EXHIBIT 1.1
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
6,000,000 Shares
of
Common Stock
TERMS AGREEMENT
TO
U.S. PURCHASE AGREEMENT
-----------------------
April 21, 1998
To: Cross Timbers Oil Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Cross Timbers Oil Company, a Delaware corporation
(the "Company") and the ▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust (the "Selling Stockholder"),
propose to issue and sell 5,762,760 and 237,240 shares, respectively, of the
Company's common stock, par value $0.01 per share (the "Common Stock", such
securities also being hereinafter referred to as the "Initial U.S. Securities")
and, at our option, an additional 900,000 shares of Common Stock to be used
solely to cover any overallotments (the "U.S. Option Securities", and together
with the Initial U.S. Securities, the "U.S. Securities") pursuant to the U.S.
Purchase Agreement, dated April 21, 1998, among the Company, the Selling
Stockholder and the U.S. Representatives named herein.
Subject to the terms and conditions set forth or incorporated by
reference herein, we the underwriters named on Schedule A hereto (the "U.S.
Underwriters") offer to purchase, severally and not jointly, the 6,000,000
shares of Initial U.S. Securities opposite our names on Schedule A hereto at the
purchase price set forth below, and a proportionate share of the 900,000 shares
of U.S. Option Securities set forth below, to the extent any are purchased.
The U.S. Securities shall have the following terms:
TITLE: Common Stock
NUMBER OF INITIAL U.S. SECURITIES: 6,000,000
NUMBER OF U.S. OPTION SECURITIES: 900,000
PUBLIC OFFERING PRICE PER SHARE: $19.50
PURCHASE PRICE PER SHARE: $18.575
LISTING REQUIREMENTS: New York Stock Exchange
BLACK-OUT PROVISIONS: None.
LOCK-UP PROVISIONS: In addition to the agreement of the Company and the Selling
Stockholder contained in Section 3(j) and Section 1(c)(4),
respectively, of the U.S. Purchase Agreement, the Company
and the Selling Stockholder will not, for a period of 90
days from the date of this Terms Agreement, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
directly or indirectly, offer, sell, or otherwise dispose of
or grant any option with respect to, pledge, or hypothecate
any shares of Common Stock or securities convertible into
Common Stock, except for the exercise of options granted
pursuant to existing employee plans, and lock-up agreements
to the effect thereto shall be delivered pursuant to Section
5(l) prior to the Closing Time for the Selling Stockholder
or the Company.
CLOSING DATE AND LOCATION: Offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
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All of the provisions contained in the document attached as Annex I
hereto entitled "Cross Timbers Oil Company -- Common Stock -- U.S. Purchase
Agreement" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this U.S. Terms Agreement to the same extent as
if such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.
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Please accept this offer no later than 5:00 o'clock P.M. (New York
City time) on April 21, 1998 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-------------------------------------------
Authorized Signatory
Acting on behalf of themselves and as the U.S.
