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EXHIBIT 1
12,610,000 SHARES
TITAN EXPLORATION, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
Draft of November 21, 1996
CS FIRST BOSTON CORPORATION
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co., Inc.
As Representatives of the Several Underwriters,
c/o CS First Xxxxxx Xxxxxxxxxxx
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
1. Introductory. Titan Exploration, Inc., a Delaware corporation
("Company"), and the stockholders of the Company identified in Schedule B
hereto (the "Selling Stockholder"), propose to issue and sell 12,610,000 shares
("Firm Securities") of the Company's Common Stock, par value $.01 per share
("Securities"), and the Company also proposes to issue and sell to the
Underwriters, for whom CS First Boston Corporation, Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, Howard, Weil, Labouisse, Xxxxxxxxxx
Incorporated, X.X. Xxxxxx Securities Inc., Xxxxxx Xxxxxxx & Co., Inc. are
acting as the representatives (the "Representatives"), at the option of the
Underwriters, an aggregate of not more than 1,891,500 additional shares
("Optional Securities") of its Securities as set forth below. The Firm
Securities and the Optional Securities are herein collectively called the
"Offered Securities." The respective amounts of the Firm Securities to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule A hereto, and the number of Firm Securities to be sold by the Selling
Stockholder is set forth opposite its name in Schedule B hereto. The Company
and the Selling Stockholder are sometimes referred to herein collectively as
the "Sellers."
The Company and the Selling Stockholder hereby agree with the several
Underwriters named in Schedule A hereto ("Underwriters") as follows:
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2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees
with, the several Underwriters that:
(i) A registration statement (No. 333-14029)
relating to the Offered Securities, including a form of prospectus,
has been filed with the Securities and Exchange Commission
("Commission") and either (A) has been declared effective under the
Securities Act of 1933 ("Act") and is not proposed to be amended or
(B) is proposed to be amended by amendment or post-effective
amendment. If such registration statement ("initial registration
statement") has been declared effective, either (A) an additional
registration statement ("additional registration statement") relating
to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so
filed, has become effective upon filing pursuant to such rule and the
Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (B) such an additional
registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant
to such rule and upon such filing the Offered Securities will all have
been duly registered under the Act pursuant to the initial
registration statement and such additional registration statement. If
the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed
and the Company does not propose to amend it, and if any post-
effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the additional
registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (B) if the Company has advised the
Representatives that it proposes to file an amendment or
post-effective amendment to such registration statement, the date and
time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the
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additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended
at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of
the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of
its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration
Statement." The additional registration statement, as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement." The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement." The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus." No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration
Statement conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact
and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The preceding sentence
does not apply to statements in or omissions from a Registration
Statement or the Prospectus based upon written information
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furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 8(b).
(iii) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(iv) Each corporate subsidiary of the Company has
been duly organized and is an existing corporation in good standing
under the laws of the jurisdiction of its organization. Each of the
Company's subsidiaries that is a limited partnership has been duly
formed and is validly existing as a limited partnership under the laws
of its state of formation. Each subsidiary of the Company has full
power and authority (corporate or partnership, as applicable) to own
its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation or limited partnership in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the Company and its consolidated subsidiaries
considered as a whole. All of the issued and outstanding shares of
capital stock of each corporate subsidiary of the Company have been
duly authorized and validly issued and are fully paid and
nonassessable and are owned by the Company, directly or through
subsidiaries, free from liens, encumbrances and defects. All of the
partnership interests of each partnership subsidiary of the Company
have been duly and validly authorized and issued in accordance with
the terms of the governing partnership agreement, are fully paid and
(other than the general partner interests) nonassessable and are owned
by the Company, directly or through subsidiaries, free from liens,
encumbrances and defects.
(v) The Offered Securities and all other
outstanding shares of capital stock of the Company, including all
shares to be sold by the Selling Stockholder, have been duly
authorized; all outstanding shares of capital stock of the Company
are, and, when the Offered Securities have been delivered and paid for
in accordance with this Agreement on each Closing Date (as defined
below), such Offered Securities will have been, validly issued, fully
paid and nonassessable and will conform to the description thereof
contained under the caption "Capitalization" in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the Securities.
