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XXXXXX PETROLEUM COMPANY
3,200,000 Shares
Common Stock
($0.01 par value)
UNDERWRITING AGREEMENT
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November 3, 1999
X.X. XXXXXXX & SONS, INC.
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX INCORPORATED
XXXXXXX RICE & COMPANY L.L.C.
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Xxxxxx Petroleum Company, a Delaware corporation (the
"Company"), hereby addresses you as the representatives (the "Representatives")
of each of the persons, firms and corporations listed on Schedule I hereto
(collectively, the "Underwriters") and hereby confirms its agreement with the
several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell to the
Underwriters 3,200,000 shares of its Common Stock, par value $0.01 per share
(the "Firm Shares"). Solely for the purpose of covering over-allotments in the
sale of the Firm Shares, the Company further proposes to grant to the
Underwriters the right to purchase up to an additional 480,000 shares of Common
Stock (the "Option Shares"), as provided in Section 3 of this Agreement. The
Firm Shares and the Option Shares are herein sometimes referred to as the
"Shares" and are more fully described in the Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each such Underwriter agrees, severally and not jointly, (a)
to purchase from the Company at a purchase price of $11.225 per share, the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) to purchase
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from the Company any additional number of Option Shares which such Underwriter
may become obligated to purchase pursuant to Section 3 hereof.
Delivery of the Shares to the Underwriters against payment of the
purchase price therefor in immediately available funds by wire transfer shall be
made prior to 1:00 p.m., New York time, on November 9, 1999, in book-entry form
through the facilities of The Depository Trust Company, New York, New York
("DTC"), or at such other time and date as may be agreed upon in writing by the
Company and the Underwriters. Delivery of the documents required by Section 6
hereof with respect to the Shares shall be made at such time and date at the
offices of Xxxxxx & Xxxxx, LLP, 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000, or at such other location as may be agreed upon in writing by the Company
and the Underwriters. For purposes of this Agreement, "Closing Date" shall mean
the hour and date of such delivery and payment.
The Company will cause its transfer agent to deposit as original issue
the Shares pursuant to the Full Fast Delivery Program of DTC.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose funds
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to
the public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company hereby
grants an option to the Underwriters to purchase from it up to 480,000 Option
Shares, on the same terms and conditions as the Firm Shares; provided, however,
that such option may be exercised only for the purpose of covering any
over-allotments which may be made by them in the sale of the Firm Shares. No
Option Shares shall be sold or delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
The option is exercisable on behalf of the several Underwriters by you,
as Representatives, at any time, and from time to time, before the expiration of
30 days from the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next day thereafter when the New York
Stock Exchange is open for trading), for the purchase of all or part of the
Option Shares covered thereby, by notice given by you to the Company in the
manner provided in Section 12 hereof, setting forth the number of Option Shares
as to which the Underwriters are exercising the option, and the date of delivery
of said Option Shares, which date shall not be more than five business days
after such notice unless otherwise agreed to by the parties. You may terminate
the option at any time, as to any unexercised portion thereof, by giving written
notice to the Company to such effect.
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You, as Representatives, shall make such allocation of the Option
Shares among the Underwriters as may be required to eliminate purchases of
fractional Shares.
Delivery of the Option Shares with respect to which the option shall
have been exercised shall be made in book-entry form through the facilities of
DTC (or at such other place as you and the Company may mutually agree upon),
against payment by you of the per share purchase price to the Company by wire
transfer of immediately available funds. Such payment and delivery shall be made
at 10:00 a.m., New York time, on the date designated in the notice given by you
as above provided for (which may be the same as the Closing Date), unless some
other date and time are agreed upon, which date and time of payment and delivery
are called the "Option Closing Date." On the Option Closing Date, the Company
shall provide the Underwriters such representations, warranties, agreements,
opinions, letters, certificates and covenants with respect to the Option Shares
as are required to be delivered on the Closing Date with respect to the Firm
Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
(a) The Company represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement (Registration No. 333-87945) on
Form S-3, including the related prospectus dated October 6, 1999 (the
"Basic Prospectus"), relating to the registration under the Securities
Act of 1933, as amended (the "1933 Act"), of certain shares of the
Company's Common Stock, including the Shares and certain other
securities to be sold from time to time by the Company in accordance
with Rule 415 of the rules and regulations under the 1933 Act (the
"1933 Act Rules and Regulations") has been filed with the Securities
and Exchange Commission (the "SEC") and declared effective by the SEC.
The Company meets the requirements for use of Form S-3 under the 1933
Act. Copies of such registration statement, including any amendments
thereto, the Basic Prospectus and the preliminary prospectus
supplement, dated October 12, 1999 (the "Preliminary Prospectus
Supplement"), and the exhibits, financial statements and schedules
thereto have heretofore been delivered by the Company to you. A final
prospectus supplement relating to the Shares, the terms of the offering
thereof and the other matters set forth therein has been prepared and
will be filed pursuant to Rule 424(b) of the 1933 Act Rules and
Regulations. Such final prospectus supplement, in the form first filed
after the date hereof pursuant to Rule 424(b), is herein referred to as
the "Prospectus Supplement." The registration statement, as amended at
the date hereof, including the exhibits thereto, is herein called the
"Registration Statement," and the Basic Prospectus included therein, as
supplemented by the Prospectus Supplement, is herein called the
"Prospectus;" provided, however, that if such Prospectus is amended or
supplemented on or after the date hereof but prior to the date on which
the Prospectus Supplement is first filed pursuant to Rule 424(b), the
term "Prospectus" shall refer to such Prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement; and
provided, further, that all references to the "Registration Statement"
and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"). If an
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abbreviated registration statement is prepared and filed with the SEC
in accordance with Rule 462(b) under the 1933 Act (an "Abbreviated
Registration Statement"), the term "Registration Statement" as used in
this Agreement includes the Abbreviated Registration Statement. For
purposes of this Agreement, the words "amend," "amendment," "amended,"
"supplement" or "supplemented" with respect to the Registration
Statement or the Prospectus shall mean amendments or supplements to the
Registration Statement or the Prospectus, as the case may be; as well
as documents filed after the date of this Agreement and prior to the
completion of the distribution of the Shares and incorporated by
reference therein as described above.
(ii) Neither the SEC nor any state or other jurisdiction or
other regulatory body has issued, and neither is, to the knowledge of
the Company, threatening to issue, any stop order under the 1933 Act or
other order suspending the effectiveness of the Registration Statement
(as amended or supplemented) or preventing or suspending the use of the
Prospectus or suspending the qualification or registration of the
Shares for offering or sale in any jurisdiction nor instituted or, to
the knowledge of the Company, threatened to institute proceedings for
any such purpose. The Registration Statement, the Preliminary
Prospectus Supplement and the Prospectus and any amendments or
supplements thereto contain or will contain, as the case may be, all
statements which are required to be stated therein by, and in all
material respects conform or will conform, as the case may be, to the
requirements of, the 1933 Act and the 1933 Act Rules and Regulations.
