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EXHIBIT 1.1
Draft of November 21, 1996
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5,870,000 Shares
XXXXXXXX RESOURCES, INC.
Common Stock
UNDERWRITING AGREEMENT
________, 1996
XXXXX XXXXXX INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXXXX & CO., INC.
XXXXXX & XXXXXXX, INC.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxxxx Resources, Inc., a Nevada corporation (the "Company"),
proposes to issue and sell an aggregate of 4,000,000 shares of its common
stock, $0.50 par value per share, to the several Underwriters named in Schedule
II hereto (the "Underwriters") and the persons named in Schedule I hereto (the
"Selling Stockholders") propose to sell to the several Underwriters an
aggregate of 1,870,000 shares of common stock of the Company. The Company and
the Selling Stockholders are hereinafter sometimes referred to as the
"Sellers". The Company's common stock, $0.50 par value, is hereinafter
referred to as the "Common Stock" and the 4,000,000 shares of Common Stock to
be issued and sold to the Underwriters by the Company and the 1,870,000 shares
of Common Stock to be sold to the Underwriters by the Selling Stockholders are
hereinafter referred to as the "Firm Shares". The Company also proposes to
sell to the Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 880,000 shares (the "Additional Shares") of Common
Stock. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares". The Selling Stockholders named in Part A of
Schedule I hereto are hereinafter collectively referred to as the "D&O Selling
Stockholders" and the Selling Stockholders named in Part B of Schedule I hereto
are hereinafter collectively referred to as the "TCW Selling Stockholders".
The TCW Selling Stockholders named in Section 1. of Part B of Schedule I hereto
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are hereinafter collectively referred to as the "TCW Fund Selling Stockholders"
and the TCW Selling Stockholders named in Section 2. of Part B of Schedule I
hereto are hereinafter collectively referred to as the "TCW Managed Selling
Stockholders."
The Company and the Selling Stockholders wish to confirm as
follows their respective agreements with you (the "Representatives") and the
other several Underwriters on whose behalf you are acting, in connection with
the several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement,
including in each case a registration statement (if any) filed pursuant to Rule
462(b) under the Act increasing the size of the offering registered under the
Act. If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must
be declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term "Prospectus"
as used in this Agreement means the prospectus in the form included in the
Registration Statement, or, if the prospectus included in the Registration
Statement omits information in reliance on Rule 430A under the Act and such
information is included in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, the term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission, and as
such prospectus shall have been amended from time to time prior to the date of
the Prospectus. Any reference in this Agreement to the registration statement,
the Registration Statement, any Prepricing Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the documents which at the
time are incorporated by reference in the registration statement, the
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Registration Statement, any Prepricing Prospectus, the Prospectus, or any
amendment or supplement thereto.
2. Agreements to Sell and Purchase. Subject to such
adjustments as you may determine in order to avoid fractional shares, the
Company hereby agrees, subject to all the terms and conditions set forth
herein, to issue and sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $____________ per Share (the "purchase
price per share"), the number of Firm Shares which bears the same proportion to
the aggregate number of Firm Shares to be issued and sold by the Company as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Stockholders.
Subject to such adjustments as you may determine in order to
avoid fractional shares, each Selling Stockholder agrees, subject to all the
terms and conditions set forth herein, to sell to each Underwriter and, upon
the basis of the representations, warranties and agreements of the Company and
the Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter, severally and not jointly,
agrees to purchase from each Selling Stockholder at the purchase price per
share that number of Firm Shares which bears the same proportion to the number
of Firm Shares set forth opposite the name of such Selling Stockholder in
Schedule I hereto as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule II hereto (or such number of Firm Shares increased
as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares
to be sold by the Company and the Selling Stockholders.
The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 30th day after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading), up to an aggregate of
880,000 Additional Shares. Additional Shares may be purchased only for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Shares increased as set forth in Section 12 hereof)
bears to the aggregate number of Firm Shares.
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Certificates in transferable form for the Firm Shares which each
of the D&O Selling Stockholders agrees to sell pursuant to this Agreement have
been placed in custody with Xxxxxxxx Resources, Inc. (the "D&O Custodian") for
delivery under this Agreement pursuant to a Custody Agreement and Power of
Attorney (the "D&O Custody Agreement") executed by each of the D&O Selling
Stockholders appointing M. Xxx Xxxxxxx and Xxxxxx X. Xxxxx as agents and
attorneys-in-fact (the "D&O Attorneys-in-Fact"). Each D&O Selling Stockholder
agrees that (i) the Firm Shares represented by the certificates held in custody
pursuant to the D&O Custody Agreement are subject to the interests of the
Underwriters, the Company and each other Selling Stockholder, (ii) the
arrangements made by the D&O Selling Stockholders for such custody are, except
as specifically provided in the D&O Custody Agreement, irrevocable, and (iii)
the obligations of the D&O Selling Stockholders hereunder and under the Custody
Agreement shall not be terminated by any act of such D&O Selling Stockholder or
by operation of law, whether by the death or incapacity of any D&O Selling
Stockholder or the occurrence of any other event. If any D&O Selling
Stockholder shall die or be incapacitated or if any other event shall occur
before the delivery of the Firm Shares hereunder, certificates for the Firm
Shares of such D&O Selling Stockholder shall be delivered to the Underwriters
by the D&O Attorneys-in-Fact in accordance with the terms and conditions of
this Agreement and the D&O Custody Agreement as if such death or incapacity or
other event had not occurred, regardless of whether or not the D&O
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of
each of the D&O Selling Stockholders, to execute this Agreement and any other
documents necessary or desirable in connection with the sale of the Firm Shares
to be sold hereunder by such D&O Selling Stockholder, to make delivery of the
certificates for such Shares, to receive the proceeds of the sale of such Firm
Shares, to give receipts for such proceeds, to pay therefrom any expenses to be
borne by such D&O Selling Stockholder in connection with the sale and public
offering of such Firm Shares, to distribute the balance thereof to such D&O
Selling Stockholder, and to take such other action as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each D&O Attorney-in-Fact agrees to perform his duties under the D&O Custody
Agreement.
