EXHIBIT 1.1
[__________] Shares of Common Stock
XXXXXX EXPLORATION COMPANY
UNDERWRITING AGREEMENT
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BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXX INC.
As Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
Xxxxxx Exploration Company, a corporation organized and existing under the
laws of Delaware (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of ____ shares of its common stock, par
value $.01 per share (the "Common Stock"), and the undersigned selling
stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose to sell to the Underwriters an additional __________
shares of Common Stock, which aggregate of __________ shares of Common Stock is
herein referred to as the "Firm Shares." In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, the
Company proposes to sell to the Underwriters, at the option of the Underwriters,
an aggregate of up to an additional _____ shares of Common Stock (the
"Additional Shares"). The respective amounts of the Firm Shares to be so
purchased by the Underwriters are set forth opposite their names in Schedule I
hereto. The number of Firm Shares
to be sold by each Selling Stockholder is set forth opposite its name in
Schedule II hereto. The Firm Shares and any Additional Shares purchased by the
Underwriters are herein referred to as the "Shares."
The Shares are more fully described in the Registration Statement referred
to hereafter.
1. Representations and Warranties of the Company and the Selling
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Stockholders.
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A. The Company and each of the Selling Stockholders jointly and
severally represent and warrant to, and agree with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, and amendments thereto, on
Form S-1 (No. 333-40383), for the registration of the Shares under the
Securities Act of 1933 (the "Act"). Such registration statement, including
the prospectus, financial statements and schedules, exhibits and all other
documents filed as a part thereof, as amended at the time of effectiveness
of the registration statement, including any information deemed to be a
part thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A or Rule 434 of the Rules and Regulations of the Commission under
the Act (the "Regulations"), and any additional related registration
statement filed pursuant to Rule 462(b) of the Act, is herein called the
"Registration Statement," and the prospectus, in the form first filed with
the Commission pursuant to Rule 424(b) of the Regulations, or filed as part
of the Registration Statement at the time of effectiveness if no Rule
424(b) or Rule 434 filing is required, is herein called the "Prospectus."
The term "preliminary prospectus" as used herein means a preliminary
prospectus as described in Rule 430 of the Regulations.
(b) At the time of effectiveness of the Registration Statement or the
effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant
to Rule 424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, and at the
Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and
any amendments thereof and supplements thereto complied or will comply in
all material respects with the applicable provisions of the Act and the
Regulations and do not or will not contain an untrue statement of a
material fact and does not or will not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading, and
(ii) in the case of the Prospectus, in light of the circumstances under
which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of
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the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the
Commission, such preliminary prospectus and any amendments thereof and
supplements thereto complied in all material respects with the applicable
provisions of the Act and the Regulations and did not contain an untrue
statement of a material fact and did not omit to state any 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. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related preliminary
prospectus or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through you as herein stated or by or on
behalf of any Selling Stockholder insofar as it relates to such Selling
Stockholder, in each case expressly for use in connection with the
preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Xxxxxx Xxxxxxxx LLP, which has certified the financial statements
and supporting schedules included in the Registration Statement, are
independent public accountants with regard to the Company as required by
the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a prospective material
adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and
its Subsidiaries (as defined below) taken as a whole, whether or not
arising from transactions in the ordinary course of business, and since the
date of the latest balance sheet presented in the Registration Statement
and the Prospectus, neither the Company nor any of its Subsidiaries has
incurred or undertaken any liabilities or obligations, direct or
contingent, which are material to the Company and its subsidiaries taken as
a whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus. Except as disclosed in or
contemplated by the Prospectus, since the date of the last audited
financial statements included in the Prospectus, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(e) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company, and this Agreement has been
duly and validly executed and delivered by the Company. This Agreement is
a valid and
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binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(f) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
(i) conflict with or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) or require consent under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries,
pursuant to the terms of any agreement, instrument, franchise, license or
permit to which the Company or any of its Subsidiaries is a party or by
which any of such corporations or their respective properties or assets may
be bound or (ii) violate or conflict with any provision of the
organizational documents of the Company or any of its Subsidiaries or any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body, domestic or foreign,
having jurisdiction over the Company or any of its Subsidiaries or any of
their respective properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered
by the Company hereunder, except the registration under the Act of the
Shares and such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. The Company has full power
and authority to authorize, issue and sell the Shares as contemplated by
this Agreement.
(g) All of the outstanding shares of Common Stock, including all
shares to be sold by the Selling Stockholders, are duly and validly
authorized and issued, fully paid and nonassessable and were not issued and
are not now in violation of or subject to any preemptive rights. The
Shares, when delivered and sold in accordance with this Agreement, will be
duly and validly issued and outstanding, fully paid and nonassessable, and
will not have been issued in violation of or subject to any preemptive
rights. The Company has an authorized and outstanding capitalization as
set forth in the Registration Statement and the Prospectus. The Common
Stock, the Firm Shares and the Additional Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(h) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
its jurisdiction
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of incorporation. The Company has no subsidiaries that are limited
partnerships, limited liability companies or other forms of entities other
than corporations. (The subsidiaries are hereinafter sometimes referred to
as "Subsidiaries.") Each of the Company and its Subsidiaries is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse
effect on the Company and its Subsidiaries taken as a whole. Each of the
Company and its Subsidiaries has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties
and conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualification, license or permit
contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. All of the issued and
outstanding shares of capital stock of each Subsidiary of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable and are owned by the Company, directly or through its
Subsidiaries, free from liens, encumbrances, claims, security interests,
restrictions on transfer, stockholders' agreement, voting trust and any
other defects of title.
(i) Except as described in or contemplated by the Prospectus, there
are no outstanding securities of the Company or any Subsidiary convertible
or exchangeable into or evidencing the right to purchase or subscribe for
any shares of Common Stock of the Company or shares of capital stock of any
Subsidiary, respectively, and there are no outstanding options, warrants or
rights of any character obligating the Company or any Subsidiary to issue
any shares of its capital stock or any securities convertible or
exchangeable or evidencing the right to purchase or subscribe therefor; and
except as described in the Prospectus, no holder of securities of the
Company or any Subsidiary or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Shares.