Neither the Registration Statement nor any amendment thereto, as of the
applicable effective date, contains or will contain, as the case may
be, 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, and neither the
Preliminary Prospectus Supplement or the Prospectus, nor any supplement
thereto contains or will contain, as the case may be, 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, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted
from the Registration Statement, the Preliminary Prospectus Supplement
or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information relating to the
Underwriters furnished to the Company by the Representatives or on
behalf of the Underwriters expressly for use in the preparation thereof
(as provided in Section 13 hereof). There is no contract or document
required to be described in the Registration Statement or Prospectus or
to be filed as an exhibit to the Registration Statement which is not
described or filed as required. The documents incorporated by reference
in the Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act,
at the time they were filed with the SEC, complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations adopted by the SEC thereunder (the "1934 Act Rules and
Regulations"). Any future documents incorporated by reference so filed,
when they are filed, will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Rules and Regulations; no
such incorporated document contained or will contain any untrue
statement of a material fact
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or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and, when read
together and with the other information in the Prospectus, at the time
the Registration Statement became effective and at the Closing Date,
each such incorporated document did not or will not, as the case may
be, 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.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
by general principles of equity (the "Exceptions").
(iv) The Company and its subsidiaries have been duly organized and
are validly existing as corporations in good standing under the laws of
the states or other jurisdictions in which they are incorporated. CN
Resources ("CN") is the only partnership of which the Company or any of
its subsidiaries is a general partner or owns fifty percent or more of
the partnership interests. CN is a general partnership duly organized
under the laws of the State of Texas, and the Company owns all of the
partnership interests in CN. Each of the Company, its subsidiaries and
CN has full power and authority (corporate and other) to own, lease and
operate their properties and conduct their businesses as described in
the Prospectus and, with respect to the Company, to execute and
deliver, and perform the Company's obligations under, this Agreement;
each of the Company, its subsidiaries and CN is duly qualified to do
business as a foreign corporation or partnership in good standing in
each state or other jurisdiction in which their ownership or leasing of
property or conduct of business legally requires such qualification,
except where the failure to be so qualified, individually or in the
aggregate, would not have a Material Adverse Effect. The term "Material
Adverse Effect" as used herein means any material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company, its subsidiaries and CN that is
or would be, singly or in the aggregate, material to the Company, its
subsidiaries and CN, taken as a whole, whether or not occurring in the
ordinary course of business.
(v) None of the Company, its subsidiaries or CN has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree. Otherwise
than as set forth in the Prospectus and, since the respective dates as
of which information is given in the Prospectus, there has not been any
change in the capital stock or material increase in the short-term or
long-term debt of the Company, its subsidiaries or CN or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, debt, stockholders' equity or results of operations
of the Company, its subsidiaries and CN, taken as a whole, otherwise
than as set forth in the Prospectus.
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(vi) The issuance and sale of the Shares and the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions herein contemplated, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company, its subsidiaries or CN under any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, any of its subsidiaries or CN is a
party or by which the Company, any of its subsidiaries or CN is bound
or to which any of the properties or assets of the Company, any of its
subsidiaries or CN is subject, except to such extent as, individually
or in the aggregate, does not have a Material Adverse Effect, nor will
such action result in any violation of the provisions of the Company's
certificate of incorporation or bylaws or any statute, rule, regulation
or other law, or any order or judgment, of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or CN or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the issuance and
sale of the Shares or the consummation of the transactions contemplated
hereby, except such as have been, or will be prior to the Closing Date,
obtained under the 1933 Act or as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(vii) The Company has duly and validly authorized capital stock as
set forth in the Prospectus; all outstanding shares of Common Stock and
$2.125 Convertible Exchangeable Preferred Stock, Series A (the "Series
A Preferred Stock") of the Company and the Shares conform, or when
issued will conform, to the descriptions thereof in the Prospectus and
have been, or, when issued and paid for in the manner described herein
will be, duly authorized, validly issued, fully paid and
non-assessable; and the issuance of the Shares to be purchased from the
Company hereunder is not subject to preemptive or other similar rights,
or any restriction upon the voting or transfer thereof pursuant to
applicable law or the Company's certificate of incorporation, by-laws
or governing documents or any agreement to which the Company, any of
its subsidiaries or CN is a party or by which any of them may be bound.
All corporate action required to be taken by the Company for the
authorization, issuance and sale of the Shares has been duly and
validly taken. Except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise to acquire any shares of,
or any security convertible into or exchangeable or exercisable for,
the capital stock of, or other ownership interest in, the Company. The
outstanding shares of capital stock of the Company's subsidiaries and
interests in CN have been duly authorized
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and validly issued, are fully paid and non-assessable and are owned by
the Company free and clear of any mortgage, pledge, lien, encumbrance,
charge or adverse claim and are not the subject of any agreement or
understanding with any person and were not issued in violation of any
preemptive or similar rights; and there are no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or instruments related to or entitling
any person to purchase or otherwise acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the
capital stock of, or other ownership interest in any of the
subsidiaries or CN.
(viii) The statements set forth in the Prospectus describing the
Shares and this Agreement, insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(ix) Each of the Company, its subsidiaries and CN is in possession
of and is operating in compliance with all franchises, grants,
authorizations, licenses, certificates, permits, easements, consents,
orders and approvals ("Permits") from all state, federal, foreign and
other regulatory authorities, and has satisfied the requirements
imposed by regulatory bodies, administrative agencies or other
governmental bodies, agencies or officials, that are required for the
Company, its subsidiaries and CN lawfully to own, lease and operate
their properties and conduct their businesses as described in the
Prospectus, and, each of the Company, its subsidiaries and CN is
conducting its business in compliance with all of the laws, rules and
regulations of each jurisdiction in which it conducts its business, in
each case with such exceptions, individually or in the aggregate, as
would not have a Material Adverse Effect; each of the Company, its
subsidiaries and CN has filed all notices, reports, documents or other
information ("Notices") required to be filed under applicable laws,
rules and regulations, in each case, with such exceptions, individually
or in the aggregate, as would not have a Material Adverse Effect; and,
except as otherwise specifically described in the Prospectus, none of
the Company, its subsidiaries or CN has received any notification from
any court or governmental body, authority or agency, relating to the
revocation or modification of any such Permit or, to the effect that
any additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification ("Approvals") from
such regulatory authority is needed to be obtained by any of them, in
any case where it could be reasonably expected that such revocation or
modification or that obtaining such Approvals or the failure to obtain
such Approvals, individually or in the aggregate, would have a Material
Adverse Effect.
(x) The Company, its subsidiaries and CN have filed all necessary
federal, state and foreign income and franchise tax returns and paid
all taxes shown as due thereon; all such tax returns are complete and
correct in all material respects; all tax liabilities are adequately
provided for on the books of the Company, its subsidiaries and CN
except to such extent as would not have a Material Adverse Effect; the
Company, its subsidiaries and CN have timely made all necessary payroll
tax payments and are current and up-to-date; and the Company, its
subsidiaries and CN have no knowledge of any tax proceeding or action
pending or threatened against the Company, its subsidiaries or CN
which, individually or in the aggregate, might have a Material Adverse
Effect.