(vi) Except as disclosed in the Prospectus, there
are no contracts, agreements or understandings between the Company and
any person that would give rise to
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a valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment.
(vii) There are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement
under the 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 a Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act, except for
the Amended and Restated Registration Rights Agreement dated as of
September 30, 1996, among Xxxx Xxxxxxxxx, Natural Gas Partners, L.P.,
Natural Gas Partners II, L.P., Joint Energy Development Investments
Limited Partnership, First Union Corporation, Selma International
Investment Limited, and the Company; and all rights to require
registration of any Securities under that agreement have been waived
with respect to the offering contemplated hereby and for 180 days
after the date of the initial public offering of the Offered
Securities.
(viii) The Offered Securities have been approved for
listing on the Nasdaq National Market ("NASDAQ") subject to notice of
issuance.
(ix) No consent, approval, authorization, or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Offered
Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities or
Blue Sky laws.
(x) The execution, delivery and performance of
this Agreement, and the issuance and sale of the Offered Securities,
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any
subsidiary of the Company or any of their properties, or any agreement
or instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is
subject, or the charter or by-laws of the Company or any such
subsidiary, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this
Agreement.
(xi) This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) Except as disclosed in the Prospectus, the
Company and its subsidiaries have good and defensible title to all
their oil and gas properties described as
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being owned by them in the Prospectuses in accordance with standards
generally accepted in the oil and gas industry, free and clear of any
liens, encumbrances, equities, or claims of any nature, except for the
liens for taxes not yet due, liens, claims and encumbrances under gas
sales contracts, operating agreements, unitization and pooling
agreements, and such other agreements as are customarily found in
connection with comparable drilling and producing operations, or in
connection with the acquisition of producing properties, and other
liens, claims, encumbrances and title defects that are, singly and in
the aggregate, not material in amount and do not materially interfere
with the Company's or such subsidiary's use and enjoyment of its oil
and gas properties.
(xiii) The written engineering reports prepared by
Xxxxxxxxxx Petroleum Consultants, Inc. ("Xxxxxxxxxx"), an oil and gas
engineering consulting firm, as of October 1, 1996, setting forth the
engineering values attributed to the oil and gas properties of the
Company accurately reflect in all material respects the ownership
interests of the Company in the properties therein as of October 1,
1996, except as otherwise disclosed in the Prospectus. The information
furnished to Xxxxxxxxxx upon which Xxxxxxxxxx based its reports was,
at the time of delivery thereof, complete and accurate in all material
respects. No facts have arisen of which the Company has knowledge that
might cause a reasonable person to believe that any of the information
supplied to Xxxxxxxxxx was incorrect or incomplete in any material
respect.
(xiv) Except as disclosed in the Prospectus, the
Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them, except
for such certificates, authorities or permits the failure of which to
obtain would not have a material adverse effect on the Company or any
of its subsidiaries taken as a whole , and have not received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(xv) No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company,
is imminent that might have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(xvi) The Company and its subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names
and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually
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or in the aggregate have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(xvii) Except as disclosed in the Prospectus,
neither the Company nor any of its subsidiaries is in violation of any
statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.
(xviii) There are no pending actions, suits or
proceedings against or affecting the Company, any of its subsidiaries
or any of their respective properties that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the condition (financial
or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement, or which are otherwise material in the context
of the sale of the Offered Securities; and, to the Company's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(xix) The financial statements included in each
Registration Statement and the Prospectus present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis and the schedules included in each Registration
Statement present fairly the information required to be stated
therein; and the assumptions used in preparing the pro forma
financial statements included in each Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding
historical financial statement amounts.
(xx) Except as disclosed in the Prospectus, since
the date of the latest audited financial statements included in the
Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in
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the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(xxi) KPMG Peat Marwick, who have expressed their
opinions on the audited consolidated financial statements of the
Company and related schedules and on the combined statements of
revenue and direct operating expenses of certain acquired property
interests and related schedules included in the Registration
Statement, are independent public accountants as required by the Act
and the applicable published Rules and Regulations.