(j) Except as disclosed in the Prospectus, the Company and its
Subsidiaries have good and marketable title to all the producing oil and
gas properties described in the Prospectus as being owned by them or to be
owned by them upon completion of the Combination Transaction, free and
clear of any liens, encumbrances, equities, or claims of any nature, except
for the liens for taxes not yet due, liens, claims and encumbrances under
gas sales contracts, operating agreements, geophysical exploration
agreements, farm-out and farm-in agreements, participation
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agreements, unitization and pooling agreements, and such other agreements
as are customarily found in connection with comparable exploration,
drilling, producing and marketing operations, or in connection with the
acquisition of producing properties, and other liens, claims, contracts,
encumbrances and title defects that are, singly and in the aggregate, not
material in amount and do not materially interfere with the Company's or
such Subsidiary's use and enjoyment of its oil and gas properties.
(k) The written engineering reports prepared by X.X. Xxxxxxxx &
Associates, Inc. and Xxxxxx and Xxxxx, Ltd., oil and gas engineering
consulting firms (the "Engineers"), as of September 30, 1997, setting forth
the engineering values attributed to the oil and gas properties of the
Company and its Subsidiaries on a pro forma basis giving effect to the
Combination Transaction as if it had already occurred accurately reflect in
all material respects the ownership interests of the Company and its
Subsidiaries in the properties therein as of September 30, 1997 on a pro
forma basis, except as otherwise disclosed in the Prospectus. The
information furnished to the Engineers upon which each of the Engineers,
based its report was, at the time of delivery thereof, complete and
accurate in all material respects. No facts have arisen of which the
Company has knowledge that might cause a reasonable person to believe that
any of the information supplied to either of the Engineers was incorrect or
incomplete in any material respect.
(l) Except as disclosed in the Prospectus, the Company and its
Subsidiaries possess adequate certificates, authorities or permits issued
by appropriate governmental agencies or bodies necessary to conduct the
business now operated by them, except for such certificates, authorities or
permits the failure of which to obtain would not have a material adverse
effect on the Company or any of its Subsidiaries taken as a whole, and have
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its Subsidiaries taken as a whole.
(m) That certain Agreement for Purchase and Sale dated November 25,
1997, between the Company and Amerada Xxxx Corporation, a Delaware
corporation (the "AHC Purchase Agreement"), is in full force and effect;
and neither the Board of Directors of the Company (or any committee
thereof) nor any shareholder of the Company has taken any action, or to the
knowledge of the Company is contemplating taking any action, to modify,
amend, supplement or rescind the Acquisition Agreement (except for any
modifications or amendments that have been filed as exhibits to the
Registration Statement); all of the conditions to consummating the
Acquisition have been satisfied or are reasonably expected by the Company
to be satisfied as of the Closing Date, and no event has occurred, or to
the knowledge of
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the Company is reasonably expected to occur, which would prevent or delay
the consummation of the transaction contemplated thereby immediately, or
waive any provision thereof, following the consummation of the sale of the
Firm Shares pursuant to this Agreement.
(n) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(o) The Company and its Subsidiaries own, possess or license adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or presently employed by them, and have not
received any notice of termination of any license or notice of infringement
of or conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the Company
or any of its Subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company and its Subsidiaries taken as a
whole.
(p) Except as disclosed in the Prospectus, neither the Company nor any
of its Subsidiaries (i) is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), (ii) owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, (iii) is liable for any off-site disposal or
contamination pursuant to any environmental laws, or (iv) is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a material
adverse effect on the Company and its Subsidiaries taken as a whole; and
the Company is not aware of any pending investigation which might lead to
such a claim.
(q) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its Subsidiaries is
a party or to which any property of the Company or any of its Subsidiaries
is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its Subsidiaries which might
result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or, results of operations of the Company and
its Subsidiaries taken as a whole or which is required to be disclosed in
the Registration Statement and the Prospectus.
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(r) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(s) The financial statements of Xxxxxx Exploration Company including
the notes thereto, and supporting schedules included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its Subsidiaries as of the dates indicated and the results of
its operations and cash flows for the periods specified and the financial
statements, including the notes thereto, of the Xxxxxx Exploration Company
Acquired Properties included in the Registration Statement and the
Prospectus present fairly the historical revenues and direct operating
expenses of the Acquired Properties for the dates specified; except as
otherwise stated in the Registration Statement, such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein; and the assumptions used in preparing the
pro forma financial statements included in the Registration Statement and
the Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(t) Except as described in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby.
(u) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(v) The Shares have been approved for listing on the Nasdaq National
Market ("NASDAQ") subject to notice of issuance.
(w) The Company has obtained and delivered to you before the date
hereof the written agreements of each of its directors, officers and
securityholders that, for a period of 180 days after the date of the final
Prospectus filed with the Commission pursuant to Rule 424(b), such persons
will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of the Company's
Common Stock or securities convertible into or exchangeable or
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exercisable for any shares of the Company's Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposal or
filing, without the prior written consent of Bear, Xxxxxxx & Co. Inc.
(x) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.
(y) There are no outstanding options, warrants, or rights of any
character obligating the Company to issue any shares of Common Stock that
are currently exercisable or will become exercisable within 180 days of the
Closing Date or any Additional Closing Date.
B. Each Selling Stockholder represents and warrants to, and agrees
with, the several Underwriters that:
(a) Such Selling Stockholder has (i) caused a certificate or
certificates for the number of Shares to be sold by such Selling
Stockholder hereunder to be delivered to [Xxxxxx Exploration Company] (the
"Custodian"), endorsed in blank or with blank stock powers duly executed,
with signatures appropriately guaranteed, such certificate or certificates
to be held in escrow by [Xxxxxx Exploration Company], in accordance with
the terms of a custodian agreement, for delivery pursuant to the provisions
hereof on the Closing Date, and (ii) granted an irrevocable power of
attorney to [Xxxxx X. Xxxxxx and Xxxxxxx Xxxxxxxxxxx], or any of them, as
such Selling Stockholder's attorney-in-fact (each, an "Attorney-In-Fact")
in the form heretofore delivered to you (the custodian agreements, together
with the irrevocable powers of attorney, executed by all Selling
Stockholders being hereinafter collectively referred to as the "Custodian
Agreement").
(b) The execution, delivery and performance of this Agreement and the
Custodian Agreement by or on behalf of such Selling Stockholder and the
consummation of the transactions contemplated hereby and thereby will not
(i) conflict with or result in the breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) or require consent
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Selling Stockholder
pursuant to the terms of any agreement, instrument, franchise, license or
permit to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of such Selling Stockholder's property or assets
may be bound, or (ii) violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having
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jurisdiction over such Selling Stockholder or such Selling Stockholder's
properties or assets.