Certificates in transferable form for the Firm Shares which each
of the TCW Selling Stockholders agrees to sell pursuant to this Agreement have
been placed in custody with the Company (the "TCW Custodian") for delivery
under this Agreement pursuant to a Custody Agreement (the "TCW Custody
Agreement") executed by each of the TCW Fund Selling Stockholders and by Trust
Company of the West or TCW Asset Management Company, as the case may be, in
their capacity as custodian, trustee or investment manager (collectively,
"TCW"), on behalf of each of the TCW Managed Selling Stockholders, whereby each
TCW Fund Selling Stockholder and TCW, on behalf of each of the TCW Managed
Selling Stockholders agrees that the Firm Shares represented by the
certificates held in custody pursuant to the TCW Custody Agreement are subject
to the interests of the Underwriters, the Company and each other Selling
Stockholder hereunder.
3. Terms of Public Offering. The Sellers have been advised
by you that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon
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after the Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to
the Underwriters of and payment for the Firm Shares shall be made at the office
of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M.,
New York City time, on , 1996 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
among you, the Company, the D&O Attorneys-in-Fact and the TCW Selling
Stockholders.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the aforementioned
office of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
among you and the Company.
Certificates for the Firm Shares and for any Additional Shares to
be purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 9:30 A.M., New York City time, on
the second business day preceding the Closing Date or any Option Closing Date,
as the case may be. Such certificates shall be made available to you in New
York City for inspection and packaging not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date or the Option Closing
Date, as the case may be. The certificates evidencing the Firm Shares and any
Additional Shares to be purchased hereunder shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, against payment of
the purchase price therefor by wire transfer or certified or official bank
check or checks payable in same day funds to the order of the Company, the D&O
Attorneys-in-Fact and the TCW Selling Stockholders.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause
the Registration Statement or such post-effective amendment to become
effective as soon as possible and will advise you promptly and, if
requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become
effective.
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(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the
Registration Statement, any Prepricing Prospectus or the Prospectus or
for additional information; (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding
for such purpose; and (iii) within the period of time referred to in
paragraph (f) below, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any statement
of a material fact made in the Registration Statement or the Prospectus
(as then amended or supplemented) untrue or which requires the making of
any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a
material fact required by the Act or the regulations thereunder to be
stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus
(as then amended or supplemented) to comply with the Act or any other
law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(c) The Company will furnish to you, without charge (i)
four signed copies of the registration statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits to the registration statement, (ii) such
number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may
request, (iii) such number of copies of the Incorporated Documents,
without exhibits, as you may request, and (iv) four copies of the
exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus or, prior to the end of the period of time referred to in the
first sentence in subsection (f) below, file any document which, upon
filing becomes an Incorporated Document, of which you shall not
previously have been advised or to which, after you shall have received
a copy of the document proposed to be filed, you shall reasonably
object.
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such
quantities as you have requested, copies of each form of the Prepricing
Prospectus. The Company consents to the use, in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several
Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period
as in the opinion of counsel for the
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Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may request. The Company consents to the use
of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by
the several Underwriters and by all dealers to whom Shares may be sold,
both in connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If
during such period of time any event shall occur that in the judgment of
the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend
the Prospectus (or to file under the Exchange Act any document which,
upon filing, becomes an Incorporated Document) in order to comply with
the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof. In the event that the
Company and you, as Representatives of the several Underwriters, agree
that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Company will cooperate with you and with
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in order
to effect such registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction
where it is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be
audited, covering a twelve-month period commencing after the effective
date of the Registration Statement and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section
ll(a) of the Act.
(i) During the period of three years hereafter, the
Company will furnish to you (i) as soon as available, a copy of each
report of the Company mailed to stockholders or filed with the
Commission (other than registration statements on Form S-8 or Forms 3,
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4 and 5), and (ii) from time to time such other information concerning
the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise
than pursuant to the second paragraph of Section 12 hereof or by notice
given by you terminating this Agreement pursuant to Section 12 or
Section 13 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the
Company or the Selling Stockholders to comply with the terms or fulfill
any of the conditions of this Agreement, the Company agrees to reimburse
the Representatives for all out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the
sale of the Shares to be sold by it hereunder substantially in
accordance with the description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company
will timely file the Prospectus pursuant to Rule 424(b) under the Act
and will advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company
will not sell, contract to sell or otherwise dispose of any Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock, or grant any options or warrants to purchase Common Stock,
for a period of 120 days after the date of the Prospectus, without the
prior written consent of Xxxxx Xxxxxx Inc., other than shares of Common
Stock to be issued as a dividend on the outstanding shares of the
Company's Series 1995 Convertible Preferred Stock.
(n) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by
each of its current executive officers and directors.
(o) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor
will it take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(p) The Company will use its best efforts to have the
shares of Common Stock which it agrees to sell under this Agreement
listed, subject to notice of issuance, on the Nasdaq National Market on
or before the Closing Date.
6. Agreements of the Selling Stockholders. Each of the D&O
Selling Stockholders, each of the TCW Fund Selling Stockholders and TCW, on
behalf of each of the TCW
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Managed Selling Stockholders, as the case may be, agrees severally and not
jointly with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the
extent necessary to cause the registration statement or any
post-effective amendment thereto to become effective at the earliest
possible time.
(b) Such D&O Selling Stockholder and such TCW Fund
Selling Stockholder will pay all Federal and other taxes, if any on the
transfer or sale of the Firm Shares being sold by the D&O Selling
Stockholder and the TCW Fund Selling Stockholder, as the case may be, to
the Underwriters. TCW, on behalf of each of the TCW Managed Selling
Stockholders, agrees that the Underwriters will not be held liable for
Federal and other taxes, if any, on the transfer or sale of the Firm
Shares being sold by TCW, on behalf of the TCW Managed Selling
Stockholders, to the Underwriters.
(c) Such Selling Stockholder will do or perform all
things required to be done or performed by the Selling Stockholder prior
to the Closing Date to satisfy all conditions precedent to the delivery
of the Firm Shares pursuant to this Agreement.
(d) Such Selling Stockholder has executed or will
execute a "lock-up" letter as provided in Section 5(n) above and will
not sell, contract to sell or otherwise dispose of any Common Stock,
except for the sale of Firm Shares to the Underwriters pursuant to this
Agreement, prior to the expiration of 120 days after the date of the
Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.
except as provided in such letter and except that any individual D&O
Selling Stockholder may transfer shares of Common Stock to family trusts
for estate planning purposes or transfer shares as charitable
contributions as long as such family trusts or charities agree in
writing to be bound by the terms of the "lock-up" letter.
(e) Except as stated in this Agreement and in the
Prepricing Prospectus and the Prospectus, such Selling Stockholder will
not take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Firm Shares.
