EXHIBIT 1.1
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
2,000,000 Shares
of
Common Stock
(Par value $0.01 per share)
PURCHASE AGREEMENT
July 7, 1999
XXXXXX BROTHERS INC.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Cross Timbers Oil Company, a Delaware corporation (the "Company"),
proposes to issue and sell 2,000,000 shares (the "Securities") of common
stock, par value $0.01 per share (the "Common Stock"), of the Company.
The Company shall offer the Securities through Xxxxxx Brothers Inc.
(the "Underwriter") pursuant to Section 2 hereof.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as it deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-46909) and pre-
effective Amendment No. 1 thereto for the registration of the Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement. Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission and contains a form of prospectus (the "Base
Prospectus"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus supplement in accordance with
paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. The
Base Prospectus and each such supplement thereto are herein collectively
called the "Prospectus." The information included in any such prospectus
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at
the time it became effective or included in a prospectus supplement filed
in respect of such registration statement pursuant to Rule 424(b) is
referred to as "Rule 424(b) Information." Such registration statement (as
so amended, if applicable), including the exhibits thereto, schedules
thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 424(b) Information is herein called the
"Registration Statement." For purposes of this Agreement, all references
to the Registration Statement, the Prospectus, or any amendment or
supplement to any of the foregoing shall be deemed to include the copy
filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, Prospectus or the Prospectuses (or other references
of like import) shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to
the Registration Statement, or the Prospectus shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of
1934 (the "1934 Act") which is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter, as of the date hereof, and, as
of the Closing Time referred to in Section 2(b) hereof, and agrees with the
Underwriter, as follows:
(1) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement and any post-
effective amendments thereto (including, the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the
"Annual Report on Form 10-K")) became effective and at the Closing
Time, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Time, included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished in writing by the Underwriter expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations,
and the Prospectus delivered to the Underwriter for use in connection
with the offering of the Securities will, at the time of such
delivery, be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, included the most recent
Annual Report of the Company on Form 10-K filed with the Commission,
the Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1999 filed with the Commission, and each Current Report of the
Company on Form 8-K filed with the Commission since the end of the
fiscal year to which such Annual Report relates. The documents
incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective
or at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the dates of
the Prospectus, and at the Closing Time did not and will not include
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, in the light of the circumstances under which they were made,
not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement and the Prospectus are independent certified
public accountants with respect to the Company and its Subsidiaries
within the meaning of Regulation S-X under the 1933 Act.
(4) Financial Statements. The financial statements of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, together with the related schedules and
notes, as well as those financial statements, schedules and notes of
any other entity included therein, present fairly in all material
respects the financial position of the Company and its consolidated
Subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its
consolidated Subsidiaries for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement
and Prospectus present fairly in all material respects in accordance
with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly in all material respects the information
shown therein and have been compiled on a basis consistent with that
of the audited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus. In
addition, any pro forma financial statements of the Company and its
Subsidiaries and the related notes thereto included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly in all material respects 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 used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(5) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise (a "Material Adverse Effect"), whether or not arising in
the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its Subsidiaries, other than
those arising in the ordinary course of business, which are material
with respect to the Company and its Subsidiaries considered as one
enterprise and (C) except for regular quarterly dividends on the
Common Stock and on the Series A Convertible Preferred Stock, par
value $0.01 per share, of the Company (the "Series A Preferred
Stock"), in amounts per share that are consistent with past practice,
respectively, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the state of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Agreement. The
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
(7) Authorization of Agreements. This Agreement has been, duly
authorized, executed and delivered by the Company.
(8) Authorization of Common Stock. The Securities being sold to
the Underwriter pursuant to this Agreement have been duly authorized
by the Company for issuance and sale to the Underwriter pursuant to
this Agreement. The Securities, when issued and delivered by the
Company pursuant to this Agreement, against payment of the
consideration therefore specified in this Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights arising by operation of law, under
the charter and by-laws of the Company or under any agreement to which
the Company or any of its Subsidiaries is a party, or otherwise. No
holder of the Securities will be subject to personal liability by
reason of being such a holder.
(9) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments"),
except for such defaults as would not result in a Material Adverse
Effect. The execution, delivery and performance of this Agreement and
any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of the
Company or any of its Subsidiaries pursuant to, any Agreements and
Instruments, except for such conflicts, breaches, defaults, events or
liens, charges or encumbrances that, singly or in the aggregate, would
not result in a Material Adverse Effect, nor will such action result
in any violation of any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its Subsidiaries or any of their assets or
properties, which violation would result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its Subsidiaries. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.