(c) Such Selling Stockholder has, and at the time of delivery of the
Shares to be sold by such Selling Stockholder such Selling Stockholder will
have, full legal right, power, authority and capacity, and, except as
required under the Act and state securities and Blue Sky Laws, all
necessary consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, as are required for the
execution, delivery and performance of this Agreement and the Custodian
Agreement and the consummation of the transactions contemplated hereby and
thereby, including the sale, assignment, transfer and delivery of the
Shares to be sold, assigned, transferred and delivered by such Selling
Stockholder hereunder.
(d) Each of this Agreement and the Custodian Agreement has been duly
and validly authorized, executed and delivered by such Selling Stockholder
and is a valid and binding obligation of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance with its terms,
except to the extent that rights to indemnity hereunder may be limited by
applicable federal or state securities laws or the public policy underlying
such laws.
(e) Such Selling Stockholder has good, valid and marketable title to
the Shares to be sold by such Selling Stockholder pursuant to this
Agreement, free and clear of all liens, encumbrances, claims, security
interests, restrictions on transfer, stockholders' agreements, voting
trusts and other defects in title whatsoever, with full power to deliver
such Shares hereunder, and, upon the delivery of and payment for such
Shares as herein contemplated, each of the Underwriters will receive good,
valid and marketable title to the Shares purchased by it from such Selling
Stockholder, free and clear of all liens, encumbrances, claims, security
interests, restrictions on transfer, stockholders agreements, voting trusts
and other defects in title whatsoever.
(f) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which has constituted or which was designed to
constitute or which might be reasonably expected to cause or result in
stabilization or manipulation of the price of the shares of Common Stock.
(g) When the Registration Statement shall become effective, when any
amendment to the Registration Statement becomes effective, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) of
the Regulations, when any amendment of or supplement to the Prospectus is
filed with the Commission and at the Closing Date, such parts of the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto as relate to such Selling Stockholder and are based
upon information furnished in writing to the Company by or on behalf
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of such Selling Stockholder expressly for use therein will not contain an
untrue statement of a material fact and will not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and when any related preliminary
prospectus was first filed with the Commission (whether filed as part of
the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the
Commission, such parts of such preliminary prospectus and any amendments
thereof and supplements thereto as relate to such Selling Stockholder and
are based on information furnished in writing to the Company by or on
behalf of such Selling Stockholder expressly for use therein did not
contain an untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(h) The sale of the Shares by the Selling Stockholder pursuant hereto
is not prompted by any information concerning the Company which is not set
forth in the Registration Statement. The information pertaining to the
Selling Stockholder under the caption "Principal and Selling Stockholders"
in the Prospectus is complete and accurate in all material respects. If
there is any change in such information with respect to the Selling
Stockholder, the Selling Stockholder will immediately notify you of such
change.
2. Purchase, Sale and Delivery of the Shares.
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(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, (i) the Company agrees to sell to the several Underwriters and
the Underwriters, severally and not jointly, agree to purchase from the
Company, at a purchase price of $______ per share, the number of Firm
Shares set forth opposite the respective names of the Underwriters in
Column (1) of Schedule I hereto and (ii) the Selling Stockholders,
severally and not jointly, agree to sell to the several Underwriters and
the Underwriters, severally and not jointly, agree to purchase from the
Selling Stockholders, at $___ per share the number of Firm Shares set forth
opposite the respective names of the Underwriters in Column (2) of Schedule
I hereto, in each case plus any additional number of Shares that the
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof. The number of Firm Shares to be sold by each Selling
Stockholder to each Underwriter shall be the number which bears the same
proportion to the total number of Firm Shares to be sold by such Selling
Stockholder, as specified in Schedule II hereto, as the number of Firm
Shares set forth opposite the name of such Underwriter in Column (2) of
Schedule I bears to the total number of Firm Shares to be sold by the
Selling Stockholders, subject to such adjustments to eliminate any
fractional shares as you in your sole discretion shall make.
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(b) Certificates in negotiable form for the total number of the Firm
Shares sold hereunder by each Selling Stockholder have been placed in
escrow with [the Company] as Custodian pursuant to the Custodian Agreement
executed by each Selling Stockholder for delivery of all Firm Shares to be
sold hereunder by such Selling Stockholder. Each Selling Stockholder
specifically agrees that the Firm Shares represented by the certificates
held in custody for the Selling Stockholder under the Custodian Agreement
are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholder for such escrow are to that
extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminable by any act or deed of the Selling
Stockholder (or by any other person, firm or corporation including the
Company, the escrow agent or the Underwriters) or by operation of law
(including the death of an individual Selling Stockholder or the
dissolution of a corporate Selling Stockholder) or by the occurrence of any
other event or events, except as set forth in the Custodian Agreement. If
any such event should occur prior to the delivery to the Underwriters of
the Firm Shares hereunder, certificates for the Firm Shares shall be
delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such event had not occurred. The Custodian is
authorized to receive and acknowledge receipt of the proceeds of sale of
the Shares held by it against delivery of such Shares.
(c) Payment of the purchase price for, and delivery of certificates
for, the Firm Shares shall be made at the office of Xxxxxx & Xxxxxx L.L.P.,
0000 Xxxxxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxx, or such other place as shall be
agreed upon by you and the Company, at 9:00 A.M., Dallas, Texas time, on
the third or fourth business day (as permitted under Rule 15c6-1 under the
Exchange Act) (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof) following the date the Registration
Statement becomes effective (or, if the Company has elected to rely upon
Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination
of the initial public offering price of the Shares), or at such other time
not later than ten business days after such date as shall be agreed upon by
you, the Selling Stockholders and the Company (such time and date of
payment and delivery being herein called the "Closing Date"). Delivery of
the certificates for the Firm Shares shall be made to you for the
respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price for
the Firm Shares by wire transfer of federal (same day) funds, to the
account(s) designated by the Company.
(d) Certificates for the Firm Shares shall be registered in such name
or names and in such authorized denominations as you may request in writing
at least two full business days prior to the Closing Date. The Company and
the Selling
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Stockholders will permit you to examine and package such certificates for
delivery at least one full business day prior to the Closing Date.