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(xi) Except as described in the Prospectus, the Company, its
subsidiaries and CN own or possess, or can acquire on reasonable terms,
or are licensed or otherwise have the full exclusive right to use,
adequate patents, patent licenses, trademarks, service marks and trade
names necessary to conduct the business now operated by them, and none
of the Company, its subsidiaries or CN has received any notice of
infringement of or conflict with asserted rights of others with respect
to any patents, patent licenses, trademarks, service marks or trade
names which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(xii) The Company, its subsidiaries and CN have good and
marketable title to all items of real property and good title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances, restrictions and defects except such as are
described in the Prospectus or do not materially affect the value of
such property and do not interfere with the use made and proposed to be
made of such property; and any property held under lease or sublease by
the Company, its subsidiaries or CN is held under valid, subsisting and
enforceable leases or subleases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property by the Company, its subsidiaries or CN.
(xiii) Except as described in the Prospectus, there is no factual
basis for any action, suit or other proceeding involving the Company,
any of its subsidiaries or CN or any of their material assets for any
failure of the Company, any of its subsidiaries or CN, or any
predecessor thereof, to comply with any requirements of federal, state
or local regulation relating to air, water, solid waste management,
hazardous or toxic substances, or the protection of health or the
environment, which might, individually or in the aggregate, result in a
Material Adverse Effect. Except as described in the Prospectus, none of
the property owned or leased by the Company, any of its subsidiaries or
CN is, to the best knowledge of the Company, contaminated with any
waste or hazardous substances, which might, individually or in the
aggregate, result in a Material Adverse Effect, and none of the
Company, its subsidiaries or CN may be deemed an "owner or operator" of
a "facility" or "vessel" which owns, possesses, transports, generates
or disposes of a "hazardous substance" as those terms are defined in
ss.9601 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss.9601 et seq.
(xiv) No labor disturbance exists with the employees of the
Company, any of its subsidiaries or CN or is imminent which,
individually or in the aggregate, would have a Material Adverse Effect.
None of the employees of the Company, any of its subsidiaries or CN is
represented by a union and, to the best knowledge of the Company, its
subsidiaries and CN, no union organizing activities are taking place.
None of the Company, its subsidiaries or CN has violated any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, nor any applicable wage or hour laws, or
the rules and regulations thereunder, or analogous foreign laws and
regulations, which might, individually or in the aggregate, result in a
Material Adverse Effect.
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(xv) The Company, its subsidiaries and CN are in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company, its
subsidiaries or CN would have any liability; none of the Company, its
subsidiaries or CN has incurred and none expects to incur liability
under (a) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (b) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company, any of its subsidiaries or CN
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects, and
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xvi) The Company, its subsidiaries and CN maintain insurance of
the types and in the amounts generally deemed adequate for their
businesses. None of the Company, its subsidiaries or CN has been
refused any insurance coverage sought or applied for, and the Company
has no reason to believe that it, its subsidiaries or CN will not be
able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue their businesses at a cost that would not
have a Material Adverse Effect.
(xvii) None of the Company, its subsidiaries or CN is, or with the
giving of notice or lapse of time or both would be, in default or
violation with respect to its certificate of incorporation or bylaws or
other governing documents. None of the Company, its subsidiaries or CN
is, or with the giving of notice or lapse of time or both would be, in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which the Company, any of its subsidiaries or CN is a party or by
which the Company, any of its subsidiaries or CN is bound or to which
any of the properties or assets of the Company, any of its subsidiaries
or CN is subject, or in violation of any statutes, laws, ordinances or
governmental rules or regulations or any orders or decrees to which it
is subject, including, without limitation, Section 13 of the 1934 Act,
which default or violation, individually or in the aggregate, would
have a Material Adverse Effect. None of the Company, its subsidiaries
or CN has, at any time during the past five years, (a) made any
unlawful contributions to any candidate for any political office, or
failed fully to disclose any contribution in violation of law, or (b)
made any payment to any state, federal or foreign government official,
or other person charged with similar public or quasi-public duty (other
than payment required or permitted by applicable law).
(xviii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company, any of
its subsidiaries or CN is a party or of which any property of the
Company, any of its subsidiaries or CN is the subject that, if
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determined adversely to the Company, any of its subsidiaries or CN,
would individually or in the aggregate, have a Material Adverse Effect
or which would materially and adversely affect the consummation of the
transactions contemplated hereby or which is required to be disclosed
in the Prospectus; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated.
(xix) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended
(the "1935 Act").
(xx) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be 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 (the "1940
Act").
(xxi) Xxxxxx Xxxxxxxx LLP, the accounting firm which has certified
the financial statements filed with or incorporated by reference in and
as a part of the Registration Statement, is an independent public
accounting firm within the meaning of the 1933 Act and the 1933 Act
Rules and Regulations. The Company, each of its subsidiaries and CN
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (a) transactions are executed in accordance
with management's general or specific authorizations; (b) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (c) access to assets is permitted
only in accordance with management's general or specific authorization;
and (d) the recorded accounts for assets are compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto. The consolidated financial statements and schedules of
the Company, including the notes thereto, filed with (or incorporated
by reference) and as a part of the Registration Statement or
Prospectus, present fairly the financial condition of the Company, its
subsidiaries and CN as of the respective dates thereof and the
consolidated results of operations and changes in financial position
and consolidated statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments
necessary for a fair presentation of results for such periods have been
made. The selected financial data included or incorporated by reference
in the Registration Statement and Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements. Any operating or other
statistical data included or incorporated by reference in the
Registration Statement and Prospectus comply in all material respects
with the 1933 Act and the 1933 Act Rules and Regulations and present
fairly the information shown therein.
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(xxii) Except as disclosed in the Prospectus, no holder of any
security of the Company has any right to require registration of shares
of Common Stock or any other security of the Company because of the
filing of the Registration Statement or the consummation of the
transactions contemplated hereby that have not been waived, and, except
as disclosed in the Prospectus, no person has the right to require
registration under the 1933 Act of any shares of Common Stock or other
securities of the Company. No person has the right, contractual or
otherwise, to cause the Company to permit such person to underwrite the
sale of any of the Shares. Except for this Agreement, there are no
contracts, agreements or understandings between the Company, any of its
subsidiaries or CN and any person that would give rise to a valid claim
against the Company, any of its subsidiaries, CN or any Underwriter for
a brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Shares.
(xxiii) The Company has not distributed and, prior to the later to
occur of (a) the Closing Date or the Option Closing Date, if any, and
(b) completion of the distribution of the Shares, will not distribute
any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Preliminary
Prospectus Supplement or the Prospectus.
(xxiv) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Company's Common Stock, and the Company is not aware of
any such action taken or to be taken by affiliates of the Company.