(f) Such D&O Selling Stockholder will advise you
promptly, and if requested by you, will confirm such advice in writing,
within the period of time referred to in Section 5(f) hereof, of any
change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations or of any
change in information relating to such Selling Stockholder or the
Company or any new information relating to the Company or relating to
any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of such Selling Stockholder that
suggests that any statement made in the Registration Statement or the
Prospectus (as then amended
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or supplemented, if amended or supplemented) is or may be untrue in any
material respect or that the Registration Statement or Prospectus (as
then amended or supplemented, if amended or supplemented) omits or may
omit to state a material fact or a fact necessary to be stated therein
in order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented, if amended or supplemented) in order to
comply with the Act or any other law.
(g) Such TCW Selling Stockholder will advise you
promptly, and if requested by you, will confirm such advice in writing,
within the period of time referred to in Section 5(f) hereof, of any
change in information relating to such TCW Selling Stockholder that
suggests that any statement made in the Registration Statement or the
Prospectus (as then amended or supplemented, if amended or supplemented)
is or may be untrue in any material respect or that the Registration
Statement or Prospectus (as then amended or supplemented, if amended or
supplemented) omits or may omit to state a material fact or a fact
necessary to be stated therein in order to make the statements therein
not misleading in any material respect, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented, if amended
or supplemented) in order to comply with the Act or any other law.
7. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the provisions of
the Act. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus.
(b) The Company and the transactions contemplated by
this Agreement meet the requirements for using Form S-3 under the Act.
The registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the prospectus and any
supplement or amendment thereto when filed with the Commission under
Rule 424(b) under the Act, complied or will comply in all material
respects with the provisions of the Act and will not at any such times
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and
warranty does not apply to statements in or omissions from the
registration statement or the prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through you
expressly for use therein.
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(c) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such document
was filed, when such amendment was filed), conformed in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder, any further Incorporated Documents so filed
will, when they are filed, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder; no such document when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(d) All the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the
Shares to be issued and sold by the Company have been duly authorized
and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar
rights; and the capital stock of the Company conforms to the description
thereof in the registration statement and the prospectus.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Nevada
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so
to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect").
(f) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report
on Form 10-K which is incorporated by reference into the Registration
Statement. Each Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so
to register or qualify does not have a Material Adverse Effect; all the
outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by
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the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.
(g) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the
Company or any of the Subsidiaries, or to which the Company or any of
the Subsidiaries, or to which any of their respective properties is
subject, that are required to be described in the Registration Statement
or the Prospectus but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required by the
Act or the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is
in violation of its certificate or articles of incorporation or by-laws,
or other organizational documents, or of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound.
(i) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor
the consummation by the Company of the transactions contemplated hereby
(i) requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may be required for the registration of the Shares under the Act and the
Exchange Act and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound,
or violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of their respective properties, or will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject.
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(j) The accountants, Xxxxxx Xxxxxxxx LLP, who have
certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are independent
public accountants as required by the Act.
(k) Xxx Xxxxxxx and Associates, Inc. are independent
petroleum consultants with respect to the Company and the Subsidiaries.
(l) The consolidated historical and pro forma financial
statements, together with related schedules and notes, included or
incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), comply as to form
in all material respects with the requirements of the Act. Such
historical financial statements present fairly the consolidated
financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein. Such pro forma financial
statements have been prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
the historical and proposed transactions contemplated by the Prospectus
and this Agreement. The other financial and statistical information and
data included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and the
Subsidiaries.
(m) The execution and delivery of, and the performance
by the Company of its obligations under, this Agreement have been duly
and validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws or principles of public policy.
(n) Except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), subsequent
to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole, and there
has not been any change in the capital stock, or material increase in
the short-term debt or long-term debt, of the Company and the
Subsidiaries taken as a whole, or any material adverse change, or any
development involving or which may reasonably be
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expected to involve, a prospective material adverse change, in the
condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(o) The Company and each of the Subsidiaries has (i)
generally satisfactory title to all its interests in its oil and gas
properties, title investigations having been carried out by the Company
and each of the Subsidiaries in accordance with the general practice in
the oil and gas industry, (ii) good and marketable title in fee simple
to all other real property owned by it and (iii) good and marketable
title to all personal property owned by it, in each case free and clear
of all liens, encumbrances, claims, security interests, subleases and
defects except such as are described in the Registration Statement or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company and the Subsidiaries; and any real property and buildings
held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to
be made of such property and buildings of the Company and the
Subsidiaries.
(p) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Shares, will not distribute any offering material in
connection with the offering and sale of the Shares other than the
Registration Statement, the Prepricing Prospectus, the Prospectus or
other materials, if any, permitted by the Act.
(q) The Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own its
respective properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be
set forth in the Prospectus; the Company and each of the Subsidiaries
has fulfilled and performed all its material obligations with respect to
such permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set forth
in the Prospectus; and, except as described in the Prospectus, none of
such permits contains any restriction that is materially burdensome to
the Company or any of the Subsidiaries.
(r) None of the Company or the Subsidiaries has
violated any environmental safety or similar law or regulation
applicable to its business relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), lacks any permits,
licenses or other approvals required of them under applicable
Environmental Laws to own, lease and operate their respective properties
and to conduct their business in the manner described in the Prospectus
as amended or supplemented, is violating any terms and conditions of any
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15
such permit, license or approval or has permitted to occur any event
that allows, or after notice or lapse of time would allow, revocation or
termination of any such permit, license or approval or result in any
other impairment of their rights thereunder, which in each case would
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole.
(s) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(t) To the Company's knowledge, neither the Company nor
any of its Subsidiaries nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(u) The Company and each of the Subsidiaries have filed
all material tax returns required to be filed, which returns are
complete and correct in all material respects, and neither the Company
nor any Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect
thereto.
(v) Except as disclosed in the Registration Statement,
no holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(w) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by them or
any of them or necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing.
8. Representations and Warranties of the Selling
Stockholders. Each D&O Selling Stockholder, each TCW Fund Selling
Stockholder and TCW, with respect to each of the TCW Managed Selling
Stockholders, as the case may be, represents and warrants severally and
not jointly to each Underwriter that:
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16
(a) Such Selling Stockholder now has, and on the
Closing Date will have, good title to the Firm Shares to be sold by such
Selling Stockholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any
restriction on transfer.