(e) In addition, the Company hereby grants to the several Underwriters
the option to purchase up to ____ Additional Shares at the same purchase
price per share to be paid by the several Underwriters to the Company and
the Selling Stockholders for the Firm Shares as set forth in this Section
2, for the sole purpose of covering over-allotments in the sale of Firm
Shares by the several Underwriters. This option may be exercised at any
time in whole or in part on or before the thirtieth day following the
effective date of the Registration Statement, by written notice by you to
the Company and the Custodian. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised and
the date and time, as reasonably determined by you, when the Additional
Shares are to be delivered (each such date and time being herein sometimes
referred to as an "Additional Closing Date"); provided, however, that the
-------- -------
Additional Closing Date shall not be earlier than the Closing Date or
earlier than the second full business day after the date on which the
option shall have been exercised nor later than the tenth full business day
after the date on which the option shall have been exercised (unless such
time and date are postponed in accordance with the provisions of Section 9
hereof). Certificates for the Additional Shares shall be registered in such
name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing
Date. The Company will permit you to examine and package such certificates
for delivery at least one full business day prior to the Additional Closing
Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Column (1) of Schedule I hereto
(or such number increased as set forth in Section 9 hereof) bears to
________ [insert the total number of Firm Shares being purchased], subject,
however, to such adjustments to eliminate any fractional shares as you in
your sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer of
federal (same day) funds, to the account designated by the Company
Custodian, upon delivery of the certificates for the Additional Shares to
you for the respective
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accounts of the Underwriters at the offices of Xxxxxx & Xxxxxx L.L.P., 0000
Xxxxxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxx, or such other place as shall be agreed
upon by you and the Company.
(f) If on the Closing Date a Selling Stockholder fails to sell the
Firm Shares that such Selling Stockholder has agreed to sell on such date
as set forth in Schedule II hereto, the Company agrees that it will sell or
arrange for the sale of the number of shares of Common Stock to the
Underwriters that represents the Firm Shares which such Selling Stockholder
has failed to so sell, as set forth in Schedule II hereto, or such lesser
number as may be requested by the Representatives. In no event shall this
Section be construed to excuse the Selling Stockholder from the full
performance of its obligations under this Agreement.
3. Offering. Upon your authorization of the release of the Firm
--------
Shares, the several Underwriters propose to offer the Firm Shares for sale to
the public upon the terms set forth in the Prospectus. To the extent, if at
all, that any Additional Shares are purchased pursuant to Section 2 hereof, the
Underwriters will offer them to the public on the foregoing terms.
4. Covenants of the Company and the Selling Stockholders.
-----------------------------------------------------
A. The Company covenants and agrees with the several Underwriters
that:
-14-
(a) If the Registration Statement has not yet been declared effective,
the Company will use its best efforts to cause the Registration Statement
and any amendments thereto to become effective as promptly as possible, and
if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or
Rule 434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely
on Rule 434, the Company will prepare and file a term sheet that complies
with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information, (iii) of the mailing
or delivery to the Commission for filing of any amendment of or supplement
to the Registration Statement or the Prospectus, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, (v) of the
receipt of any comments from the Commission, and (vi) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if
issued, to obtain the lifting of such order as soon as possible. The
Company will not file any amendment to the Registration Statement or any
amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from
the prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement
to which you shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would, in
the judgment of the Underwriters or the Company, include an untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it
shall be necessary at any time to amend or supplement the Prospectus or
Registration Statement to comply with the Act or the Regulations, the
Company will notify you promptly and prepare and file with the Commission
an appropriate amendment or supplement (in form and substance satisfactory
to you)
-15-
which will correct such statement or omission and will use its best
efforts to have any amendment to the Registration Statement declared
effective as soon as possible.
(c) The Company will promptly deliver to you four signed copies of the
Registration Statement, including exhibits and all amendments thereto, and
the Company will promptly deliver to each of the several Underwriters such
number of copies of any preliminary prospectus, the Prospectus, the
Registration Statement, and all amendments of and supplements to such
documents, if any, as you may reasonably request. The Prospectus shall be
furnished on or prior to 3:00 P.M., New York time, on the second business
day following the later of the execution and delivery of this Agreement or
the effective time of the Registration Statement.
(d) The Company will endeavor in good faith, in cooperation with you,
at or prior to the time the Registration Statement becomes effective, to
qualify the Shares for offering and sale under the securities laws relating
to the offering or sale of the Shares of such jurisdictions as you may
designate and to maintain such qualification in effect for so long as
required for the distribution thereof, except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the
Registration Statement occurs, an earnings statement (in form complying
with the provisions of Rule 158 of the Regulations) covering a period of at
least twelve consecutive months beginning after the effective date of the
Registration Statement.
(f) During the period of 180 days from the date of the Prospectus, the
Company will not, without your prior written consent, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of or
agree to dispose of, directly or indirectly, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common
Stock), and the Company will obtain the undertaking of each of its
officers, directors and securityholders (including, without limitation, its
optionholders), all of which are listed on Schedule IV hereto, not to
engage in any of the aforementioned transactions on their own behalf, other
than the Company's sale of Shares hereunder and the Company's issuance of
Common Stock upon the exercise of presently outstanding stock options.
(g) During the period of three years from the effective date of the
Registration Statement, the Company will furnish to the Representatives
copies of (i) all reports to its stockholders; and (ii) all reports,
financial statements and proxy
-16-
or information statements filed by the Company with the Commission or any
national securities exchange.
(h) The Company will apply the proceeds from the sale of the Shares as
set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the Regulations.
(j) The Company agrees that it will not accelerate the vesting or
exercisability of any options, warrants, or rights of any character
obligating the Company to issue any shares of Common Stock so that any such
options, warrants, or rights shall become exercisable within 180 days of
the Closing Date or any Additional Closing Date.
B. Each Selling Stockholder covenants and agrees with the several
Underwriters that:
(a) During a period of 180 days from the date of the Prospectus, such
Selling Stockholder will not, without your prior written consent, sell,
offer or agree to sell, grant any option for the sale of, or otherwise
dispose of or agree to dispose of, directly or indirectly, any Common Stock
(or any securities convertible into, exercisable for or exchangeable for
Common Stock), except for sales to the Underwriters as provided in this
Agreement.