(10) Violation of Law. Neither the Company nor any Subsidiary is
in violation of any law, ordinance, governmental rule or regulation or
court decree to which it may be subject, which violation might result
in a Material Adverse Effect.
(11) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or
filed as required.
(12) No Stabilization. Neither the Company nor any of its
officers, directors or controlling persons has taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(13) Investment Company Act; Public Utility Holding Company Act.
The Company is not, and upon the issuance and sale of the Securities
as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be (A) an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
promulgated thereunder or (B) a "holding company" or "affiliate" of a
"holding company" or "public utility," as such terms are defined in
the Public Utility Holding Company Act of 1935, and the rules and
regulations of the Commission promulgated thereunde.
(b) Officers' Certificates. Any certificate signed by any officer of
the Company or any Subsidiary and delivered to the Underwriter in
connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to the Underwriter as to the
matters covered thereby on the date of such certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) The Securities. Subject to the terms and conditions set forth
herein, the Company agrees to sell to the Underwriter, and the Underwriter
agrees to purchase, the Securities at a price of $13.25 per share. The
Underwriter proposes to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
(b) Payment. Payment of the purchase price for, and delivery of, the
Securities shall be made at the office of Xxxxx, Xxxx & Xxxxxxx, P.C., 000
Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000, or at such other place as
shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.
(Eastern time) on the third business day after the date of this Agreement
(such time and date of payment and delivery being herein called "Closing
Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against
delivery to the Underwriter for the account of the Underwriter of the
Securities to be purchased by it.
(c) Denominations; Registration. The Securities and certificates
therefor and shall be in such denominations and registered in such names as
the Underwriter may request in writing prior to the Closing Time. The
Securities and certificates therefor will be made available for examination
and packaging by the Underwriter in the City of New York not later than
10:00 A.M. (Eastern time) on the business day of the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter, as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 415 and Rule 424, if and as applicable, of the
1933 Act Regulations and will notify the Underwriter immediately, and
confirm the notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing
of any supplement or amendment to the Prospectus, (ii) the receipt of
any comments from the Commission, (iii) any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424 and will take such
steps as it deems necessary to ascertain promptly whether the
Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will
promptly file the Prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Underwriter
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b) of the
1933 Act Regulations) or any amendment, supplement or revision to
either the Prospectuses included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Underwriter with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Underwriter or its counsel shall
reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Underwriter and counsel for the
Underwriter, without charge, (i) signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein), (ii) copies of the Registration Statement and each amendment
thereto in the form electronically filed with the Commission pursuant
to XXXXX and (iii) signed copies of all consents and certificates of
experts, and will also deliver to the Underwriter, without charge, a
conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits). The Registration
Statement and any amendments or supplements thereto furnished to the
Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to the
Underwriter, without charge, as many copies of the Prospectus the
Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to the Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus and any
amendment or supplement thereto as the Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the
Registration Statement and the Prospectus. If at any time when a
Prospectus is required by the 1933 Act or the 1934 Act to be delivered
in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriter or for the Company, to amend
the Registration Statement in order that the Registration Statement
will not 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 or to amend or supplement
the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
the light of the circumstances existing at the time it is delivered to
a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Company will furnish to the
Underwriter, without charge, such number of copies of such amendment
or supplement as the Underwriter may reasonably request.
(f) Earnings Statement. The Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make
generally available to its security holders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds".
(h) Listing. The Company will use its best efforts to effect
the listing of the Securities, prior to the Closing Time, on the New
York Stock Exchange.
(i) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing and
delivery to the Underwriter of this Agreement, and such other documents as
may be required in connection with the purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
Securities and certificates for the Securities to the Underwriter,
including any transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriter, (iv) the
fees and disbursements of the Company's counsel, accountants and other
advisors or agents (including transfer agents and registrars) (v) the
printing and delivery to the Underwriter of copies of the Prospectus and
any amendments or supplements thereto and (vi) the fees and expenses
incurred in connection with the listing of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 hereof, the
Company shall reimburse the Underwriter for all of its reasonable out-of-
pocket expenses, including the reasonable fees and disbursements of counsel
for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligation
of the Underwriter to purchase and pay for the Securities pursuant to this
Agreement is subject to the accuracy of the representations and warranties
of the Company herein or in certificates of any officer of the Company or
any of its Subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations
hereunder, and to the following further condition:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose
shall have been initiated or be pending or threatened by the
Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing
information relating to the description of the Securities, the
specific method of distribution and similar matters shall have been
filed with the Commission in accordance with Rule 424(b)(1), (2), (3),
(4) or (5), as applicable.