(b) Such D&O Selling Stockholder and such TCW Fund
Selling Stockholder and TCW, on behalf of such TCW Managed Selling
Stockhoder, now has, and on the Closing Date will have, full legal
right, power and authorization, and any approval required by law, to
sell, assign transfer and deliver such Firm Shares in the manner
provided in this Agreement, and upon delivery of and payment for such
Firm Shares hereunder, the several Underwriters will acquire good title
to such Shares free and clear of any lien, claim, security interest, or
other encumbrance.
(c) This Agreement and the D&O Custody Agreement or the
TCW Custody Agreement, as the case may be, have been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and
are the valid and binding agreements of such D&O Selling Stockholder and
such TCW Fund Selling Stockholder and TCW, on behalf of such TCW Managed
Selling Stockhoder, enforceable against such D&O Selling Stockholder and
such TCW Fund Selling Stockholder and TCW, on behalf of such TCW Managed
Selling Stockhoder, in accordance with their terms.
(d) Neither the execution and delivery of this
Agreement or the D&O Custody Agreement or the TCW Custody Agreement, as
the case may be, by or on behalf of such D&O Selling Stockholder or such
TCW Fund Selling Stockholder nor the consummation of the transactions
herein or therein contemplated by or on behalf of such D&O Selling
Stockholder or such TCW Fund Selling Stockholder requires any consent,
approval, authorization or order of, or filing or registration with, any
court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required under the Act
and the Exchange Act or such as may be required under state securities
or Blue Sky laws governing the purchase and distribution of the Shares)
or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such D&O Selling Stockholder or
such TCW Fund Selling Stockholder is a party or by which such D&O
Selling Stockholder or such TCW Fund Selling Stockholder is or may be
bound or to which any of such D&O Selling Stockholder's or such TCW Fund
Selling Stockholder's property or assets is subject, nor will such
action result in any violation of the certificate or articles of
incorporation or bylaws or other organizational instrument of such D&O
Selling Stockholder or such TCW Fund Selling Stockholder, if applicable,
or any statute, law, rule, regulation, ruling, judgment, injunction,
order or decree applicable to such D&O Selling Stockholder or such TCW
Fund Selling Stockholder or to any property or assets of such D&O
Selling Stockholder or such TCW Fund Selling Stockholder.
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(e) Neither the execution and delivery of this
Agreement or the TCW Custody Agreement by TCW on behalf of such TCW
Managed Selling Stockholder nor the consummation of the transactions
herein or therein contemplated by TCW on behalf of such TCW Managed
Selling Stockholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required under the Act and the Exchange Act or
such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Shares) or conflicts or
will conflict with or constitutes or will constitute a breach of, or
default under, or violates or will violate, any agreement, indenture or
other instrument to which TCW is a party or by which TCW is or may be
bound or to which any of TCW's property or assets is subject, nor will
such action result in any violation of the certificate or articles of
incorporation or bylaws or other organizational instrument of TCW, or
any statute, law, rule, regulation, ruling, judgment, injunction, order
or decree applicable to TCW or to any property or assets of TCW.
(f) The Registration Statement and the Prospectus,
insofar as they relate to such Selling Stockholder, do not and will not
contain 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 not misleading.
(g) Such D&O Selling Stockholder does not have any
knowledge or any reason to believe that the Registration Statement or
the Prospectus (or any amendment or supplement thereto) contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(h) Such Selling Stockholder is not prompted to sell
the Shares to be sold by such Selling Stockholder hereunder by any
information concerning the Company or any Subsidiary which is not set
forth in the Prospectus.
(i) The representations and warranties of such Selling
Stockholder in the D&O Custody Agreement or the TCW Custody Agreement,
as the case may be, are, and on the Closing Date will be, true and
correct.
(j) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Firm Shares, except
for the lock-up arrangements described in the Prospectus.
9. Indemnification and Contribution.
(a) The Company and each D&O Selling Stockholder,
jointly and severally, agree to indemnify and hold harmless each of you
and each other Underwriter and
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each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement
or the Prospectus or in any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information relating to such Underwriter furnished
in writing to the Company by or on behalf of any Underwriter through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any
Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising
from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person
within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely
basis to permit such delivery or sending; provided further that each D&O
Selling Stockholder's aggregate liability under this Section 9(a) shall
be limited to an amount equal to the proceeds (after deducting
Underwriter's discount but before deducting expenses) received by such
D&O Selling Stockholder from the sale of Firm Shares pursuant to this
Agreement. The foregoing indemnity agreement shall be in addition to
any liability which the Company or any D&O Selling Stockholder may
otherwise have.