(b) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, such Selling Stockholder
shall deliver to you prior to or at the Closing Date a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by the Treasury Department
regulations in lieu thereof).
(c) Such Selling Stockholder shall not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company, and other than as permitted by
the Act, the Selling Stockholder shall not distribute any prospectus or
other offering material in connection with the offering of the Shares.
5. Payment of Expense. Whether or not the transactions contemplated
------------------
in this Agreement are consummated or this Agreement is terminated, the Company
and the Selling Stockholders each hereby jointly and severally agree to pay all
reasonable costs and expenses
-17-
incident to the performance of the obligations of the Company and the Selling
Stockholders hereunder, including those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any preliminary prospectus, the Prospectus and any amendments thereof or
supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement, and the Agreement Among Underwriters) and all other documents related
to the public offering of the Shares (including those supplied to the
Underwriters in quantities as hereinabove stated), (ii) the travel expenses of
the Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of the
Shares, (iii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iv) the
qualification of the Shares under state or foreign securities or Blue Sky Laws,
including the costs of printing and mailing a preliminary and final "Blue Sky
Survey" and the fees of counsel for the Underwriters and such counsel's
disbursements in relation thereto, (v) quotation of the Shares on the NASDAQ,
(vi) filing fees of the Commission and the National Association of Securities
Dealers, Inc., (vii) the cost of printing certificates representing the Shares,
and (viii) the cost and charges of any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
several Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein contained, as of the date hereof and as of the Closing Date (or in the
case of the Additional Shares as of the Additional Closing Date), to the absence
from any certificates, opinions, written statements or letters furnished to you
or to Xxxxxx & Xxxxxx L.L.P. ("Underwriters' Counsel") pursuant to this Section
6 of any misstatement or omission, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement, including any related registration
statement filed pursuant to Rule 462(b) under the Act, shall have become
effective not later than 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434 of the Regulations, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 4(a) hereof; and,
at or prior to the Closing Date and Additional Closing Date, as the case
may be, no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued
and no proceedings therefor shall have been initiated or threatened by the
Commission.
(b) At the Closing Date and each Additional Closing Date, you shall
have received the opinion of Xxxxxx Xxxxxxxx & Xxxx LLP, counsel for the
Company, dated the Closing Date or the Additional Closing Date, as the case
may be, addressed
-18-
to the Underwriters and in form and substance satisfactory to Underwriters'
Counsel, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation or formation.
Each of the Company and its Subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse
effect on the Company and its Subsidiaries taken as a whole. Each of
the Company and its Subsidiaries has all requisite power and authority
to own, lease and license its respective properties and conduct its
business as now being conducted and as described in the Registration
Statement and the Prospectus. All of the issued and outstanding
capital stock of each Subsidiary has been duly and validly issued and
is fully paid and nonassessable and, to such counsel's knowledge, was
not issued in violation of, and is free of, preemptive rights and is
owned directly or indirectly by the Company, free and clear of any
lien, encumbrance, claim, security interest, restriction on transfer,
stockholders' agreement, voting trust or other defect of title
whatsoever.
(ii) The Company has authorized capital stock as set forth under
the caption "Capitalization" in the Registration Statement and the
Prospectus. All of the outstanding shares of Common Stock are duly and
validly authorized and issued, are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive rights.
The Shares to be delivered by the Company on the Closing Date or
Additional Closing Date, as the case may be, have been duly and
validly authorized and, when delivered in accordance with this
Agreement, will be duly and validly issued, fully paid and
nonassessable and will not have been issued in violation of or subject
to any preemptive rights. Each of the Underwriters will receive good,
valid and marketable title to the Firm Shares and the Additional
Shares being sold by the Company hereunder, free and clear of all
liens, encumbrances, claims, security interests, restrictions on
transfer, stockholders' agreements, voting trusts and other defects of
title whatsoever. The shares of Common Stock to be issued in the
Combination Transaction were offered and will be issued in a
transaction exempt from the registration requirements of the Act
pursuant to Section 4(2) of the Act, which was completed prior to the
initial filing of the Registration Statement as contemplated by Rule
152 under the Act. The Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the
-19-
Prospectus under the caption "Description of Capital Stock", and,
assuming the certificates for the Common Stock are in the form filed
with the Commission, are in due and proper form and comply with the
requirements of Delaware law, the Company's certificate of
incorporation and by-laws, and the requirements of the NASDAQ.
(iii) Except as described in or contemplated by the Prospectus,
to the knowledge of such counsel, there are no outstanding securities
of the Company or any Subsidiary convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of Common
Stock of the Company or shares of capital stock, partnership interests
or membership interests of any Subsidiary, respectively, and there are
no outstanding options, warrants, or rights of any character
obligating the Company or any Subsidiary to issue any shares of its
capital stock, any partnership interests or any membership interests,
as applicable, or any securities convertible or exchangeable or
evidencing the right to purchase or subscribe therefor; and except as
described in the Prospectus, to the knowledge of counsel, no holder of
securities of the Company or any Subsidiary or any other person has
the right, contractual or otherwise, which has not been satisfied or
effectively waived, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, any of the Shares.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) To such counsel's knowledge, there is no litigation or
governmental or other action, suit, proceeding or investigation before
any court or before or by any public, regulatory or governmental
agency or body pending or, to the best of such counsel's knowledge,
threatened against, or involving the properties or business of, the
Company or any of its Subsidiaries, which, if resolved against the
Company or such Subsidiary, individually or, to the extent involving
related claims or issues, in the aggregate, is of a character required
to be disclosed in the Registration Statement and the Prospectus which
has not been properly disclosed therein.
(vi) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby do not
and will not (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default) or
require consent under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any of its Subsidiaries pursuant to the terms of any agreement,
instrument, franchise, license or permit known to
-20-
such counsel to which the Company or any of its Subsidiaries is a
party or by which any of such corporations or their respective
properties or assets may be bound or (B) violate or conflict with any
provision of the organizational documents of the Company or any of its
Subsidiaries, or, to the knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective
properties or assets. To such counsel's knowledge, no consent,
approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental, or
regulatory agency or body having jurisdiction over the Company or any
of its Subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, except
for (1) such as may be required under foreign securities laws or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (2) such as have been made or
obtained under the Act.