Representatives named in the U.S. Purchase
Agreement
Accepted:
CROSS TIMBERS OIL COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST
By:
--------------------------------------
As Attorney-in-Fact acting on behalf
of the Selling Stockholder
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SCHEDULE A
Initial
U.S. Underwriters U.S. Securities
----------------- ---------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated... 983,335
▇▇▇▇▇▇▇, Sachs & Co.................................. 983,333
Bear, ▇▇▇▇▇▇▇ & Co. Inc.............................. 983,333
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.. 983,333
▇▇▇▇▇▇ Brothers Inc.................................. 983,333
▇▇▇▇▇ ▇▇▇▇▇▇ Inc..................................... 983,333
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc............................ 100,000
---------------
6,000,000
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ANNEX I
[U.S. Purchase Agreement]
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================================================================================
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
6,000,000 SHARES OF COMMON STOCK
-----------------------------
U.S. PURCHASE AGREEMENT
-----------------------------
Dated: April 21, 1998
================================================================================
TABLE OF CONTENTS
U.S. PURCHASE AGREEMENT..............................................................1
SECTION 1. Representations and Warranties...........................................4
(a) Representations and Warranties by the Company............................4
(1) Compliance with Registration Requirements..........................4
(2) Incorporated Documents.............................................5
(3) Independent Accountants............................................5
(4) Financial Statements...............................................5
(5) No Material Adverse Change in Business.............................6
(6) Good Standing of the Company.......................................6
(7) Good Standing of Subsidiaries......................................7
(8) Capitalization.....................................................7
(9) Authorization of Agreements........................................7
(10) Authorization of Common Stock......................................7
(11) Absence of Defaults and Conflicts..................................8
(12) Violation of Law...................................................8
(13) Absence of Proceedings.............................................8
(14) Accuracy of Exhibits...............................................9
(15) Descriptions of the Securities.....................................9
(16) Absence of Further Requirements....................................9
(17) Possession of Licenses and Permits.................................9
(18) Title to Property..................................................9
(19) Tax Returns.......................................................10
(20) Environmental Laws................................................10
(21) Internal Accounting Controls......................................11
(22) Insurance.........................................................11
(23) No Stabilization..................................................11
(24) Investment Company Act; Public Utility Holding Company Act........11
(25) Proved Reserve Estimates..........................................12
(26) No Outstanding Registration Rights................................12
(27) Derivatives Business..............................................12
(28) Compliance with Cuba Act..........................................12
(29) Absence of Labor Dispute..........................................13
(30) ERISA.............................................................13
(31) Unlawful Contributions............................................13
(32) Possession of Intellectual Property...............................13
(b) Officers' Certificates..................................................14
(c) Representations and Warranties by the Selling Stockholder...............14
(1) Authorization of Agreements.......................................14
(2) Due Execution.....................................................14
(3) Good Title........................................................14
(4) Restriction on Sale of Securities.................................15
(5) Accurate Disclosure...............................................15
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(6) Absence of Manipulation...........................................15
(7) Certificates Suitable for Transfer................................15
(8) No Association with NASD..........................................16
(d) Selling Stockholder's Certificates......................................17
SECTION 2. Sale and Delivery to Underwriters; Closing..............................17
(a) Initial Securities......................................................17
(b) Option Securities.......................................................17
(c) Payment.................................................................17
(d) Denominations; Registration.............................................18
SECTION 3. Covenants of the Company................................................18
(a) Compliance with Securities Regulations and
Commission Requests.....................................................18
(b) Filing of Amendments....................................................19
(d) Delivery of Prospectus..................................................19
(e) Continued Compliance with Securities Laws...............................20
(f) Earnings Statement......................................................20
(g) Use of Proceeds.........................................................20
(h) Listing.................................................................20
(i) Restriction on Sale of Securities.......................................20
(j) Reporting Requirements..................................................21
SECTION 4. Payment of Expenses.....................................................21
(a) Expenses................................................................21
(b) Expenses of the Selling Stockholder.....................................21
(c) Termination of Agreement................................................21
SECTION 5. Conditions of U.S. Underwriters' Obligations............................21
(a) Effectiveness of Registration Statement.................................22
(b) Opinion of Counsel for Company..........................................22
(c) Opinion of Counsel for the Selling Stockholder..........................22
(d) Opinion of Counsel for U.S. Underwriters................................22
(e) Officers' Certificate...................................................22
(f) Certificate of Selling Stockholder......................................23
(g) Independent Engineer's Comfort Letters..................................23
(h) Bring-down Comfort Letter...............................................23
(i) Accountant's Comfort Letters............................................23
(j) Bring-down Comfort Letter...............................................23
(k) Approval of Listing.....................................................23
(l) Lock-up Agreements......................................................24
(m) Purchase of Initial International Securities............................24
(n) Conditions to Purchase of U.S. Option Securities........................24
(1) Officers' Certificate.............................................24
(2) Opinion of Counsel for Company....................................24
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(3) Opinion of Counsel for U.S. Underwriters..........................24
(4) Bring-down Comfort Letter.........................................24
(o) Additional Documents....................................................24
(p) Termination of Terms Agreements.........................................25
SECTION 6. Indemnification.........................................................25
(a) Indemnification of Underwriters by the Company..........................25
(c) Indemnification of Company, Directors and
Officers and Selling Stockholder........................................27
(d) Actions against Parties; Notification...................................27
(e) Settlement without Consent if Failure to Reimburse......................28
SECTION 7. Contribution............................................................28
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.........30
SECTION 9. Termination.............................................................30
(a) Purchase Agreement......................................................30
(b) Terms Agreement.........................................................30
(c) Liabilities.............................................................31
SECTION 10. Default by One or More of the U.S. Underwriters.........................31
SECTION 11. Default by the Selling Stockholder or the Company.......................31
SECTION 12. Notices.................................................................32
SECTION 13. Parties.................................................................32
SECTION 14. GOVERNING LAW AND TIME..................................................33
SECTION 15. Effect of Headlines.....................................................33
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CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
6,000,000 Shares
of
Common Stock
(Par value $0.01 per share)
U.S. PURCHASE AGREEMENT
April 21, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Cross Timbers Oil Company, a Delaware corporation (the "Company"), and the
▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust (the "Selling Stockholder") propose to issue and sell up to
5,762,760 and 237,240 shares, respectively, of common stock, par value $0.01 per
share (the "Common Stock"), of the Company.