(xxv) Subsequent to the date as of which information is given in
the Prospectus, except as set forth in the Prospectus, (a) none of the
Company, its subsidiaries or CN has incurred nor will it incur any
material liabilities or obligations, direct or contingent, nor has it
entered into nor will it enter into any material transactions other
than, in any case, pursuant to this Agreement and the transactions
referred to herein or in the ordinary course of business and (b) the
Company has not and will not have paid or declared any dividends or
other distributions of any kind on any class of its capital stock
(except for dividends at an annual rate of $2.125 per share with
respect to the Series A Preferred Stock).
(xxvi) All contracts described in the Prospectus and to which the
Company, any of its subsidiaries or CN is a party have been duly
authorized, executed and delivered by the Company, such subsidiaries or
CN, constitute valid and binding agreements of the Company, such
subsidiaries or CN and are enforceable against the Company, such
subsidiaries or CN in accordance with the terms thereof, except as may
be limited by the Exceptions.
(xxvii) The outstanding Common Stock and the Series A Preferred
Stock of the Company are duly authorized for trading on the New York
Stock Exchange.
(xxviii) The historical information underlying the estimates of
the reserves of the Company supplied by the Company to Xxxxxxxxxx &
Co., Inc., an independent petroleum
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12
and geological engineering firm (the "Petroleum Engineers"), for the
purposes of preparing the reserve reports of the Company referenced in
the Prospectus (the "Reserve Reports"), including, without limitation,
production volumes, sales prices for production, contractual pricing
provisions under oil or gas sales or marketing contracts or under
hedging arrangements, costs of operations and development, and working
interest and net revenue information relating to the Company's
ownership interests in properties, was true and correct in all material
respects on the date of such Reserve Reports; the estimates of future
capital expenditures and other future exploration and development costs
supplied to the Petroleum Engineers were prepared in good faith and
with a reasonable basis; the information provided by the Petroleum
Engineers for purposes of preparing the Reserve Reports was prepared in
accordance with customary industry practices; to the best of the
Company's knowledge, the Petroleum Engineers were, as of the date of
the Reserve Reports prepared by them, and are, as of the date hereof,
independent petroleum and geological engineers with respect to the
Company; other than normal production of reserves and intervening spot
market product price fluctuations, and except as disclosed in the
Registration Statement and the Prospectus, the Company is not aware of
any facts or circumstances that would result in a materially adverse
change in the reserves in the aggregate, or the aggregate present value
of future net cash flows therefrom, as described in the Prospectus and
as reflected in the Reserve Reports; and estimates of such reserves and
the present value of the future net cash flows therefrom as described
in the Prospectus and reflected in the Reserve Reports comply in all
material respects to the applicable requirements of the 1933 Act Rules
and Regulations.
(xxix) Except as described in the Prospectus, as of the date
hereof, (a) all royalties, rentals, deposits and other amounts due on
the oil and gas properties of the Company have been properly and timely
paid, and no proceeds from the sale or production attributable to the
oil and gas properties of the Company are currently being held in
suspense by any purchaser thereof, except where such amounts due could
not, singly or in the aggregate, have a Material Adverse Effect on the
Company, its subsidiaries and CN taken as a whole, and (b) there are no
claims under take-or-pay contracts pursuant to which natural gas
purchasers have any make-up rights affecting the interests of the
Company in its oil and gas properties, except where such claims could
not, singly or in the aggregate, have a Material Adverse Effect on the
Company, its subsidiaries and CN taken as a whole.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
5. ADDITIONAL COVENANTS. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, as applicable, to the SEC for filing pursuant
to Rule 424(b) of the 1933 Act Rules and Regulations.
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13
(b) The Company will deliver to each of the Representatives, and to
counsel for the Underwriters (i) one signed and two conformed copies of the
Registration Statement as originally filed, including copies of exhibits thereto
(other than any exhibits incorporated by reference therein), of any amendments
and supplements to the Registration Statement (including all documents
incorporated by reference therein) and (ii) a signed copy of each consent and
certificate included or incorporated by reference in, or filed as an exhibit to,
the Registration Statement as so amended or supplemented; the Company will
deliver to the Underwriters through the Representatives as soon as practicable
after the date of this Agreement as many copies of the Prospectus (including all
documents incorporated by reference therein) as the Representatives may
reasonably request for the purposes contemplated by the 1933 Act; the Company
will promptly advise the Representatives of any request of the SEC for amendment
of the Registration Statement or for supplement to the Prospectus or for any
additional information, and of the issuance by the SEC or any state or other
jurisdiction or other regulatory body of any stop order under the 1933 Act or
other order suspending the effectiveness of the Registration Statement (as
amended or supplemented) or preventing or suspending the use of any Prospectus
or suspending the qualification or registration of the Shares for offering or
sale in any jurisdiction, and of the institution or threat of any proceedings
therefor, of which the Company shall have received notice or otherwise have
knowledge prior to the completion of the distribution of the Shares; and the
Company will use its best efforts to prevent the issuance of any such stop order
or other order and, if issued, to secure the prompt removal thereof.
(c) The Company will not file any amendment or supplement to the
Registration Statement or the Prospectus and will not file any document under
the 1934 Act before the termination of the offering of the Shares by the
Underwriters if the document would be deemed to be incorporated by reference
into the Registration Statement or the Prospectus, of which the Underwriters
shall not previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected or which is not in compliance with
the 1933 Act Rules and Regulations; and the Company will promptly notify you
after it shall have received notice thereof of the time when any amendment to
the Registration Statement becomes effective or when any supplement to the
Prospectus has been filed.
(d) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will comply, at its own expense, with all requirements imposed by the
1933 Act and the 1933 Act Rules and Regulations, as now and hereafter amended,
and by the rules and regulations of the SEC thereunder, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealing in
the Shares during such period in accordance with the provisions hereof and as
contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the
Shares is required to be delivered under the 1933 Act by any Underwriter or
dealer, (i) any event relating to or affecting the Company or of which the
Company shall be advised in writing by the Representatives shall occur as a
result of which, in the opinion of the Company or the Representatives, the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state a
- 13 -
14
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (ii) it shall be
necessary to amend or supplement the Registration Statement or the Prospectus to
comply with the 1933 Act, the 1933 Act Rules and Regulations, the 1934 Act or
the 1934 Act Rules and Regulations, the Company will forthwith at its expense
prepare and file with the SEC, and furnish to the Representatives a reasonable
number of copies of, such amendment or supplement or other filing that will
correct such statement or omission or effect such compliance.
(f) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will furnish such proper information as may be lawfully required and
otherwise cooperate in qualifying the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representatives may
reasonably designate and will file and make in each year such statements or
reports as are or may be reasonably required by the laws of such jurisdictions;
provided, however, that the Company shall not be required to qualify as a
foreign corporation or to qualify as a dealer in securities or to file a general
consent to service of process under the laws of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Company will make generally available to
its security holders and to holders of the Shares, as soon as practicable, an
earning statement (which need not be audited) in reasonable detail covering the
12 months beginning not later than the first day of the month next succeeding
the month in which occurred the effective date (within the meaning of Rule 158)
of the Registration Statement.