(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial and petroleum engineering
data included therein, as to which no opinion need be rendered) comply
as to form in all material respects with the requirements of the Act
and the Regulations.
(viii) The Registration Statement is effective under the Act,
and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have
been initiated or threatened by the Commission, and all filings
required by Rule 424(b) of the Regulations have been made.
(ix) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act; and all rights to
require registration of any securities under that agreement have been
waived with respect to the offering contemplated hereby and for 180
days after the date of the initial public offering of the Shares.
-21-
(x) In addition, such opinion shall also contain a statement
that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent
public accountants for the Company and the Underwriters at which the
contents and the Prospectus and related matters were discussed, and no
facts have come to the attention of such counsel which would lead such
counsel to believe that either the Registration Statement at the time
it became effective (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to
Rule 430A or Rule 434, if applicable), or any amendment thereof made
prior to the Closing Date or Additional Closing Date, as the case may
be, as of the date of such amendment, contained an untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date (or any amendment
thereof or supplement thereto made prior to the Closing Date or the
Additional Closing Date, as the case may be, as of the date of such
amendment or supplement) contained or contains an untrue statement of
a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and
schedules and other financial and petroleum engineering data included
therein).
(xi) The Shares to be sold under this Agreement have been
approved for quotation on the NASDAQ upon notice of issuance.
(xii) Based on current law, the holding periods for the holders
of the Company's unregistered securities for purposes of Rule 144 of
the Act are as stated under the caption "Shares Eligible for Future
Sale" in the Prospectus.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions, (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company and its Subsidiaries, provided that copies of any
such statements or certificates shall be delivered to Underwriters'
-22-
Counsel. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel is in form satisfactory to such counsel and,
in their opinion, you and they are justified in relying thereon.
(c) At the Closing Date you shall have received the favorable
opinions of Xxxxxx Xxxxxxxx & Xxxx LLP, counsel for the Selling Stockholders,
dated the Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, with respect to each Selling Stockholder,
to the effect that:
(i) Each of this Agreement and the Custodian Agreement has
been duly and validly authorized, executed and delivered by or on
behalf of that Selling Stockholder. The Custodian Agreement is a valid
and binding obligation of that Selling Stockholder, enforceable
against such Selling Stockholder in accordance with its terms.
(ii) To the best knowledge of such counsel, each Selling
Stockholder has all requisite power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits of and from all courts and all
public, governmental or regulatory agencies and bodies as are required
for the execution, delivery and performance of this Agreement and the
Custodian Agreement and the consummation of the transactions
contemplated hereby and thereby except for (1) such as may be required
under state securities or Blue Sky Laws in connection with the
purchase and distribution of the Shares by the Underwriters (as to
which such counsel need express no opinion) and (2) such as have been
made or obtained under the Act.
(iii) Upon the delivery of and payment for the Shares to be
sold by that Selling Stockholder pursuant to this Agreement as herein
contemplated, each of the Underwriters who has acquired shares from
the Selling Stockholder in good faith and without notice of any
adverse claim within the meaning of the Uniform Commercial Code will
acquire the shares being sold by each Selling Stockholder on the
Closing Date, free of any adverse claim. The owner of such shares, if
other than the Selling Stockholder is precluded from asserting against
the Underwriters the ineffectiveness of any authorized endorsement or
instruction, assuming the Underwriters purchased such shares for value
in good faith and without notice of any adverse claim.
(iv) The execution, delivery and performance of this Agreement
and the Custodian Agreement by that Selling Stockholder and the
consummation of the transactions contemplated hereby and thereby will
not violate or conflict with any provision of the organizational
documents of that Selling Stockholder (if such Selling Stockholder is
not an individual) or, to
-23-
the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental
or regulatory agency or body having jurisdiction over any of that
Selling Stockholder or any of its properties or assets.
(v) The statements in the Prospectus under the caption
"Principal and Selling Stockholders," insofar as such statements
constitute a summary of the matters referred to therein, fairly
present the information called for with respect to such matters.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of, or certificates of responsible officers of, the
Selling Stockholders, provided that copies of any such Statements or
certificates shall be delivered to Underwriters' Counsel. The opinions of such
counsel for the Selling Stockholders shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(d) At the Closing Date and Additional Closing Date, you shall have
received a certificate of the Chief Executive Officer and the Chief Financial
Officer of the Company, dated the Closing Date or Additional Closing Date, as
the case may be, to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date or Additional Closing Date, as the case may be, the
representations and warranties of the Company set forth in Section 1 hereof are
accurate, (iii) as of the Closing Date or the Additional Closing Date, as the
case may be, the obligations of the Company to be performed hereunder on or
prior thereto have been duly performed, and (iv) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, (A) the Company and its Subsidiaries have not sustained any material
loss or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and (B) there has not been any material adverse change, or any development
involving a material adverse change, in the business prospects, properties,
operations, condition (financial or otherwise), or results of operations of the
Company and its Subsidiaries taken as a whole, except in each case as described
in or contemplated by the Prospectus.
-24-
(e) At the Closing Date, you shall have received a certificate
executed by or on behalf of each Selling Stockholder, dated the Closing
Date, to the effect that the representations and warranties of such Selling
Stockholder set forth in Section 1 hereof are accurate, and that as of the
Closing Date, the obligations of such Selling Stockholder to be performed
hereunder on or prior thereto have been duly performed.