Notwithstanding the joint and several nature of the obligations
of the Company and the D&O Selling Stockholders under this Section 9(a),
the Underwriters agree that, in the case of any loss, claim, damage,
liability or expense for which they may claim indemnification hereunder,
they will not seek to enforce their right of indemnification against the
D&O Selling Stockholders unless (i) the Underwriters shall have first
delivered a written demand for indemnification to the Company (to the
extent that such a written demand is permitted to be delivered under
applicable law and it is reasonably practicable for the Underwriters to
deliver the same) and (ii) at any time after the expiration of 60 days
following the delivery of such notice, the Company shall have failed or
refused to comply with any of its obligations in respect of the right of
indemnification granted to the Underwriters hereunder insofar as it
applies to any loss, claim, damage, liability or expense to which such
written demand relates; provided, however, that the provisions of this
paragraph shall not prohibit (a) the delivery to the D&O Selling
Stockholders of a notice of commencement of any action or a notice of
assertion of any claim, including any notice contemplated by Section
9(b) hereof or (b) the taking of any other action (including,
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but not limited to, the commencement of any action against, or the
service of process on, the D&O Selling Stockholders) that is necessary,
in the judgment of the Underwriters based on the advice of their
counsel, to preserve or protect the right of indemnification granted by
the D&O Selling Stockholders to the Underwriters in respect of any loss,
claim, damage, liability or expense (including, but not limited to, any
action required as a result of the application of any period of
limitations or repose or any procedural or other rules relating to the
joinder of necessary parties) in the event that the Company fails to
observe or comply with any of its obligations in respect thereof.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Company or any
Selling Stockholder, such Underwriter or such controlling person shall
promptly notify the parties against whom indemnification is being sought
(the "indemnifying parties"), and such indemnifying parties shall assume
the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter
or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties have failed to assume the defense and employ counsel, or (iii)
the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling
person and the indemnifying parties and such Underwriter or such
controlling person shall have been advised by its counsel that
representation of such indemnified party and any indemnifying party by
the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same
counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party shall not
have the right to assume the defense of such action, suit or proceeding
on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection
with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only
one separate firm of attorneys (in addition to any local counsel) at any
time for all such Underwriters and controlling persons not having actual
or potential differing interests with you or among themselves, which
firm shall be designated in writing by Xxxxx Xxxxxx Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such
action, suit or proceeding effected without their written consent, but
if settled with such written consent, or if there be a final judgment
for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any
such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
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(c) Each TCW Fund Selling Stockholder and TCW, with
respect to each TCW Managed Selling Stockholder, agrees, severally and
not jointly, to indemnify and hold harmless each of you and each other
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 Exchange
Act, the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the D&O Selling
Stockholders to each Underwriter, but only with respect to the
information furnished in writing by or on behalf of such TCW Selling
Stockholder expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. Notwithstanding the foregoing, (i) each TCW Fund Selling
Stockholder's aggregate liability under this Section 9(c) shall be
limited to an amount equal to the proceeds (after deducting
Underwriter's discount but before deducting expenses) received by such
TCW Fund Selling Stockholder from the sale of Firm Shares pursuant to
this Agreement and (ii) TCW's aggregate liability for each TCW Managed
Selling Stockholder under this Section 9(c) shall be limited to an
amount equal to the proceeds (after deducting Underwriter's discount but
before deducting expenses) received by such TCW Managed Selling
Stockholder from the sale of Firm Shares pursuant to this Agreement. If
any action, suit or proceeding shall be brought against any Underwriter,
any such controlling person of any Underwriter, the Company, any of its
directors, any such officer, or any such controlling person of the
Company, based on the Registration Statement, the Prospectus or any
Prepricing Prospectus or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any TCW Fund Selling
Stockholder or TCW, with respect to any TCW Managed Selling Stockholder,
pursuant to this paragraph (c), such TCW Selling Stockholder or TCW,
with respect to any TCW Managed Selling Stockholder, as the case may be,
shall have the rights and duties given to the Company by paragraph (b)
above (except that if the Company shall have assumed the defense thereof
such TCW Selling Stockholder or TCW, with respect to any TCW Managed
Selling Stockholder, as the case may be, shall not be required to do so,
but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such TCW
Selling Stockholder's or TCW's, with respect to any TCW Managed Selling
Stockholder, as the case may be, expense), and each Underwriter, each
such controlling person of any Underwriter, the Company, its directors,
any such officer, and any such controlling person of the Company shall
have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any
liability which any TCW Selling Stockholder may otherwise have.
(d) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each Selling Stockholder, and any
person who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Selling Stockholders to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or
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on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or
any amendment or supplement thereto. If any action, suit or proceeding
shall be brought against the Company, any of its directors, any such
officer, any Selling Stockholder, or any such controlling person based
on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this
paragraph (d), such Underwriter shall have the rights and duties given
to the Company by paragraph (b) above (except that if the Company shall
have assumed the defense thereof such Underwriter shall not be required
to do so, but may employ separate counsel therein and participate in the
defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such
officer, the Selling Stockholders, and any such controlling person shall
have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any
liability which any Underwriter may otherwise have.
(e) If the indemnification provided for in this Section
9 is unavailable to an indemnified party under paragraphs (a), (c) or
(d) hereof in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the
other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions
that 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 shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters
shall have purchased any Additional Shares hereunder, any determination
of the relative benefits received by the Company, the Selling
Stockholders or the Underwriters from the offering of the Shares shall
include the net proceeds (before deducting expenses) received by the
Company and the Selling Stockholders, and the underwriting discounts and
commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective
amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates
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to information supplied by the Company or the Selling Stockholders on
the one hand or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. TCW will contribute any
and all amounts due by any TCW Managed Selling Stockholder pursuant to
this Section 9(e).
(f) The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by a pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any
claim or defending any such action, suit or proceeding. Notwithstanding
the provisions of this Section 9, (i) no Underwriter shall be required
to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (ii) no Selling
Stockholder (nor TCW, on behalf of the TCW Managed Stockholders) shall
be required to contribute any amount in excess of the proceeds (after
deducting Underwriter's discount but before deducting expenses) received
by such Selling Stockholder from the sale of Firm Shares pursuant to
this Agreement. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 9 are several in proportion to the respective numbers of
Firm Shares set forth opposite their names in Schedule II hereto (or
such numbers of Firm Shares increased as set forth in Section 12 hereof)
and not joint. The TCW Selling Stockholders' and TCW's, on behalf of
any TCW Managed Selling Stockholder, obligations to contribute pursuant
to this Section 9 are several in the same proportion as the number of
Firm Shares sold by them hereunder bear to the total number of Shares
sold hereunder and are not joint.
(g) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
(h) Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to indemnification
or contribution under this Section 9 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
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liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 9 and the representations and
warranties of the Company and the Selling Stockholders set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or the Selling Stockholders or any person
controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter,
or to the Company, its directors or officers, or any person controlling
the Company, or to any Selling Stockholder or any person controlling any
Selling Stockholder, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before the
offering of the Shares may commence, the registration statement or such
post-effective amendment shall have become effective not later than 5:30
P.M., New York City time, on the date hereof, or at such later date and
time as shall be consented to in writing by you, and all filings, if
any, required by Rules 424 and 430A under the Act shall have been timely
made; no stop order suspending the effectiveness of the registration
statement shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the
registration statement or the prospectus or otherwise) shall have been
complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition (financial
or other), business, properties, net worth, or results of operations of
the Company or the Subsidiaries not contemplated by the Prospectus,
which in your opinion, as Representatives of the several Underwriters,
would materially adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Company or any officer
or director of the Company or any Selling Stockholder which makes any
statement made in the Prospectus untrue or which, in the opinion of the
Company and its counsel or the Underwriters and their counsel, requires
the making of any addition to or change in the Prospectus in order to
state a material fact required by the Act or any other law to be stated
therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, as Representatives of the
several Underwriters, materially adversely affect the market for the
Shares.