(h) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will file promptly all documents required to be filed with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. The Company will
furnish to its security holders annual reports containing financial statements
audited by independent public accountants and quarterly reports containing
financial statements and financial information which may be unaudited. The
Company will, for a period of five years from the Closing Date, deliver to the
Underwriters at their principal executive offices a reasonable number of copies
of annual reports, quarterly reports, current reports and copies of all other
documents, reports and information furnished by the Company to its shareholders
or filed with any securities exchange or market pursuant to the requirements of
such exchange or market or with the SEC pursuant to the 1933 Act or the 1934
Act. The Company will deliver to the Underwriters similar reports with respect
to any significant subsidiaries, as that term is defined in the 1933 Act Rules
and Regulations, which are not consolidated in the Company's financial
statements. Any report, document or other information required to be furnished
under this paragraph (h) shall be furnished as soon as practicable after such
report, document or information becomes available.
(i) The Company will apply the proceeds from the sale of the Shares as
set forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of Item 504 of
Regulation S-K.
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15
(j) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Shares under the 1933 Act or relating to
any documents incorporated by reference into the Registration Statement or the
Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
(l) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will not issue any press releases or other communications
directly or indirectly and will hold no press conferences with respect to the
Company, any of its subsidiaries or CN, the financial condition, results of
operations, business, properties, assets or liabilities of the Company, any of
its subsidiaries or CN, or the offering of the Shares, without your prior
written consent.
(m) The Company will use its best efforts to obtain approval for, and
maintain the listing of the Shares on, the New York Stock Exchange.
(n) The Company will, and will cause its directors and executive
officers and Xxxx. Xxxxx Energy ASA to, furnish to you, on or prior to the date
of this Agreement, a letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such person shall agree not
to, directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of Common Stock, or any securities convertible into, or
exercisable or exchangeable for or repayable with Common Stock, for a period of
90 days after the date of the Prospectus, without the prior written consent of
X.X. Xxxxxxx & Sons, Inc.; provided, that (a) Common Stock or securities
convertible or exercisable into Common Stock may be transferred as bona fide
gifts by a stockholder to certain of its family members or trusts controlled by
such stockholder who agree prior to such transfer to be bound by a similar
lock-up agreement, (b) the foregoing shall not prevent a stockholder from
tendering Common Stock into a bona fide third-party tender offer open to all
holders of Common Stock at any time, (c) a stockholder may exchange Common Stock
owned by such stockholder to exercise stock options of the Company issued in
connection with employment or Company employee or director incentive plans
(resales of Common Stock received upon exercise of options is, however,
prohibited during the lock-up period) and (d) the Company can issue Common Stock
to optionholders pursuant to the exercise of stock options of the Company issued
in connection with employment or Company employee or director incentive plans
and can issue Common Stock to holders of Series A Preferred Stock upon
conversion of such Series A Preferred Stock; provided, however, the Company will
not mandatorily redeem the Series A Preferred Stock during the lock-up period
without the prior written consent of X.X. Xxxxxxx & Xxxx, Xxx.
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00
(x) The Company, its subsidiaries and CN will maintain and keep
accurate books and records reflecting their assets and maintain internal
accounting controls which provide reasonable assurance that (1) transactions are
executed in accordance with management's authorization, (2) transactions are
recorded as necessary to permit the preparation of the Company's consolidated
financial statements and to maintain accountability for the assets of the
Company, its subsidiaries and CN, (3) access to the assets of the Company, its
subsidiaries or CN is permitted only in accordance with management's
authorization and (4) the recorded accounts of the assets of the Company, its
subsidiaries and CN are compared with existing assets at reasonable intervals.
(p) If the Company elects to rely on Rule 462(b) under the 1933 Act,
the Company shall both file an Abbreviated Registration Statement with the SEC
in compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act by the earlier of (i) 10:00 p.m., New York time, on the
date of this Agreement and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to the accuracy, as of the date hereof and as of the Closing Date
(and, if applicable, the Option Closing Date), of the representations and
warranties of the Company contained herein, to the performance by the Company of
its covenants and obligations hereunder and to the following additional
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceeding for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened or contemplated by the SEC, and any
request of the SEC for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Company on or prior to the
Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date),
you shall have received the opinion of Xxxxxx & Xxxxx, LLP, counsel for the
Company, addressed to you and dated the Closing Date (and, if applicable, the
Option Closing Date), to the effect that:
(i) The Registration Statement and all post-effective amendments
thereto and the Abbreviated Registration Statement, if any, have become
effective under the 1933 Act; any required filing of the Prospectus or
any supplement thereto pursuant to Rule 424(b) or otherwise has been
made in the manner and within the time period required thereby; and, to
the knowledge of such counsel after due inquiry, no stop or other order
suspending the
- 16 -
17
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act or under the securities laws of any
jurisdiction.
(ii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (including any document incorporated by
reference into the Registration Statement), as of their respective
effective or issue date, comply as to form and appear on their face to
be appropriately responsive in all material respects to the
requirements of Form S-3 under the 1933 Act and the applicable 1933 Act
Rules and Regulations (except that such counsel need express no opinion
as to the financial statements, the schedules, reserve information and
other financial and statistical data included in the Registration
Statement or in the Prospectus or in any document incorporated by
reference therein); the conditions for use of Form S-3 have been
satisfied; and, as of the date they were filed with the SEC, the
documents incorporated by reference in the Registration Statement
appear on their face to comply as to form and be appropriately
responsive in all material respects with the requirements of the 1934
Act and the applicable 1934 Act Rules and Regulations (except that such
counsel need express no opinion as to the financial statements, the
schedules, reserve information and other financial and statistical data
included in the Registration Statement or in the Prospectus or in any
document incorporated by reference therein).
(iii) To the extent summarized therein, all contracts and
agreements summarized in the Registration Statement and the Prospectus
are fairly summarized therein, conform in all material respects to the
descriptions thereof contained therein, and, to the extent such
contracts or agreements or any other material agreements are required
under the 1933 Act, or the 1933 Act Rules and Regulations, to be filed,
as exhibits to the Registration Statement, they are so filed; and such
counsel does not know of any contracts or other documents required to
be summarized or disclosed in the Prospectus or to be so filed as
exhibits to the Registration Statement that have not been so
summarized, disclosed or so filed.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Company and its subsidiaries have been duly incorporated
and are validly existing as corporations in good standing under the
laws of the states or other jurisdictions in which they are
incorporated. CN is the only partnership of which the Company or any of
its subsidiaries is a general partner or owns fifty percent or more of
the partnership interests. CN is a general partnership duly organized
under the laws of the State of Texas, and the Company owns all of the
partnership interests in CN. Each of the Company, its subsidiaries and
CN has full corporate power and authority to own, lease and operate
their properties and conduct their businesses as described in the
Prospectus and, with respect to the Company, to execute and deliver,
and perform the Company's obligations under, this Agreement; each of
the Company, its subsidiaries and CN is duly qualified to do business
as a foreign corporation or partnership in good standing in each state
or other jurisdiction in which their
- 17 -
18
ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, would not have a Material
Adverse Effect.