(xxii) The Company is not and, after giving effect
to the offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(xxiii) The Company has obtained and delivered to you
before the date hereof the written agreements of each of its
directors, officers and securityholders (including, without
limitation, its optionholders) that, for a period of 180 days after
the date of the initial public offering of the Offered Securities,
such persons will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of the Company's Securities or securities
convertible into or exchangeable or exercisable for any shares of the
Company's Securities, or publicly disclose the intention to make any
such offer, sale, pledge, disposal or filing, without the prior
written consent of CS First Boston Corporation ("CS First Boston").
(b) The Selling Stockholder represents and warrants as
follows:
(i) The Selling Stockholder is the lawful owner
of the Shares to be sold by such Selling Stockholder and now has, and
at the Closing Date (as such date is hereinafter defined) will have,
good and marketable title to the Firm Securities to be sold by such
Selling Stockholder, free and clear of any liens, encumbrances,
equities or claims, and full right, power and authority to effect the
sale and delivery of such Firm Securities; and upon the delivery of,
against payment for, such Firm Securities pursuant to this Agreement,
the Underwriters will acquire good and marketable title thereto, free
and clear of any liens, encumbrances, equities or claims.
(ii) The Selling Stockholder has full right, power
and authority to execute and deliver this Agreement and the Custody
Agreement referred to below and to perform its obligations under such
agreements. This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder. The execution and delivery of
this Agreement and the
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Custody Agreement and the consummation by the Selling Stockholder of
the transactions herein and therein contemplated and the fulfillment
by such Selling Stockholder of the terms hereof and thereof will not
require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body (except as may be required under the Act and state securities
laws or Blue Sky laws) and will not conflict with or result in a
breach of any of the terms and provisions of, or constitute a default
under the organizational documents of the Selling Stockholder, if not
an individual, or any agreement, lease, contract, indenture, mortgage,
deed of trust or other instrument or obligation to which such Selling
Stockholder is a party, or of any order, rule or regulation applicable
to such Selling Stockholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
Each of this Agreement and the Custody Agreement is a valid and
binding agreement of such Selling Stockholder, enforceable in
accordance with its terms.
(iii) The Selling Stockholder has not taken,
directly or indirectly, any action 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 securities of
the Company, and, other than as permitted by the Act, such Selling
Stockholder has not distributed and will not distribute any prospectus
or offering material in connection with the offering and sale of the
Shares.
(iv) The sale of the Firm Securities by the
Selling Stockholder pursuant hereto is not prompted by any information
concerning the Company which is not set forth in the Registration
Statements. The information pertaining to the Selling Stockholder
under the caption "Principal and Selling Stockholders" in the
Prospectus is complete and accurate in all material respects. If there
is any change in such information with respect to the Selling
Stockholder, the Selling Stockholder will immediately notify you of
such change.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Sellers agree to sell
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Sellers, at a purchase price of $_______ per share, the
respective numbers of shares of Firm Securities set forth opposite the names of
the Underwriters in Schedule A hereto.
Certificates in negotiable form for the total number of the Securities
sold hereunder by the Selling Stockholder have been placed in custody with
__________________ as custodian (the "Custodian") pursuant to the Custody
Agreement executed by the Selling Stockholder for delivery of all Firm
Securities to be sold hereunder by the Selling Stockholder. The Selling
Stockholder specifically agrees that the Firm Securities represented by the
certificates held in custody for the Selling Stockholder under the Custody
Agreement are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholder for such custody are to that
extent
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irrevocable, and that the obligations of the Selling Stockholder hereunder
shall not be terminable by any act or deed of the Selling Stockholder (or by
any other person, firm or corporation including the Company, the Custodian or
the Underwriters) or by operation of law (including the death of an individual
Selling Stockholder or the dissolution of a corporate Selling Stockholder) or
by the occurrence of any other event or events, except as set forth in the
Custody Agreement. If any such event should occur prior to the delivery to the
Underwriters of the Firm Securities hereunder, certificates for the Firm
Securities shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such event has not occurred. The Custodian
is authorized to receive and acknowledge receipt of the proceeds of sale of the
Securities held by it against delivery of such Securities.