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(c) You shall have received on the Closing Date, an
opinion of Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional Corporation),
counsel for the Company and the D&O Selling Stockholders, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws
of the State of Nevada with full corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), and is duly registered
and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify
does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries taken as a
whole;
(ii) Each of the Subsidiaries is a corporation
duly incorporated and validly existing in good standing under the
laws of the jurisdiction of its organization, with full corporate
power and authority to own, lease, and operate its properties and
to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement
thereto); and all the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, to
the best knowledge of such counsel free and clear of any security
interest, lien, adverse claim, equity or other encumbrance except
as disclosed in the Registration Statement;
(iii) The authorized and outstanding capital stock
of the Company is as set forth under the caption "Capitalization"
in the Prospectus; and the authorized capital stock of the
Company conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
(iv) All the shares of capital stock of the
Company outstanding prior to the issuance of the Shares to be
issued and sold by the Company hereunder, have been duly
authorized and validly issued, and are fully paid and
nonassessable;
(v) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized
and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable and free of any
preemptive, or to the best knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company;
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(vi) The form of certificates for the Shares
conforms to the requirements of the General Corporation Law of
the State of Nevada;
(vii) The Registration Statement and all
post-effective amendments, if any, have become effective under
the Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and any required filing
of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(viii) The Company has corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as
provided herein;
(ix) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by Federal or
state securities laws or principles of public policy and subject
to the qualification that the enforceability of the Company's
obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and by
general equitable principles;
(x) To the best of such counsel's knowledge,
neither the Company nor any of the Subsidiaries is in violation
of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or is in default in
the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other
evidence of indebtedness, except as may be disclosed in the
Prospectus;
(xi) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement,
compliance by the Company with the provisions hereof nor
consummation by the Company of the transactions contemplated
hereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of
their respective properties is bound that is an exhibit to the
Registration Statement or to any Incorporated Document, or is
otherwise known to such counsel to be material to the Company and
the Subsidiaries taken as a whole (collectively the "Material
Agreements") or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries under such Material Agreements
in each case except for such conflicts,
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breaches, defaults, liens, charges or encumbrances that would not
have a Material Adverse Effect, nor will any such action result
in any violation of the provisions of the certificate or articles
of incorporation or bylaws of the Company or any of the
Subsidiaries or of any existing law, regulation, ruling (assuming
compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such
counsel, applicable to the Company, the Subsidiaries or any of
their respective properties;
(xii) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency,
or official is required on the part of the Company (except as
have been obtained under the Act and the Exchange Act, the Nasdaq
National Market listing and filings with the National Association
of Securities Dealers, Inc. or such as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of
the Shares to the Underwriters as contemplated by this Agreement;
(xiii) The Registration Statement and the
Prospectus and any supplements or amendments thereto (except for
the financial statements and the notes thereto and the schedules
and other financial and statistical data and reports included
therein or omitted therefrom, as to which such counsel need not
express any opinion) comply as to form in all material respects
with the requirements of the Act;
(xiv) Each of the Incorporated Documents (except
for the financial statements and the notes thereto and the
schedules and other financial and statistical data and reports
included therein or omitted therefrom, as to which counsel need
not express any opinion) complies as to form in all material
respects with the Exchange Act and the rules and regulations of
the Commission thereunder;
(xv) To the best knowledge of such counsel, (A)
other than as described or contemplated in the Registration
Statement or Prospectus (or any supplement thereto), there are no
legal or governmental proceedings pending or threatened against
the Company or any of the Subsidiaries, or to which the Company
or any of the Subsidiaries, or any of their property, is subject,
which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto) and (B)
there are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(xvi) To the best knowledge of such counsel,
neither the Company nor any of the Subsidiaries is in violation
of any law (including, without limitation,
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any Environmental Laws), ordinance, administrative or
governmental rule or regulation applicable to the Company or any
of the Subsidiaries or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of the
Subsidiaries except for such violations which in the aggregate
would not have a Material Adverse Effect;
(xvii) To the best knowledge of such counsel, no
holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of
the Company except as disclosed in the Registration Statement.
(xviii) The statements in the Registration
Statement and Prospectus under the captions "Risk Factors -
Government Regulation," "Business and Properties - Regulation,"
and "Description of Capital Stock," insofar as they are
descriptions of contracts, agreements or other legal documents,
or refer to statements of law or legal conclusions, are accurate
and present fairly the information required to be shown;
(xix) This Agreement and the D&O Custody Agreement
have each been duly executed and delivered by or on behalf of
each of the D&O Selling Stockholders and are valid and binding
agreements of each D&O Selling Stockholder enforceable against
each D&O Selling Stockholder in accordance with their terms,
except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that
the enforceability of the D&O Selling Stockholder's obligations
hereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating
to or affecting creditors' rights generally and by general
equitable principles;
(xx) To the knowledge of such counsel, each D&O
Selling Stockholder has full power and authorization, and any
approval required by law, to sell, assign, transfer and deliver
good title to the Firm Shares which such D&O Selling Stockholder
has agreed to sell pursuant to this Agreement;
(xxi) To the knowledge of such counsel, the
execution and delivery of this Agreement and the D&O Custody
Agreement by the D&O Selling Stockholders and the consummation of
the transactions contemplated hereby and thereby will not
conflict with, violate, result in a breach of or constitute a
default under the terms or provisions of any agreement,
indenture, mortgage or other instrument to which any D&O Selling
Stockholder is a party or by which any of them or any of their
assets or property is bound, or any court order or decree or any
law, rule, or regulation applicable to any D&O Selling
Stockholder or to any of the property or assets of any D&O
Selling Stockholder;
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(xxii) Upon delivery of the Firm Shares by the D&O
Selling Stockholders pursuant to this Agreement and payment
therefor as contemplated herein the Underwriters will acquire
good title to such Firm Shares free and clear of any lien, claim,
security interest, or other encumbrance, restriction on transfer
or other defect in title; and
(xxiii) Although counsel has not undertaken, except
as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the
accuracy or completeness of the statements in the Registration
Statement, such counsel has participated in the preparation of
the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and
discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused
them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement
became effective, or the Prospectus, as of its date and as of the
Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that any
amendment or supplement to the Prospectus, as of its respective
date, and as of the Closing Date or the Option Closing Date, as
the case may be, contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and
other financial and statistical data and reports included in or
omitted from the Registration Statement or the Prospectus or
any Incorporated Document).