(b) Officers' Certificate. At Closing Time, the Underwriter
shall have received a certificate of the Company, executed by the
President or a Vice President of the Company and the chief financial
officer or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) the representations and
warranties in Section 1 hereof (other than those in Sections 1(a)(5)
and 1(a)(9) hereof) are true and correct with the same force and
effect as though expressly made at and as of the Closing Time,
(ii) the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iii) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or, to
the Company's knowledge, threatened by the Commission.
(c) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing, subject only to official notice of
issuance on the New York Stock Exchange.
(d) Termination of Terms Agreements. If any condition specified
in this Section 5 shall not have been fulfilled when and as required
to be fulfilled, this Agreement may be terminated by the Underwriter
by notice to the Company at any time at or prior to the Closing Time,
and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 6
and 7 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the
Underwriter, its officers and employees and each person, if any, who
controls the 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 the securities), to which the 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
any Registration Statement or the Prospectus or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in
the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky application or filing 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 the Underwriter in connection
with, or relating in any manner to, the Securities 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 the Underwriter through its gross negligence or
willful misconduct), and shall reimburse the Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the 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 the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with
written information concerning the Underwriter furnished to the
Company by the Underwriter by or specifically for inclusion therein
which information consists solely of the information specified in
Section 6(e). The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to the Underwriter or
to any officer, employee or controlling person of the Underwriter.
(b) The Underwriter 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, 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 (A) in the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or (B) in any Blue Sky
application or filing or (ii) the omission or alleged omission to
state in the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky application or
filing 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 the Underwriter
furnished to the Company by the Underwriter specifically for inclusion
therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer 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. The foregoing indemnity
agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee
or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 6 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 6, 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 6 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 6.
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 6 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 Underwriter shall
have the right to employ counsel to represent jointly the Underwriter
and its 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 Underwriter against the Company under this
Section 6 if, in the reasonable judgment of the Underwriter, it is
advisable for the Underwriter, and its 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. 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 indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b) 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 on the one hand and the
Underwriter 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
Company on the one hand and the Underwriter 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 on
the one hand and the Underwriter 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 Securities purchased under this Agreement (before
deducting expenses) received by the Company, on the one hand, and the total
underwriting compensation received by the Underwriter with respect to the
Securities purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Securities under this
Agreement, in each case as set forth in the "Underwriting" section 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 or the Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree
that it would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation 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 6(d), 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 6(d), the Underwriter shall not 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 was offered to
the public exceeds the amount of any damages which the Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges that
the statements with respect to the public offering of the Securities
by the Underwriter set forth in the fifth paragraph on the cover page
and under the caption "Underwriting" in, the Prospectus are correct
and constitute the only information concerning the Underwriter
furnished in writing to the Company by or on behalf of the Underwriter
specifically for inclusion in the Registration Statement and the
Prospectus.
SECTION 7. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto or thereto shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter or any controlling person, or by or on behalf of
the Company, and shall survive delivery of and payment for the Securities.
SECTION 8. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail,
telex or facsimile transmission 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 6(c), 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
or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Xxxxx X. XxXxxxxx, General
Counsel (Fax: (000) 000-0000);
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof.
SECTION 9. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriter, the Company, and their respective
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 contained in this
Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control the Underwriter within the meaning of Section
15 of the Securities Act and any officer or employee entitled to
indemnification under Section 6(a) and (B) the indemnity agreement of the
Underwriter contained in Section 6(b) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of the Company who
have signed the Registration Statement and any person controlling the
Company 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 9, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 10. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in
this Agreement or made by or on behalf on them, respectively, pursuant to
this Agreement, shall survive the delivery of and payment for the
Securities 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.
SECTION 11. Definition of the Terms "Business Day" and Subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday,
Tuesday, Wednesday, Thursday or Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "Subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations.
SECTION 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York. Each party irrevocably
agrees that any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby ("Related
Proceedings") may be instituted in the federal courts of the United States
of America located in the City of New York or the courts of the State of
New York in each case located in the Borough of Manhattan in the City of
New York (collectively, the "Specified Courts"), and irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court (a "Related Judgment"), as
to which such jurisdiction is non-exclusive) of such courts in any such
suit, action or proceeding. The parties further agree that service of any
process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action
or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue
of any lawsuit, action or other proceeding in the Specified Courts, and
hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such lawsuit, action or other
proceeding brought in any such court has been brought in an inconvenient
forum.
SECTION 13. 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.
SECTION 14. 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.
If the foregoing correctly sets forth the agreement between the
Company and the Underwriter, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
CROSS TIMBERS OIL COMPANY
By: /s/ X. Xxxxxxx Seeds
Name: X. Xxxxxxx Seeds
Title: Vice President
Accepted:
Xxxxxx Brothers Inc.
By /s/ Xxxx Xxxxxx
Authorized Representative