If on the Closing Date, the Selling Stockholder fails to sell the Firm
Securities which such Selling Stockholder has agreed to sell on such date as
set forth in Schedule B hereto, the Company agrees that it will sell or arrange
for the sale of that number of shares of Common Stock to the Underwriters which
represents Firm Securities which such Selling Stockholder has failed to so
sell, as set forth in Schedule B hereto, or such lesser number as may be
requested by the Representatives. In no event shall this Section be construed
to excuse the Selling Stockholder from the full performance of its obligations
under this Agreement.
The Company and the Selling Stockholder will deliver the Firm
Securities to the Representatives for the accounts of the Underwriters, against
payment of the purchase price in Federal (same day) funds by official check or
checks (or wire transfer to an account previously designated to CS First Boston
by the Company at a bank acceptable to CS First Boston) at the office of
Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
at 9:00 A.M., New York time, on _________ , or at such other time not later
than seven full business days thereafter as CS First Boston and the Company
determine, such time being herein referred to as the "First Closing Date."
Unless the Representatives specify otherwise, the certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and names as CS First Boston reasonably requests, and will be made available
for checking and packaging at the New York City office of CS First Boston at
least 24 hours prior to the First Closing Date.
In addition, upon written notice from CS First Boston given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by CS First Boston to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously
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purchased have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by CS First Boston to the Company. It is
understood that CS First Boston is authorized to make payment for and accept
delivery of such Optional Securities on behalf of the Underwriters pursuant to
the terms of CS First Boston's instructions to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CS
First Boston but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will
deliver the Optional Securities being purchased on each Optional Closing Date
to the Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by official
check or checks (or wire transfer to an account previously designated to CS
First Boston by the Company at a bank acceptable to CS First Boston) at the
office of Xxxxxxxx & Knight, P.C. previously identified. Unless the
Representatives specify otherwise, the certificates for the Optional Securities
so to be delivered will be in definitive form, in such denominations and names
as CS First Boston reasonably requests, and will be made available for checking
and packaging at the New York City office of CS First Boston at least 24 hours
prior to the Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CS First Boston,
subparagraph (4)) of Rule 424(b) not later than the earlier of (i) the second
business day following the execution and delivery of this Agreement or (ii) the
fifteenth business day after the Effective Date of the Initial Registration
Statement. The Company will advise CS First Boston promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not
occurred as of such execution and delivery, the Company will file the
additional registration statement or, if filed, will file a post- effective
amendment thereto with the Commission pursuant to and in accordance with Rule
462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, on or prior to the time the Prospectus is printed and
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distributed to any Underwriter, or will make such filing at such later date as
shall have been consented to by CS First Boston.
(b) The Company will advise CS First Boston promptly of
any proposal to amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial Registration
Statement, the Additional Registration Statement (if any) or the Prospectus and
will not effect such amendment or supplementation without CS First Boston's
consent; and the Company will also advise CS First Boston promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus and
of the institution by the Commission of any stop order proceedings in respect
of a Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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 to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company will promptly notify CS First Boston of
such event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither CS First
Boston's consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 7.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally available
to its security holders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration Statement
(or, if later, the Effective Date of the Additional Registration Statement)
which will satisfy the provisions of Section 11(a) of the Act. For the purpose
of the preceding sentence, "Availability Date" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last quarter
of the Company's fiscal year, "Availability Date" means the 90th day after the
end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives
copies of each Registration Statement (six of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so long as
delivery of a prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any Underwriter or dealer,
the Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CS First Boston requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on
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the business day following the later of the execution and delivery of this
Agreement or the Effective Time of the Initial Registration Statement. All
other documents shall be so furnished as soon as available. The Company will
pay the expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as CS First
Boston designates and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years hereafter, the
Company will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company will
furnish to the Representatives (i) as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to stockholders.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse the
Underwriters (if and to the extent incurred by them) for any filing fees and
other reasonable expenses (including fees and disbursements of counsel)
incurred by them in connection with qualification of the Offered Securities for
sale under the laws of such jurisdictions as CS First Boston designates and the
printing of memoranda relating thereto, for the filing fee of the National
Association of Securities Dealers, Inc. relating to the Offered Securities, for
any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
(i) For a period of 180 days after the date of the
initial public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating to,
any additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer, sale,
pledge, disposal or filing, without the prior written consent of CS First
Boston, except issuances of Securities pursuant to the exercise of employee
stock options outstanding on the date hereof.