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the States of New York, Delaware or Texas, provided that (1) each such local
counsel is acceptable to the Representatives, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Representatives and is, in form and substance satisfactory to
them and their counsel, and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date, an
opinion of Xxxxx X. Xxxxxxxxxx, Vice President and Associate General
Counsel of TCW, counsel for the TCW Selling Stockholders, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
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(i) This Agreement and the TCW Custody Agreement
have each been duly executed and delivered by or on behalf of
each of the TCW Fund Selling Stockholders and are valid and
binding obligations of each TCW Fund Selling Stockholder; this
Agreement and the TCW Custody Agreement have each been duly
executed and delivered by TCW, on behalf of each of the TCW
Managed Selling Stockholders, and is the valid and binding
obligation of TCW;
(ii) Each TCW Fund Selling Stockholder has full
legal right, power and authorization, and any approval required
by law, to sell, assign, transfer and deliver good title to the
Firm Shares which such TCW Fund Selling Stockholder has agreed to
sell pursuant to this Agreement; TCW has full legal right, power
and authorization, and any approval required by law, to sell,
assign, transfer and deliver good title to the Firm Shares which
TCW has agreed shall be sold by the TCW Managed Selling
Stockholders pursuant to this Agreement;
(iii) The execution and delivery of this Agreement
and the TCW Custody Agreement by the TCW Fund Selling
Stockholders and the consummation of the transactions
contemplated hereby and thereby will not conflict with, violate,
result in a breach of or constitute a default under the terms or
provisions of any agreement, indenture, mortgage or other
instrument known to such counsel to which any TCW Fund Selling
Stockholder is a party or by which any of them or any of their
assets or property is bound; nor will any such action result in
any violation of the certificate or articles of incorporation or
bylaws or other organizational instrument of any of the TCW Fund
Selling Stockholders, if applicable, or any court order or decree
known to such counsel, or any law, rule, or regulation applicable
to any TCW Fund Selling Stockholder or to any of the property or
assets of any TCW Fund Selling Stockholder;
(iv) The execution and delivery of this Agreement
and the TCW Custody Agreement by TCW, with respect to the TCW
Managed Selling Stockholders, and the consummation of the
transactions contemplated hereby and thereby will not conflict
with, violate, result in a breach of or constitute a default
under the terms or provisions of any agreement, indenture,
mortgage or other instrument known to such counsel to which TCW
is a party or by which it or any of its assets or property is
bound; nor will any such action result in any violation of the
certificate or articles of incorporation or bylaws or other
organizational instrument of TCW, or any court order or decree
known to such counsel, or any law, rule, or regulation applicable
to TCW or to any of the property or assets of any TCW; and
(v) In rendering his opinion as aforesaid,
counsel may rely upon an opinion or opinions, dated the Closing
Date, of other counsel retained by them or the Company as to laws
of any jurisdiction other than the United States or the States of
New York and California, provided that (1) each such local
counsel is acceptable
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to the Representatives, (2) such reliance is expressly authorized
by each opinion so relied upon and a copy of each such opinion is
delivered to the Representatives and is, in form and substance
satisfactory to them and their counsel, and (3) counsel shall
state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
(e) You shall have received on the Closing Date, an
opinion of Milbank, Tweed, Xxxxxx & XxXxxx, counsel for the TCW Selling
Stockholders, dated the Closing Date and addressed to you, as Representatives
of the several Underwriters, to the effect that:
(i) Upon delivery of the Firm Shares to be sold
by the TCW Selling Stockholders with all necessary endorsements
in accordance with the terms of this Agreement, and assuming the
Underwriters are acquiring such Firm Shares in good faith without
notice of any adverse claim, the Underwriters will be the owners
of such Firm Shares, free and clear of any adverse claim.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, dated the Closing Date, of other counsel retained by them
or the Company as to laws of any jurisdiction other than the United States or
the States of New York and California, provided that (1) each such local
counsel is acceptable to the Representatives, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Representatives and is, in form and substance satisfactory to
them and their counsel, and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
(f) You shall have received on the Closing Date an
opinion of Xxxxx & Xxxxx, L.L.P., counsel for the Underwriters, dated
the Closing Date and addressed to you, as Representatives of the several
Underwriters, with respect to the matters referred to in clauses (v)
(solely as to preemptive rights arising by operation of law or under the
charter or by-laws of the Company), (vii), (ix), (xiii) and (xxiii)
(exclusive of the Incorporated Documents) of the foregoing paragraph (c)
and such other related matters as you may request.
(g) You shall have received letters addressed to you,
as Representatives of the several Underwriters, and dated the date
hereof and the Closing Date from Xxxxxx Xxxxxxxx LLP, independent
certified public accountants, substantially in the forms heretofore
approved by you.
(h) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission at or prior to the Closing Date;
(ii) there shall not have been any change in the capital stock of the
Company nor any material increase in the short-term or long-term debt of
the Company (other than in the ordinary course of business) from that
set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); (iii)
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there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole; (iv) the Company and the Subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the
date hereof and on and as of the Closing Date as if made on and as of
the Closing Date, and you shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(h) and in
Section 10(i) hereof.
(i) The Company shall not have failed at or prior to
the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied
with by it hereunder at or prior to the Closing Date.
(j) All the representations and warranties of the
Selling Stockholders contained in this Agreement shall be true and
correct on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by or on behalf of the
Selling Stockholders to the effect set forth in this Section 10(j) and
in Section 10(k) hereof.
(k) The Selling Stockholders shall not have failed at
or prior to the Closing Date to have performed or complied with any of
their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
(l) Prior to the Closing Date the shares of Common
Stock which the Company agrees to sell pursuant to this Agreement shall
have been listed, subject to notice of issuance, on the Nasdaq National
Market (the "NMS Listing").
(m) You shall have received a letter addressed to you
and dated the date hereof from Xxx Xxxxxxx and Associates, Inc.,
independent petroleum consultants, substantially in the form heretofore
approved by you.
(n) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall
have requested.
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All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you.
Any certificate or document signed by any officer of the Company
or any Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (c) through (i)
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs (c) and (e) shall be revised to reflect the sale of Additional
Shares.
11. Expenses. The Company agrees to pay the following costs
and expenses and all other costs and expenses incident to the performance by it
and the Selling Stockholders of their obligations hereunder: (i) the
preparation, printing or reproduction, and filing with the Commission of the
registration statement (including financial statements and exhibits thereto),
each Prepricing Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the registration statement, each Prepricing Prospectus, the
Prospectus, the Incorporated Documents, and all amendments or supplements to
any of them, as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the
Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the NMS Listing of the Shares; (vi) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholders.
12. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement
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is executed and delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before the offering
of the Shares may commence, when notification of the effectiveness of the
registration statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company and the
Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject
to termination in your absolute discretion, without liability on the part of
any Underwriter to the Company or any Selling Stockholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a
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general moratorium on commercial banking activities in New York or Texas shall
have been declared by either federal or state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States
is such as to make it, in your judgment, impracticable or inadvisable to
commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to enforce contracts
for the resale of the Shares by the Underwriters. Notice of such termination
may be given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements
set forth in the last paragraph on the cover page, the stabilization and
passive market making legends on the inside cover page, and the statements in
the first, third and sixth paragraphs under the caption "Underwriting" in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters through you as such information
is referred to in Sections 7(b) and 9 hereof.
15. Information Furnished by the TCW Selling Stockholders.
The information set forth under the captions (i) "Pro Forma Financial
Information - Preferred Stock Conversions" relating to the conversion of the
Company's Series 1995 Convertible Preferred Stock and (ii) "Principal and
Selling Stockholders" relating to the TCW Selling Stockholders in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the TCW Selling Stockholders as such information
is referred to in Sections 6, 8 and 9 hereof.
16. Miscellaneous. Except as otherwise provided in Sections
5, 12 and 13 hereof, notice given pursuant to any provision of this Agreement
shall be in writing and shall be delivered (i) if to the Company, at the office
of the Company at Xxxxxxxx Resources, Inc., 0000 XXX Xxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000, Attention: M. Xxx Xxxxxxx, President and Chief Executive
Officer; (ii) if to the D&O Selling Stockholders, at Xxxxxxxx Resources, Inc.,
0000 XXX Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: M. Xxx Xxxxxxx,
President and Chief Executive Officer; or (iii) if to the TCW Selling
Stockholders, at Trust Company of the West, 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx or Xxxxxx X. Xxxxxxxx;
or (iv) if to you, as Representatives of the several Underwriters, care of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Selling Stockholders, the Company, its directors and
officers, and the other controlling persons referred to in Section 9 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Shares in his status as such purchaser.
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17. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
XXXXXXXX RESOURCES, INC.
By:
-----------------------------------------
M. Xxx Xxxxxxx
President, Chief Executive
Officer and Director
Each of the D&O Selling Stockholders named
in Schedule I hereto
By:
-----------------------------------------
Attorney-in-Fact
By:
-----------------------------------------
Attorney-in-Fact
Each of the TCW Selling Stockholders named
in Schedule I hereto
TRUST COMPANY OF THE WEST, a California
trust company, as Trustee of TCW Debt and
Royalty Fund IVA
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
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TRUST COMPANY OF THE WEST, a California
trust company, in its capacities as
Investment Manager pursuant to the
Investment Management Agreement dated as of
June 6, 1988 between General Xxxxx, Inc. and
the Trust Company of the West and as
Custodian pursuant to the Custody Agreement
dated as of February 6, 1989 among General
Xxxxx, Inc., the Trust Company of the West
and State Street Bank and Trust Company, as
trustee
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager pursuant
to the Investment Management and Custody
Agreement dated as of June 1, 1993 with The
Trustees of Columbia University in the City
of New York and Trust Company of the West
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager pursuant
to the Investment Management Agreement dated
as of March 1, 1993 with The Board of
Trustees of the Xxxxxx Xxxxxxxx Junior
University
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
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TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
June 8, 1993 between the Xxxxxx Trusts
Limited Partnership X, Xxxxxx Trust and
Savings Bank and TCW Asset Management
Company
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
June 8, 1993, between the Xxxx X. Xxxxxx
Charitable Trusts Partnership, Xxxxxx Trust
and Savings Bank and TCW Asset Management
Company
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
December 31, 1993 with Delta Air Lines, Inc.
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
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TCW DEBT AND ROYALTY FUND IVB, a California
Limited Partnership
By: TCW Asset Management Company, a
California corporation, General
Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TCW DEBT AND ROYALTY FUND IVC, California
Limited Partnership
By: TCW Asset Management Company, a
California corporation, General
Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
TRUST COMPANY OF THE WEST, as Custodian
pursuant to the Investment Management and
Custody Agreement dated as of April 26, 1994
among The City and County Employees'
Retirement System of San Francisco, TCW
Asset Management Company and Trust Company
of the West
By:
------------------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
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Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXXXX & CO., INC.
XXXXXX & XXXXXXX, INC.
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:
----------------------------------------------
Managing Director
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SCHEDULE I
XXXXXXXX RESOURCES, INC.
Number of
PART A - D&O SELLING STOCKHOLDERS Firm Shares
--------------------------------- -----------
M. Xxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,239
Xxxxxx X. Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Xxxxxxxx X. Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Xxxxxx X. Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,000
Xxxxx X. Xxxxxx, Xx. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
PART B - TCW SELLING STOCKHOLDERS
Section 1. TCW Fund Selling Stockholders
Trust Company of the West, as Trustee of the TCW Debt and Royalty
Fund IVA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,828
Trust Company of the West, as Custodial Agent for TCW Debt and
Royalty Fund IVC . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,232
Trust Company of the West, as Custodial Agent for TCW Debt and
Royalty Fund IVB . . . . . . . . . . . . . . . . . . . . . . . . . . . 266,708
Section 2. TCW Managed Selling Stockholders
Xxxxxx Trust and Savings Bank, as Custodian for the Xxxxxx Trusts Limited
Partnership X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,190
Xxxxxx Trust and Savings Bank, as Custodian for the Xxxx X. Xxxxxx
Charitable Trusts Partnership . . . . 33,276
Trust Company of the West, as Custodian for Columbia University . . . . . . . . 166,379
The Chase Manhattan Bank, as Custodian for The Trustees of The Xxxxxx
Xxxxxxxx Junior University . . . . . . . . . . . . . . . . . . . . . . . 166,380
Trust Company of the West, as Custodian for the City and County
Employees Retirement System of San Francisco . . . . . . . . . . . . . . 38,026
Trust Company of the West, as Investment Manager for General
Xxxxx, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476,190
Xxxxxx Trust and Savings Bank, as Trustee for Delta Air Lines, Inc. . . . . . . 66,552
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,870,000
=========
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SCHEDULE II
XXXXXXXX RESOURCES, INC.
Number of
Firm Shares
-----------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxx Xxxxx & Associates, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bear, Xxxxxxx & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxxxxxx & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxx & Xxxxxxx, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,870,000
=========
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