(f) At the time this Agreement is executed and at the Closing Date
(and Additional Closing Date), you shall have received a letter, from
Xxxxxx Xxxxxxxx LLP, independent public accountants for the Company, dated,
respectively, as of the date of this Agreement and as of the Closing Date
or Additional Closing Date, as the case may be, addressed to the
Underwriters and in form and substance satisfactory to you, to the effect
that: (i) they are independent accountants with respect to the Company
within the meaning of the Act and the Regulations; (ii) stating that, in
their opinion, the financial statements and schedules of the Company and
the Acquired Properties audited by them and included in the Registration
Statement and the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and the Regulations
with respect to registration statements on Form S-1; (iii) on the basis of
procedures (but not an audit in accordance with generally accepted auditing
standards) consisting of a reading of the minutes of meetings and consents
of the stockholders and boards of directors of the Company and its
Subsidiaries and the committees of such boards subsequent to December 31,
1996 as set forth in the minutes books through a specified date not more
than five business days prior to the date of delivery of such letter,
inquiries of officers and other employees of the Company and its
Subsidiaries who have responsibility for financial and accounting matters
of the Company and its Subsidiaries with respect to transactions and events
subsequent to December 31, 1996 to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would
cause them to believe that: (A) with respect to the period subsequent to
December 31, 1996, there were, as of a specified date not more than five
days prior to the date of such letter, any changes in long-term
indebtedness of the Company or any decrease, excluding net losses, of the
Company, capital stock of the Company, or stockholders' equity of the
Company, in each case as compared with the amounts shown in the most recent
balance sheet of the Company, as applicable, included in the Registration
Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may
occur or which are set forth in such letter, or (B) that during the period
from January 1, 1997 to a specified date not more than five days prior to
the date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, except
for decreases which the Registration Statement and the Prospectus disclose
have occurred or may occur or which are set forth in such letter; (iv) they
have read the unaudited pro forma financial statements included in the
Registration Statement and inquired of officials of the Company about the
basis for their determination of the pro forma adjustments, and whether the
unaudited pro
-25-
forma financial statements included in the Registration Statement comply as
to form in all material respects with the applicable accounting
requirements of rule 11-02 of Regulation S-X; (v) they have proved the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma financial statements; (vi) on
the basis of the review referred to in (iv) and (v) above, nothing came to
their attention that caused them to believe that the unaudited pro forma
financial statements included in the Registration Statement do not comply
as to form in all material respects with the applicable accounting
requirements of rule 11-02 of Regulation S-X and that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements; and (vii) stating that they have compared
specific dollar amounts, numbers of shares, percentages of revenues and
earnings, and other financial information pertaining to the Company and its
Subsidiaries set forth in the Registration Statement and the Prospectus,
which have been specified by you prior to the date of this Agreement, and
they (Xxxxxx Xxxxxxxx LLP) are willing to perform to the extent that such
amounts, numbers, percentages, and information may be derived from the
general accounting and financial records of the Company and its
Subsidiaries which are subject to the internal controls of the Company's
accounting system, and excluding any questions requiring an interpretation
by legal counsel, with the results obtained from the application of
specified readings, inquiries, and other appropriate procedures specified
by you (which procedures do not constitute an examination in accordance
with generally accepted auditing standards) set forth in such letter.
(g) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and
the Underwriters shall have received from Underwriters' Counsel a favorable
opinion, dated as of the Closing Date and the Additional Closing Date, as
the case may be, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters,
as you may reasonably require, and the Company and the Selling Stockholders
shall have furnished to Underwriters' Counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(h) You shall have received from each person who is a director,
officer or shareholder of the Company, all of which are listed on Schedule
III hereto, an agreement to the effect that such person will not, directly
or indirectly, without your prior written consent, offer, sell, offer or
agree to sell, grant any option to purchase or otherwise dispose (or
announce any offer, sale, grant of an option to purchase or other
disposition) of any shares of Common Stock (or any securities convertible
into, exercisable for or exchangeable or exercisable for shares of Common
Stock) for a period of 180 days after the date of the Prospectus.
-26-
(i) At the Closing Date, the Shares shall have been approved for
quotation on the NASDAQ.
(j) At the time of execution of this Agreement, the Closing Date and
the Additional Closing Date, you shall have received a letter of Xxxxxx
Xxxxxxxx LLP, dated respectively the date hereof, the Closing Date or the
Additional Closing Date, substantially in the forms heretofore approved by
the Representatives.
(k) Prior to the Closing Date and the Additional Closing Date, the
Company and the Selling Stockholders shall have furnished to you such
further information, certificates and documents as you may reasonably
request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
canceled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company and the Selling
Stockholders in writing, or by telephone, telex or telegraph, confirmed in
writing.
7. Indemnification.
----------------
(a) The Company and each of the Selling Stockholders jointly and
severally agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Securities Exchange Act of 1934 (the
"Exchange Act"), against any and all losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as originally
filed or any amendment thereof (including any registration statement filed
pursuant to Rule 462(b)), or any related preliminary prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company and
--------- -------
the Selling Stockholders will not be liable in any
-27-
such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
through you (or, except as provided in Section 7(b), by or on behalf of any
Selling Stockholder insofar as it relates to such Selling Stockholder), in
each case expressly for use therein. This indemnity agreement will be in
addition to any liability which the Company and the Selling Stockholders
may otherwise have including under this Agreement.
-28-
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, each Selling Stockholder, each of the
directors of the Company, each of the officers of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally
filed or any amendment thereof, or any related preliminary prospectus or
the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no event shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the
Shares purchased by such Underwriter hereunder. This indemnity will be in
addition to any liability which any Underwriter may otherwise have
including under this Agreement. The Company and each Selling Stockholder
acknowledge that the statements set forth in the last paragraph of the
cover page and in the [first four] paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished
in writing by or on behalf of any Underwriter expressly for use in the
registration statement relating to the Shares as originally filed or in any
amendment thereof, any related preliminary prospectus or the Prospectus or
in any amendment thereof or supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 7 except
to the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may have otherwise). In case any
such action is brought
-29-
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense
of such action, (ii) the indemnifying parties shall not have employed
counsel to have charge of the defense of such action within a reasonable
time after notice of commencement of the action, or (iii) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the 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 (b) effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall neither (a) have reimbursed
such indemnified party in accordance with such request for fees and
expenses of counsel prior to the date of such settlement nor (b) no later
than ten days prior to such settlement being entered into, have both given
written notice to such indemnified party of the amount of such fees and
expenses that it believes are unreasonable and the basis (which must be
reasonable) for that view and reimbursed such indemnified party for all
other such fees and expenses.
-30-
(e) The provisions of this Section shall not affect any agreement
among the Company and the Selling Stockholder(s) with respect to
indemnification.
8. Contribution. In order to provide for contribution in
------------
circumstances in which the indemnification provided for in Section 7(a) hereof
is for any reason held to be unavailable from the Company or any Selling
Stockholder or is insufficient to hold harmless a party indemnified thereunder,
the Company, the Selling Stockholders and the Underwriters shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provisions (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company and any Selling Stockholder any contribution received by
the Company or such Selling Stockholder from persons, other than the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company, one or
more of the Selling Stockholders and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders, on
the one hand, and the Underwriters, on the other hand, shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the Selling Stockholders and (y) the underwriting discounts
and commissions received by the Underwriters, respectively, in each case as set
forth in the table on the cover page of the Prospectus (and as each such amount
may be similarly determined to give effect to the sale of the Additional Shares,
if any). The relative fault of the Company and the Selling Stockholders and of
the Underwriters 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 and the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 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 which does not take account of the
equitable considerations referred to above. The Company and each Selling
Stockholder shall be jointly and severally liable for the amounts to be
contributed by any of them pursuant to the provisions of this Section 8.