6. Certain Agreements of the Selling Stockholder. The Selling
Stockholder covenants and agrees with the several Underwriters that:
(a) For a period of 180 days after the date of the
initial public offering of the Offered Securities, the Selling Stockholder will
not offer, sell, contract to sell, pledge or otherwise
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dispose of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of the Company's
Securities or securities convertible into or exchangeable or exercisable for
any shares of the Company's Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposal or filing, without the prior
written consent of CS First Boston.
(b) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of
1983 with respect to the transactions herein contemplated, the Selling
Stockholder shall deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(c) The Selling Stockholder shall not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company, and other than as
permitted by the Act, the Selling Stockholder shall not distribute any
prospectus or other offering material in connection with the offering of the
Shares.
7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder herein, to the accuracy of the statements of Company officers and
Selling Stockholder made pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholder of their obligations hereunder and
to the following additional conditions precedent:
(a) The Representatives shall have received a letter,
dated the date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of the
amendment or post- effective amendment to the registration statement to be
filed shortly prior to such Effective Time), of KPMG Peat Marwick confirming
that they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating to the
effect that:
(i) in their opinion the financial statements and
financial statement schedules examined by them and included in the
Registration Statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
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(ii) they have performed the procedures specified
by the American Institute of Certified Public Accountants for a review
of interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included in the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who
have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements
included in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to
such unaudited financial statements for them to be in
conformity with generally accepted accounting principles;
(B) the unaudited consolidated net
operating income, net income and net income per share amounts
for the nine-month period ended September 30, 1996, included
in the Prospectus do not agree with the amounts set forth in
the unaudited consolidated financial statements for those same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the
audited statements of income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a subsequent
specified date not more than five days prior to the date of
this Agreement, there was any change in the capital stock or
any increase in short-term indebtedness or long-term debt of
the Company and its consolidated subsidiaries or, at the date
of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net
assets, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(D) for the period from the closing date
of the latest income statement included in the Prospectus to
the closing date of the latest available income statement read
by such accountants there were any decreases, as compared with
the corresponding period of the previous year, in consolidated
net income,
except in all cases set forth in clauses (B), (C), and (D)
above for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter;
(iv) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other financial
information contained in the Registration
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Statements (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system, or are
derived directly or indirectly from the audited or interim financial
statements of certain acquired properties or the pro forma financial
statements or the Company, or are derived directly from such
statements or records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter;
(v) they have read the unaudited pro forma
condensed consolidated financial statements included in the
Registration Statement and inquired of officials of the Company and of
the companies from whom the properties were acquired for which
information is presented in the Registration Statement about the basis
for their determination of the proforma adjustments, and whether the
unaudited pro forma condensed consolidated financial statements
included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of rule
11-02 of Regulation S-X;
(vi) they have proved the arithmetic accuracy of
the application of the pro forma adjustments to the historical amounts
in the unaudited pro forma condensed consolidated financial
statements; and
(vii) on the basis of the review referred to in (v)
and (vi) above, nothing came to their attention that caused them to
believe that the unaudited pro forma condensed consolidated financial
statements included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of rule 11-02 of Regulation S-X and that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of those statements.
For purposes of this subsection, (A) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (B) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to
such execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (C) "Prospectus" shall mean the prospectus included in the
Registration Statements.
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(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York time, on
the date of this Agreement or such later date as shall have been consented to
by CS First Boston. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than 10:00 P.M.,
New York time, on the date of this Agreement or, if earlier, the time the
Prospectus is printed and distributed to any Underwriter, or shall have
occurred at such later date as shall have been consented to by CS First Boston.