(vi) The Company is the sole record owner, directly or indirectly,
of all of the outstanding capital stock of each of its subsidiaries.
(vii) The issuance and sale of the Shares and the execution,
delivery and performance by the Company of this Agreement, and the
consummation of the transactions herein contemplated, will not conflict
with or constitute a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company, its subsidiaries or CN under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel after due inquiry to which the
Company, any of its subsidiaries or CN is a party or by which the
Company, any of its subsidiaries or CN is bound or to which any of the
properties or assets of the Company, any of its subsidiaries or CN is
subject, except to such extent as, individually or in the aggregate,
does not have a Material Adverse Effect, nor will such action result in
any violation of the provisions of the Company's certificate of
incorporation or bylaws or any statute, rule, regulation or other law,
or any order or judgment known to such counsel after due inquiry, of
any court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or CN or any of their properties.
(viii) No consent, approval, authorization, order, registration or
qualification of, or with, any court or governmental agency or body is
required in connection with the execution, delivery and performance of
this Agreement, and the issuance and sale of the Shares or the
consummation of the transactions contemplated hereby, except such as
may be required under the 1933 Act or the 1933 Act Rules and
Regulations and have been obtained, or as may be required by the NASD
or under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(ix) To the knowledge of such counsel after due inquiry, (A) there
are no material (individually, or in the aggregate) legal, governmental
or regulatory proceedings pending or threatened to which the Company,
any of its subsidiaries or CN is a party or of which the business or
properties of the Company, any of its subsidiaries or CN is the subject
which are not disclosed in the Registration Statement and Prospectus;
(B) there are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not
described or filed as required; and (C) there are no statutes,
ordinances, laws, rules or regulations required to be described in the
Registration Statement or Prospectus which are not described as
required.
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19
(x) The Company has duly and validly authorized capital stock as
set forth under the caption "Capitalization" in the Prospectus; all
outstanding shares of Common Stock of the Company and the Shares
conform, or when issued will conform, as to legal matters to the
description thereof in the Prospectus and the outstanding shares of
Common Stock of the Company have been duly authorized, validly issued
and are fully paid and non-assessable; and the Shares to be sold by the
Company have been duly authorized and, when delivered and paid for in
accordance with this Agreement, will be validly issued, fully paid and
non-assessable. All corporate action required to be taken by the
Company for the authorization, issue and sale of the Shares has been
duly and validly taken. The Shares are duly authorized for trading,
subject to official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange. The form of specimen
certificate representing the Shares filed as an exhibit to the
Registration Statement is in valid and sufficient form. The issuance of
the Shares to be purchased from the Company hereunder is not subject to
preemptive or other similar rights, or any restriction upon the voting
or transfer thereof pursuant to applicable law or the certificate of
incorporation, bylaws or governing documents of the Company or any
agreement to which the Company, any of its subsidiaries or CN is a
party or by which any of them may be bound; and, to such counsel's
knowledge, except as described in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise acquire any shares of, or
any security convertible into or exercisable or exchangeable for, the
capital stock of, or other ownership interest in, the Company.
(xi) The statements made in the Prospectus under the captions
"Risk Factors," "Price Range of Common Stock and Dividend Policy,"
"Business and Properties," "Description of Capital Stock," "Description
of Bank Credit Facility and Other Indebtedness," in Item 15 of Part II
of the Registration Statement and in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 under Item 11,
"Executive Compensation" and Item 13, "Certain Relationships and
Related Transactions," to the extent that they constitute summaries of
documents referred to therein or matters of law or legal conclusions,
have been reviewed by such counsel and are accurate summaries and
fairly present the information disclosed therein.
(xii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company," as such terms are
defined in the 0000 Xxx.
(xiii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
(xiv) To the knowledge of such counsel after due inquiry and
except as disclosed in the Prospectus, no holder of any security of the
Company has any right to require
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20
registration of shares of Common Stock or any other security of the
Company because of the filing of the Registration Statement or the
consummation of the transactions contemplated hereby that have not been
waived, and, except as disclosed in the Prospectus, no person has the
right to require registration under the 1933 Act of any shares of
Common Stock or other securities of the Company.
Such counsel shall confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in
conferences with the Representatives and their counsel and with
officers and representatives of the Company and its independent
accountants, at which conferences the contents of the Registration
Statement and the Prospectus (including all documents filed under the
1934 Act and deemed incorporated by reference therein) were discussed,
reviewed and revised. On the basis of the information which was
developed in the course thereof, considered in light of such counsel's
understanding of applicable law and the experience gained by such
counsel through their practice thereunder, without such counsel
assuming responsibility for the accuracy and completeness of such
statements except to the extent expressly provided above, such counsel
shall confirm that nothing came to their attention that would lead them
to believe that either the Registration Statement (including any
document filed under the 1934 Act and deemed incorporated by reference
therein), as of the date it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or the Prospectus or any amendment or
supplement thereto (including any document filed under the 1934 Act and
deemed incorporated by reference therein) as of its respective issue
date and as of the Closing Date, or, if applicable, the Option Closing
Date, contained or contains any untrue statement of a material fact or
omitted or omits 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. Such counsel
may state that they are not giving advice as to the financial
statements, schedules, reserve information and other financial and
statistical data included in the Registration Statement or in the
Prospectus or in any document incorporated by reference therein.
In rendering the foregoing opinion, such counsel may rely, (1) as to
matters involving laws of any jurisdiction other than Texas, Delaware, New York
or the United States, upon opinions addressed to the Underwriters of other
counsel satisfactory to them and Xxxxxx & Xxxxxx L.L.P. and (2) as to all
matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company, provided, in either case, that
such counsel shall state in their opinion that they and the Underwriters are
justified in relying thereon.
(d) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date), from Xxxxxx & Xxxxxx L.L.P., counsel to the
Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to such matters as you may
reasonably require; and the Company shall have furnished to such counsel such
documents as they reasonably request for the purposes of enabling them to review
or pass on the matters referred
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21
to in this Section 6 and in order to evidence the accuracy, completeness and
satisfaction of the representations, warranties and conditions herein contained.
(e) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing Date),
you shall have received from Xxxxxx Xxxxxxxx LLP, a letter or letters, dated the
date of this Agreement and the Closing Date (and, if applicable, the Option
Closing Date), respectively, in form and substance satisfactory to you,
confirming that they are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the published Rules and
Regulations, to the effect set forth in Schedule II hereto.
(f) Except as contemplated in the Prospectus, (i) none of the Company,
its subsidiaries or CN shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree and (ii) subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, none of the Company, its subsidiaries or CN shall have
incurred any liability or obligation, direct or contingent, or entered into any
transactions, and there shall not have been any change in the capital stock or
material increase in the short-term or long-term debt of the Company, its
subsidiaries or CN or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, prospects,
results of operations or cash flow of the Company, its subsidiaries or CN, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material or adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
on such Closing Date (and, if applicable, the Option Closing Date) on the terms
and in the manner contemplated in the Prospectus.
