the right, but shall
not be obligated, to purchase, in such proportion as may be agreed upon among
them, all the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other
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underwriters satisfactory to the Underwriters do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company and the applicable Selling Stockholders to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholders, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 13
hereof. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 11, purchases Firm
Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(l) or 9(m)
hereof, shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or any Selling Stockholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders who failed to fulfill
their obligations hereunder will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Selling Stockholders
who failed to fulfill their obligations hereunder shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 12 hereof by reason of the default of one or more Underwriters, neither
the Company nor the Selling Stockholders shall be obligated to reimburse any
Underwriter on account of those expenses. Only a Selling Stockholder who failed,
refused or was unable to perform the agreements on its part to be performed or
to fulfill a condition it was required to fulfill hereunder shall be liable
under this Section 13.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
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(a) if to the Underwriters, shall be delivered or sent by
mail, telex, facsimile transmission or recognized overnight delivery
service to Xxxxxx Brothers Inc., Three World Financial Center, New
York, New York 10285, Attention: Syndicate Department (Fax:
000-000-0000), with a copy, in the case of any notice pursuant to
Section 10(d) hereof, to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail,
telex, facsimile transmission or recognized overnight delivery service
to the address of the Company set forth in the Registration Statement,
Attention: Xxx Xxxx (Fax: (000) 000-0000); and
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex, facsimile transmission or recognized overnight delivery
service to such Selling Stockholder at the address set forth on
Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
above shall be delivered or sent by mail, telex, facsimile transmission or
recognized overnight delivery service to such Underwriter at its address set
forth in its acceptance telex to the Underwriters, which address will be
supplied to any other party hereto by the Underwriters upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company and the Selling Stockholders shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by Xxxxxx Brothers Inc., and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by a custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, directors or general partners of the Selling
Stockholders, as the case may be, officers of the Company who have signed the
Registration Statement and any person controlling the Company or a Selling
Stockholder within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and
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payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the
American Stock Exchange is open for trading and (b) "subsidiary" has the meaning
set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholders and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
PRIZE ENERGY CORP.
By:
-------------------------------------------
Name: Xxx X. Xxxx
-----------------------------------------
Title: President
----------------------------------------
The Selling Stockholders named in Schedule 2 to
this Agreement:
NATURAL GAS PARTNERS II, L.P.
By: G.F.W. Energy II, L.P., general partner
By: GFW II, L.L.C., general partner
By:
-------------------------------------------
Name:
Title:
NATURAL GAS PARTNERS III, L.P.
By: Rainwater Energy Investors, L.P., general
partner
By: GFW II, L.L.C., general partner
By:
-------------------------------------------
Name:
Title:
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PIONEER NATURAL RESOURCES USA, INC.
By:
--------------------------------
Name:
Title:
XXXXXX X. XXXXX
------------------------------------
XXX X. XXXX
------------------------------------
D. XXXXXXX XXXXXXXXXX
Accepted:
XXXXXX BROTHERS INC. ------------------------------------
CIBC WORLD MARKETS CORP.
XXXXXX XXXXXXX & CO., INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By
------------------------------------
Authorized Representative
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SCHEDULE 1
NUMBER OF SHARES OF OPTION
STOCK TO BE PURCHASED
NUMBER OF SHARES OF FIRM (IF OVER-ALLOTMENT OPTION
NAME OF UNDERWRITER STOCK TO BE PURCHASED EXERCISED IN FULL)
------------------- ------------------------ --------------------------
Xxxxxx Brothers Inc. ..................
CIBC World Markets Corp................
Xxxxxx Xxxxxxx & Co., Inc. ............
Total 3,824,313 573,647
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SCHEDULE 2
Number of Shares Number of Shares
Name and address of Selling Stockholder of Firm Stock of Option Stock
--------------------------------------- ---------------- ----------------
Natural Gas Partners II, L.P 511,709 --
000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Natural Gas Partners III, L.P 699,389 --
000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Pioneer Natural Resources USA, Inc. 2,613,215 --
0000 Xxxxxxxx Xxxxxx West,
0000 X. X'Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxx (1) -- 185,862
0000 Xxxxxxx X. Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Xxx X. Xxxx (1) -- 106,699
0000 Xxxxxxx X. Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
D. Xxxxxxx Xxxxxxxxxx (1) -- 51,628
0000 Xxxxxxx X. Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
--------- ---------
Total 3,824,313 344,189
========= =========
(1) Each of these Selling Stockholders has granted the Underwriters a 30-day
option to purchase shares of Option Stock. In addition, the Company has granted
the Underwriters a 30-day option to purchase up to 229,458 shares of Option
Stock
"NGP Entities" as used in the Agreement means each of Natural Gas Partners, X.X.
XX and Natural Gas Partners, L.P. III.
"Pioneer" as used in the Agreement means Pioneer Natural Resources USA, Inc.
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EXHIBIT A
LOCK-UP LETTER AGREEMENT
September ___, 2000
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXX XXXXXXX & CO., INC.
AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS NAMED IN SCHEDULE 1
OF THE UNDERWRITING AGREEMENT
c/x Xxxxxx Brothers Inc
Three World Financial Center
Xxx Xxxx, XX 00000
Dear Sirs:
The undersigned understands that you, as representatives of the several
underwriters (the "Underwriters") to be named in Schedule 1 of an Underwriting
Agreement (the "Underwriting Agreement"), propose to enter into the Underwriting
Agreement providing for the purchase by the Underwriters of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Prize Energy Corp. (the "Company") and that the Underwriters propose to reoffer
the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Prospectus
relating to the Offering.
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In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, the undersigned will be released from
his, her or its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
-----------------------------------
Name:
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