If the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and Section
5(a) of this Agreement. Prior to such Closing Date, no stop order suspending
the effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Company or the Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and makes
it impractical or inadvisable to proceed with completion of the public offering
or the sale of and payment for the Offered Securities; (ii) any downgrading in
the rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange,
or any setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any exchange or in
the over-the counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Representatives shall have received an opinion,
dated on such Closing Date, of Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
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and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business of the Company and
its consolidated subsidiaries considered as a whole;
(ii) Each subsidiary of the Company has been duly
organized and is an existing corporation or limited partnership in
good standing under the laws of the jurisdiction of its organization,
with power and authority (corporate or partnership, as applicable) to
own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation or limited partnership in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business of the Company and its consolidated
subsidiaries considered as a whole; all of the issued and outstanding
shares of capital stock of each corporate subsidiary of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable and are owned by the Company, directly or through
subsidiaries, free from liens, encumbrances and defects; and all of
the partnership interests of each partnership subsidiary of the
Company have been duly and validly authorized and issued in accordance
with the terms of the governing partnership agreement, are fully paid
and (other than the general partner interests) nonassessable and are
owned by the Company, directly or through subsidiaries, free from
liens, encumbrances and defects;
(iii) The Offered Securities delivered on such
Closing Date and all other outstanding shares of the Common Stock of
the Company, including the Shares to be sold by the Selling
Stockholder, have been duly authorized and validly issued, are fully
paid and nonassessable and conform in all material respects to the
description thereof contained in the Prospectus; the stockholders of
the Company have no preemptive rights with respect to the Securities;
and the certificates for the Common Stock, assuming they are in the
form filed with the Commission, are in due and proper form and comply
with the requirements of Delaware law, the Company's certificate of
incorporation and by-laws, and the requirements of the NASDAQ;
(iv) Such counsel do not know of any legal or
governmental proceedings required to be described in a Registration
Statement or the Prospectus which are not described as required or of
any contracts or documents of a character required to be described in
a Registration Statement or the Prospectus or to be filed as exhibits
to a Registration Statement which are not described and filed as
required;
(v) The Company has authorized and outstanding
capital stock as set forth under the caption "Capitalization" in the
Prospectus; and the statements in the Prospectus set forth under the
caption "Description of Capital Stock," insofar as such statements
constitute
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a summary of documents referred to therein or matters of law,
accurately summarize, in all material respects, such documents and
matters;
(vi) Based on current law, the holding periods of
the holders of the Company's unregistered securities for purposes of
Rule 144 under the Act are as stated under the caption "Shares
Eligible for Future Sale" in the Prospectus;
(vii) There are no contracts, agreements or
understandings known to such counsel between the Company and any
person granting such person the right to require the Company to file a
registration statement under the 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 Act, except for the Amended and Restated
Registration Rights Agreement dated as of September 30, 1996, among
Xxxx Xxxxxxxxx, Natural Gas Partners, L.P., Natural Gas Partners II,
L.P., Joint Energy Development Investments Limited Partnership, First
Union Corporation, Selma International Investment Limited, and the
Company; and all rights to require registration of any Securities
under that agreement have been waived with respect to the offering
contemplated hereby and for 180 days after the date of the initial
public offering of the Offered Securities;
(viii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the Offered
Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under foreign securities
laws or state securities or Blue Sky laws;
(ix) The execution, delivery and performance of
this Agreement and the issuance and sale of the Offered Securities
will not (a) to such counsel's knowledge, result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any such
subsidiary is subject (except for such breaches, violations or
defaults that would not have a material adverse affect on the business
of the Company); or (b) result in any violation of the charter,
by-laws or partnership agreement (as applicable) of the Company or any
such subsidiary; and the Company has full corporate power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
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(x) This Agreement has been duly authorized,
executed and delivered by the Sellers;
(xi) The Offered Securities have been approved for
listing on the NASDAQ upon notice of issuance;
(xii) Each Selling Stockholder has full legal
right, power and authority, and any approval required by law (other
than as required by state securities and blue sky laws as to which
such counsel need express no opinion), to sell, assign, transfer and
deliver the Firm Securities to be sold by such Selling Stockholder;
(xiii) The Custody Agreement executed and delivered
by each Selling Stockholder is a valid and binding agreement of each
such Selling Stockholder, enforceable in accordance with its terms;
(xiv) Upon the delivery of and payment for the Firm
Securities as contemplated hereby, each of the Underwriters who has
acquired Firm Securities from the Selling Stockholder in good faith
and without notice of any adverse claim within the meaning of the
Uniform Commercial Code will acquire the Firm Securities being sold by
each Selling Stockholder on the Closing Date, free of any adverse
claim. The owner of such Firm Securities, if other than the Selling
Stockholder, is precluded from asserting against the Underwriters the
ineffectiveness of any authorized endorsement or instruction, assuming
the Underwriters purchased such Firm Securities for value in good
faith and without notice of any adverse claim;
(xv) The Initial Registration Statement was
declared effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any) was filed
and became effective under the Act as of the date and time (if
determinable) specified in such opinion, the Prospectus either was
filed with the Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the Additional
Registration Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the effectiveness
of a Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; and
(xvi) Such counsel have no reason to believe that
any part of a Registration Statement or any amendment thereto, as of
its effective date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or
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that the Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data or reserve engineering
data contained in the Registration Statements or the Prospectus.