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or The Nasdaq National Market
or the establishing on such exchanges or market by the SEC or by such exchanges
or market of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange or the establishing on such
exchange by the SEC or by such exchange of minimum or maximum prices which are
not in force and effect on the date hereof; (iii) a general moratorium on
commercial banking activities declared by either federal or any state
authorities; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war,
which in your judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares in the manner contemplated in the
Prospectus; or (v) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets, or
change in the existing financial, political or economic conditions in the United
States or elsewhere, which in your judgment
- 21 -
22
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares in the manner contemplated in the Prospectus.
(h) You shall have received certificates, dated the Closing Date (and,
if applicable, the Option Closing Date) and signed by the President and the
Chief Financial Officer of the Company, in their capacities as such, stating
that:
(i) the condition set forth in Section 6(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement and
the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or any amendment or supplement thereto or
any documents incorporated by reference therein as of their respective
effective, issue or filing dates, contained, and the Prospectus as
amended or supplemented and all documents incorporated by reference
therein and when read together with the documents incorporated by
reference therein, at such Closing Date, contains any untrue statement
of a material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(iii) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has
not been so set forth and there has been no document required to be
filed under the 1934 Act and the 1934 Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed;
(iv) all representations and warranties made herein by the Company
are true and correct at such Closing Date, with the same effect as if
made on and as of such Closing Date, and all agreements herein to be
performed or complied with by the Company on or prior to such Closing
Date have been duly performed and complied with by the Company;
(v) none of the Company, its subsidiaries or CN has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree;
(vi) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, none of the Company, its subsidiaries or
CN has incurred any liabilities or obligations, direct or contingent,
other than in the ordinary course of business, or entered into any
transactions not
- 22 -
23
in the ordinary course of business, which in either case are material
to the Company, such subsidiary or CN; and there has not been any
change in the capital stock or material increase in the short-term debt
or long-term debt of the Company, any of its subsidiaries or CN, or any
material adverse change or any development involving or which may
reasonably be expected to involve a prospective material adverse
change, in the condition (financial or other), net worth, business,
affairs, management, prospects, results of operations or cash flow of
the Company, its subsidiaries or CN, taken as a whole; and there has
been no dividend or distribution of any kind, paid or made by the
Company on any class of its capital stock (except for dividends at an
annual rate of $2.125 per share with respect to the Series A Preferred
Stock); and
(vii) covering such other matters as you may reasonably request.
(j) The Shares shall have been approved for trading upon official
notice of issuance on the New York Stock Exchange.
(k) You shall have received duly and validly executed letter agreements
referred to in Section 5(n) hereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to Xxxxxx & Xxxxxx L.L.P., counsel for the several
Underwriters. The Company will furnish you with such signed and conformed copies
of such opinions, certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each Underwriter for and against any losses, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, damages or liabilities
(or actions or claims in respect thereof) arise out of or are based upon (i) an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Preliminary Prospectus Supplement or the Prospectus,
or any amendment or supplement thereto, or (ii) 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 incurred by such Underwriter in connection with
investigating, preparing, pursuing or defending against or appearing as a third
party witness in connection with any such loss, damage, liability or action or
claim, including, without limitation, any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to the indemnified party, as such expenses are
incurred (including such losses, damages, liabilities or expenses to the extent
of the aggregate amount paid in settlement of any such action or claim, provided
that (subject to Section 7(c) hereof)
- 23 -
24
any such settlement is effected with the written consent of the Company);
provided, however, that the Company shall not be liable in any such case to the
extent, but only to the extent, that any such loss, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the Preliminary
Prospectus Supplement or the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information relating to the
Underwriters furnished to the Company by you or by any Underwriter through you,
expressly for use in the preparation thereof (as provided in Section 13 hereof).
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company for and against any losses, damages or liabilities to
which the Company may become subject, under the 1933 Act or otherwise, insofar
as such losses, damages or liabilities (or actions or claims in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the Preliminary
Prospectus Supplement or the Prospectus, or any amendment or supplement thereto,
or arise out of are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Preliminary
Prospectus Supplement or the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information relating to the
Underwriters furnished to the Company by you or by any Underwriter through you,
expressly for use in the preparation thereof (as provided in Section 13 hereof),
and will reimburse the Company for any legal or other expenses incurred by the
Company in connection with investigating, preparing, pursuing or defending
against any such loss, damage, liability or action or claim, including, without
limitation, any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to the indemnified party, as such expenses are incurred (including such losses,
damages, liabilities or expenses to the extent of the aggregate amount paid in
settlement of any such action or claim, provided that (subject to Section 7(c)
hereof) any such settlement is effected with the written consent of the
Underwriters).
(c) Promptly after receipt by an indemnified party under Section 7(a)
or 7(b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under Section 7(a) or 7(b) hereof, notify each such indemnifying party in
writing of the commencement thereof, but the failure so to notify such
indemnifying party shall not relieve such indemnifying party from any liability
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have to any such indemnified party
otherwise than under Section 7(a) or 7(b) hereof. In case any such action shall
be brought against any such indemnified party and it shall notify each
indemnifying party of the commencement thereof, each such indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party under Section 7(a) or 7(b) hereof
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of such
indemnified party, be counsel to
- 24 -
25
such indemnifying party), and, after notice from such indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under Section
7(a) or 7(b) hereof for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 7(a) or 7(b) hereof to reimburse
such indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a) or 7(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of such request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any such indemnified party.
In no event shall such indemnifying parties be liable for the fees and expenses
of more than one counsel, including any local counsel, for all such indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 7(a) or 7(b) hereof in respect of any losses, damages or
liabilities (or actions or claims in respect thereof) referred to therein, then
each indemnifying party under Section 7(a) or 7(b) hereof shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages or liabilities (or actions or claims in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the
- 25 -
26
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under Section 7(c) hereof and such indemnifying
party was prejudiced in a material respect by such failure, then each such
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault, as applicable, of the Company, on
the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions that resulted in such losses, damages or liabilities (or
actions or claims in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by, as applicable, the Company,
on the one hand, and the Underwriters, on the other hand, shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault, as
applicable, of the Company, on the one hand, and the Underwriters, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this Section 7(d). The amount paid or payable by such an indemnified
party as a result of the losses, damages or liabilities (or actions or claims in
respect thereof) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this Section 7(d) to
contribute are several in proportion to their respective underwriting
obligations with respect to the Shares and not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director, employee, agent
or other representative and to each person, if any, who controls any Underwriter
within the meaning of the 1933 Act; and the obligations of the Underwriters
under this Section 7 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company who signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the 1933 Act.