Notwithstanding the provisions of this Section 8,
-31-
(i) in no case shall any Underwriter (except as may be provided in the Agreement
Among Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 8, 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. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, each person, if any, who controls a Selling Stockholder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Selling Stockholder, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 8, notify such party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 8 or otherwise.
9. Default by an Underwriter.
-------------------------
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default
relates do not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the number
of shares of Firm Shares or Additional Shares, as the case may be, which
all Underwriters have agreed to purchase hereunder, then such Firm Shares
or Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions
which the numbers of Firm Shares set forth opposite their respective names
in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase
such Firm Shares or Additional Shares, as the case may be, to which such
default relates on the terms contained herein. In
-32-
the event that within five calendar days after such a default you do not
arrange for the purchase of the Firm Shares or Additional Shares, as the
case may be, to which such default relates as provided in this Section 9,
this Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the Company
to sell the Additional Shares shall thereupon terminate, without liability
on the part of the Company or the Selling Stockholders with respect thereto
(except in each case as provided in Sections 5, 7(a) and (b) and 8 hereof)
or the several Underwriters, but nothing in this Agreement shall relieve a
defaulting Underwriter or Underwriters of its or their liability, if any,
to the other several Underwriters, the Company and the Selling Stockholders
for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters,
or are to be purchased by another party or parties as aforesaid, you or the
Company shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be, for a period, not exceeding five business
days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the
opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
10. Survival of Representations and Agreements. All representations
------------------------------------------
and warranties, covenants and agreements of the Underwriters, the Selling
Stockholders and the Company contained in this Agreement, including the
agreements contained in Section 5, the indemnity agreements contained in Section
7 and the contribution agreements contained in Section 8, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof or by or on behalf
of the Company, any of its officers and directors or any Selling Stockholder or
any controlling person thereof, and shall survive delivery of and payment for
the Shares to and by the several Underwriters. The representations contained in
Section 1 and the agreements contained in Sections 5, 7, 8 and 11(d) hereof
shall survive the termination of this Agreement including pursuant to Sections 9
or 11 hereof.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon the later of (i) when
you and the Company shall have received notification of the effectiveness
of the Registration Statement, or (ii) the execution of this Agreement.
Until this Agreement becomes effective as aforesaid, it may be terminated
by the Company by notifying you and the Selling Stockholders or by you by
notifying the Company and the
-33-
Attorney-in-Fact. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in
full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing
Date, as the case may be, if (A) any domestic or international event or act
or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, the market for the Company's
securities or securities in general; or (B) if trading on the New York
Stock Exchange or on the NASDAQ generally or with respect to securities of
the Company shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange or on the NASDAQ
by order of the New York Stock Exchange or the NASDAQ or by order of the
Commission or any other governmental authority having jurisdiction; or (C)
if a banking moratorium has been declared by a state or federal authority
or if any new restriction materially adversely affecting the distribution
of the Firm Shares or the Additional Shares, as the case may be, shall have
become effective; or (D) if a moratorium in foreign exchange trading by
major international banks or persons has been declared; or (E) if the
United States becomes engaged in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of a
national emergency or war by the United States; or (F) if there shall have
been such change in the market for the Company's securities or securities
in general or in political, financial or economic conditions, if the effect
of any such event as in your judgment makes it inadvisable to proceed with
the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Sections 9(b) or 11(b) hereof), or
if the sale of the Shares provided for herein is not consummated because
any condition to the obligations of the several Underwriters set forth
herein is not satisfied or because of any refusal, inability or failure on
the part of the Company or any Selling Stockholder to perform any agreement
herein or comply with any provision hereof, the Company and the Selling
Stockholders jointly and severally agree subject to demand by you, to
reimburse the Underwriters for all out-of-pocket expenses (including the
fees and expenses of their counsel), incurred by the several Underwriters
in connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
------
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed,
-34-
delivered, or telexed or telegraphed and confirmed in writing, to such
Underwriter c/o Bear, Xxxxxxx & Co., 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000,
Attention: Xxxxx X. Xxxx; if sent to the Company or any Selling Stockholder,
shall be mailed, delivered, or telegraphed and confirmed in writing, in the case
of the Company, to the Company, ________________________________, and, in the
case of any Selling Stockholder, to _____________________________.
13. Parties. You represent that you are authorized to act on behalf
-------
of the several Underwriters named in Schedule I hereto, and the Company and the
Selling Stockholders shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the Underwriters
when the same shall have been given by you on such behalf. This Agreement shall
inure solely to the benefit of, and shall be binding upon, the several
Underwriters, the Selling Stockholders and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York, but without regard to
principles of conflict of law.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
16. Jurisdiction of Disputes. The Company and the Selling
------------------------
Stockholders hereby submit to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
-35-
If the foregoing correctly sets forth the understanding among you, the
Company and the Selling Stockholders, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
THE COMPANY:
XXXXXX EXPLORATION COMPANY, a
Delaware corporation
By
---------------------------------
Xxxxx X. Xxxxxx,
President
SELLING STOCKHOLDERS:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
-36-
Accepted as of the date first above written.
BEAR, XXXXXXX & CO. INC.,
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXX INC.
BY BEAR, XXXXXXX & CO. INC.
By
-----------------------------
On behalf of themselves and the other several
Underwriters named in Schedule I hereto.
-37-
SCHEDULE I
Name of Underwriter Number of Firm Shares to be Purchased
------------------- -------------------------------------------------
(1) (2)
From the Company From the Selling Stockholders
---------------- -----------------------------
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxxx, Inc.
Total.......................
-38-
SCHEDULE II
Firm Shares to be sold by the Selling Stockholders
Percentage of Firm Number of Firm
Shares to be Sold Shares to be Sold
-------------------- -----------------
-39-
SCHEDULE III
Lockup List of Directors, Officers and Stockholders
-40-