(e) The Representatives shall have received from one or
more counsel for the Company an opinion or opinions, dated such Closing Date,
with respect to the title of the Company to the properties that the Company
acquired in the 1996 Acquisition (as defined in the Prospectus), in form and
substance reasonably satisfactory to the Representatives.
(f) The Representatives shall have received from Xxxxxx &
Xxxxxx L.L.P., counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Representatives shall have received a
certificate, dated such Closing Date, of the President or any Vice-President
and a principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to such Closing Date; no stop order suspending the effectiveness of
any Registration Statement has been issued and no proceedings for that purpose
have been instituted, to the knowledge of such officer, or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to
Rule 462(b), including payment of the applicable filing fee in accordance with
Rule 111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to any Underwriter; and, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as described in
such certificate.
(h) The Representatives shall have received a
certificate, dated such Closing Date, of the Selling Stockholder in which the
Selling Stockholder, to the best of its knowledge after reasonable
investigation, shall state that the representations and warranties of the
Selling Stockholder in this Agreement are true and correct and that the Selling
Stockholder has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to such Closing
Date.
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(i) The Representatives shall have received a letter,
dated such Closing Date, of KPMG Peat Marwick LLP, which meets the requirements
of subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than five days prior to such Closing
Date for the purposes of this subsection.
(j) At the time of execution of this Agreement and at
such Closing Date, the Representatives shall have received a letter of
Xxxxxxxxxx, dated respectively the date hereof and the Closing Date,
substantially in the forms heretofore approved by the Representatives.
(k) The Representatives shall have received such other
certificates of the Company, the Selling Stockholder, and the Company's
transfer agent as the Representatives may reasonably request.
The Company will furnish the Representatives with such originals and conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably request. CS First Boston may in its sole discretion
waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with information furnished in writing to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c)
below.
(b) The Selling Stockholder agrees to indemnify and hold
harmless each Underwriter and the Company against any losses, claims, damages
or liabilities, joint or several, to which such party may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement,
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the Prospectus, or any amendment or supplemental thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
such party for any legal or other expenses reasonably incurred by such party in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Selling Stockholder will only be liable for information furnished in writing by
or on behalf of the Selling Stockholder expressly for use in the Registration
Statement or the Prospectus or in any preliminary prospectus, it being
understood and agreed that the only such information furnished by the Selling
Stockholder consists of the following information in the Prospectus furnished
on behalf of the Selling Stockholder: the name, address, number of shares
beneficially owned prior to the offering, and number of shares beneficially
owned after the offering appearing in the table under the caption "Principal
and Selling Stockholders" in the Prospectus. Notwithstanding anything to the
contrary contained in the preceding sentence, the Selling Stockholder will not
be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with information furnished in writing to the
Company by any Underwriter through the Representatives specifically for use
therein; and provided further, that the indemnification obligation of the
Selling Stockholder shall be limited to the aggregate public offering price of
the shares sold by the Selling Stockholder.