- 26 -
27
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the Company and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain operative and in full
force and effect regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter, any officer, director,
employee, agent or other representative or any controlling person of any
Underwriter, or the Company, any officer or director of the Company who signed
the Registration Statement or any controlling person of the Company, and shall
survive delivery of and payment for the Shares hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall default
in its obligation to purchase the Shares which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or parties
reasonably satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company
that you have so arranged for the purchase of such Shares, or the Company
notifies you that they have so arranged for the purchase of such Shares, you or
the Company shall have the right to postpone the Closing Date for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any persons substituted under this Section 9 with like effect as
if such person had originally been a party to this Agreement with respect to
such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you and the Company
as provided in subsection (a) above, the aggregate number of Shares which
remains unpurchased does not exceed one-eleventh of the total Shares to be sold
on the Closing Date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the Shares which such Underwriter agreed
to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you and the Company
as provided in subsection (a) above, the number of Shares which remains
unpurchased exceeds one-eleventh of the total Shares to be sold on the Closing
Date, or if the Company shall not exercise the right described in subsection (b)
above to require the non-defaulting Underwriters to purchase Shares of the
defaulting Underwriter or Underwriters, then this Agreement (or, with respect to
the Option Closing Date, the obligations of the Underwriters to purchase and of
the Company to sell the Option Shares) shall
- 27 -
28
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company except for the expenses to be borne by the Company
and the Underwriters as provided in Section 11 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. TERMINATION. (a) This Agreement may be terminated by you at any
time at or prior to the Closing Date by notice to the Company if any condition
specified in Section 6 hereof shall not have been satisfied on or prior to the
Closing Date. Any such termination shall be without liability of any party to
any other party except as provided in Sections 7 and 11 hereof.
(b) This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
if any condition specified in Section 6 hereof shall not have been satisfied at
or prior to the Option Closing Date or as provided in Section 9 of this
Agreement.
If you terminate this Agreement as provided in Sections 10(a) or 10(b),
you shall notify the Company by telephone or telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, will bear
and pay the costs and expenses incident to the registration of the Shares and
public offering thereof, including, without limitation, (a) all expenses
incurred in connection with the delivery to the several Underwriters of the
Shares, the filing fees of the SEC, the fees and expenses of the Company's
counsel and accountants, (b) all expenses incurred in connection with the
preparation, printing, filing, delivery and shipping of the Registration
Statement, the Preliminary Prospectus Supplement, the Prospectus and any
amendments or supplements thereto and the printing, delivery and shipping of
this Agreement and other underwriting documents, including the Agreement Among
Underwriters, the Selected Dealer Agreement and Underwriters' Questionnaires and
any instruments or documents related to any of the foregoing, (c) all expenses
incurred in connection with the furnishing of copies of such documents to the
Underwriters, (d) all expenses incurred in connection with the registration or
qualification of the Shares for offering and sale under the securities laws of
the various states and other jurisdictions, including the fees and disbursements
of counsel to the Underwriters relating to such registration or qualification,
(e) the filing fees of the NASD (if any) and fees and disbursements of counsel
to the Underwriters relating to any review of the offering by the NASD, (f) all
printing and engraving costs related to preparation of the certificates for the
Shares, including transfer agent and registrar fees, (g) all fees and expenses
relating to the authorization of the Shares for trading on the New York Stock
Exchange, (h) all travel expenses, including air fare and accommodation
expenses, of representatives of the Company in connection with the offering of
the Shares and (i) all of the other costs and expenses incident to the
performance by the Company of the registration and offering of the Shares.
- 28 -
29
If this Agreement is terminated by you in accordance with the
provisions of Section 10(a), the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the fees and disbursements of
counsel to the Underwriters.
12. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxx, Director, Corporate
Finance, facsimile number (000) 000-0000, or if sent to the Company shall be
mailed, delivered, sent by facsimile transmission, or telegraphed and confirmed
to the Company at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, facsimile
number (000) 000-0000. Notice to any Underwriter pursuant to Section 7 shall be
mailed, delivered, sent by facsimile transmission, or telegraphed and confirmed
to such Underwriter's address as it appears in the Underwriters' Questionnaire
furnished in connection with the offering of the Shares or as otherwise
furnished to the Company.
13. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in
the last sentence of the penultimate paragraph on the cover page of the
Prospectus and the tables and the third and tenth through fourteenth paragraphs
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters through you as such
information is referred to in Section 4(a)(ii) and Section 7 hereof.
14. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and, to the extent provided in
Sections 7 and 8, the officers and directors of the Company and each person who
controls the Company or any Underwriter and their respective heirs, executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person, corporation or other entity. No purchaser of any
of the Shares from any Underwriter shall be construed a successor or assign by
reason merely of such purchase.
In all dealings hereunder, you shall act on behalf of each of the
several Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of the Underwriters,
made or given by you jointly or by X.X. Xxxxxxx & Sons, Inc. on behalf of you as
the Representatives, as if the same shall have been made or given in writing by
the Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
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30
16. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
17. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
18. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
the choice of law or conflict of laws principles thereof.
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31
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company and the Underwriters.
XXXXXX PETROLEUM COMPANY
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date
hereof, on behalf of ourselves
and each of the several
Underwriters named in Schedule
I hereto.
X.X. XXXXXXX & SONS, INC.
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX INCORPORATED
XXXXXXX RICE & COMPANY L.L.C.
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the Several
Underwriters named on Schedule I hereto
By: X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxxxx Xxxx
----------------------------
Title: Vice President
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32
SCHEDULE I
NAME NUMBER OF SHARES
--------------------------------------------------------------- ----------------
X.X. Xxxxxxx & Sons, Inc....................................... 725,000
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated............... 725,000
Xxxxxxx Rice & Company L.L.C................................... 725,000
Xxxxxx Xxxxxx & Company, Inc................................... 725,000
Xxxx Xxxxxxxx Xxxxxxx.......................................... 150,000
McDonald Investments Inc. ..................................... 150,000
==========
Total........................................ 3,200,000
I-1
33
SCHEDULE II
Pursuant to Section 6(e) of the Underwriting Agreement, Xxxxxx Xxxxxxxx
LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the 1933 Act and the
applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included or incorporated by reference in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the applicable Rules and
Regulations with respect to registration statements on Form S-3; and, if
applicable, they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro forma
financial information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the Company
for the periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the Representatives of the Underwriters
(the "Representatives").
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of consolidated
financial position and statements of consolidated cash flows
included or incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting principles,
or the unaudited statements of consolidated income, statements of
consolidated financial position and statements of consolidated
cash flows included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements
of the 1933 Act and the related published Rules and Regulations
thereunder.
II-1
34
(B) any other unaudited income statement data and balance
sheet items included or incorporated by reference in the
Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Prospectus.
(C) the unaudited financial statements which were not included
or incorporated by reference in the Prospectus but from which were
derived any unaudited condensed financial statements referred to
in Clause (A) and any unaudited income statement data and balance
sheet items included in the Prospectus and referred to in Clause
(B) were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included or incorporated by reference in the Prospectus.
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated working capital, net current assets or
net assets, or any changes in any other items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or any
changes in any other items specified by the Representatives, in
each case as compared with the comparable period of the preceding
year and with any other period of corresponding length specified
by the Representatives, except in each case for changes, decreases
or increases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
II-2
35
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information specified
by the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries for the periods covered by their reports and
any interim or other periods since the latest period covered by their reports,
which appear or are incorporated by reference in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
II-3