(c) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company and the Selling Stockholder against any
losses, claims, damages or liabilities to which the Company or the Selling
Stockholder may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished in writing to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company or the Selling Stockholder in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legends concerning
over-allotments, stabilization and transactions by affiliates of the
Underwriters on the inside front cover page, the concession and reallowance
figures appearing in the fourth paragraph under the caption "Underwriting," and
the information contained in the fifth and sixth paragraphs under the caption
"Underwriting."
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(d) Promptly after receipt by an indemnified party under
this Section or Section 10 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a), (b) or (c) above or Section 10, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under subsection (a), (b) or
(c) above or Section 10. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section or Section 10, as the case may be, for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action.
(e) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or
(c) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Sellers on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Sellers on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Sellers bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Sellers or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim
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which is the subject of this subsection (e). Notwithstanding the provisions of
this subsection (e), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling
Stockholder under this Section and Section 10 shall be in addition to any
liability which the Company or the Selling Stockholder may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the QIU (as hereinafter defined) within the meaning
of the Act; and the obligations of the Underwriters under this Section shall be
in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed a Registration
Statement to each person, if any, who controls the Company within the meaning
of the Act, and to each Selling Stockholder.
9. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of share of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing
Date, CS First Boston may make arrangements satisfactory to the Company and the
Selling Stockholder for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate number of shares of Offered Securities with respect to which
such default or defaults occur exceeds 10% of the total of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to CS First Boston, the Company and the Selling
Stockholder for the purchase of such Offered Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non- defaulting Underwriter or the
Sellers, except as provided in Section 11 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default
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10. Qualified Independent Underwriter. The Company hereby confirms
that at its request CS First Boston has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Offered
Securities. The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon the QIU's acting (or alleged failing to act) as such "qualified
independent underwriter" and will reimburse the QIU for any legal or other
expenses reasonably incurred by the QIU in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers, of the Selling Stockholder, and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the
Company, the Selling Stockholder, or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated
pursuant to Section 9 or if for any reason the purchase of the Offered
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company, the Selling Stockholder and
the Underwriters pursuant to Section 8 and the obligations of the Company
pursuant to Section 10 shall remain in effect, and if any Offered Securities
have been purchased hereunder the representations and warranties in Section 2
and all obligations under Section 5 shall also remain in effect. If the
purchase of the Offered Securities by the Underwriters is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 9 or the occurrence of any event specified in clause (iii),
(iv) or (v) of Section 7(c), the Company will reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
12. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives, c/o CS First Boston Corporation, Park Avenue
Plaza, New York, N.Y. 10055, Attention: Investment Banking
Department-Transactions Advisory Group, or, if sent to the Company or the
Selling Stockholder, will be mailed, delivered or telegraphed and confirmed to
Titan Exploration, Inc., 000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
Attention: Xxxx X. Xxxxxxxxx; provided, however, that any notice to an
Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
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13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
14. Representation of Underwriters. The Representatives will act
for the several Underwriters in connection with this offering, and any action
under this Agreement taken by the Representatives jointly or by CS First Boston
will be binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company and the Selling Stockholder hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of
the counterparts hereof, whereupon it will become a binding agreement between
the Company, the Selling Stockholder and the several Underwriters in accordance
with its terms.
Very truly yours,
TITAN EXPLORATION, INC.
By:
-------------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
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SELLING STOCKHOLDER
FIRST UNION CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CS FIRST BOSTON CORPORATION
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co., Inc.
By:
----------------------------------
(Authorized Signatory)
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SCHEDULE A
Number of
---------
Underwriter Firm Securities
----------- ---------------
CS First Boston Corporation . . . . . . . . . . . . . . . .
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation . . . .
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated . . . . .
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . . . . .
Xxxxxx Xxxxxxx & Co., Inc. . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,610,000
============
Schedule X-0
00
XXXXXXXX X
Number of
---------
Selling Stockholder Firm Securities
------------------- ---------------
First Union Corporation 110,000
-------
Total . . . . . . . . . . . . . . . . 110,000
=======
Schedule B-1