As used herein, "Initial U.S. Securities" shall mean the 6,000,000 shares
of Common Stock to be initially sold to the U.S. Underwriters; "U.S. Option
Securities" shall mean 900,000 additional shares of Common Stock to be sold to
the U.S. Underwriters by the Company to cover over-
allotments; and "U.S. Securities" shall mean the Initial U.S. Securities and the
U.S. Option Securities.
The Company and the Selling Stockholder shall offer the U.S. Securities
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Bears, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and will enter into an agreement (the "U.S. Terms Agreement") providing for
the sale of the U.S. Securities to, and the purchase and offering thereof by,
▇▇▇▇▇▇▇ Lynch, Goldman, Sachs & Co., Bears, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and each of the other Underwriters named in Schedule A to the U.S. Purchase
Agreement (collectively, the "U.S. Underwriters," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof), for
whom ▇▇▇▇▇▇▇ Lynch, Goldman, Sachs & Co., Bears, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. are acting as representatives (in such capacity, the "U.S.
Representatives"), with respect to the issue and sale by the Company and the
Selling Stockholder and the purchase by the U.S. Underwriters, acting severally
and not jointly, of the respective numbers of shares of U.S. Initial Securities
set forth in Schedule A to the U.S. Purchase Agreement, and with respect to the
grant by the Company to the U.S. Underwriters, acting severally and not jointly,
of the option described in Section 2(b) hereof to purchase all or any part of
the U.S. Option Securities to cover over-allotments, if any.
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement"), subject to the completion of a related
terms agreement thereto (the "International Terms Agreement") (collectively, the
U.S. Terms Agreement and the International Terms Agreement are referred to
herein as the "Terms Agreements"), providing for the offering by the Company and
the Selling Stockholder of an aggregate of 1,500,000 shares of Common Stock (the
"Initial International Securities") through arrangements with certain
underwriters outside of the United States and Canada (the "International
Managers") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇▇ Sachs International,
Bear, ▇▇▇▇▇▇▇ International Limited, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International,
▇▇▇▇▇▇ Brothers International (Europe) and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as lead
managers (the "Lead Managers") and the grant by the Company to the International
Managers, acting severally and not jointly, of an option to purchase all or part
of the International Managers' pro rata portion of up to 225,000 additional
shares of Common Stock solely to cover overallotments, if any (the
"International Option Securities" and, together with the U.S. Option Securities,
the "Option Securities"). The Initial International Securities and the
International Option Securities are hereinafter called the "International
Securities".
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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The Company and the Selling Stockholder understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon
as the Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-46909) and pre-
effective Amendment No. 1 thereto for the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such post-effective amendments thereto as may be
required prior to the execution of the Terms Agreements. Such registration
statement (as so amended, if applicable) has been declared effective by the
Commission. Promptly after execution and delivery of this Agreement and the
Terms Agreements, the Company will either (i) prepare and file a prospectus
supplement in accordance with paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the U.S. Securities (the "Form of U.S. Prospectus")
and one relating to the International Securities (the "Form of International
Prospectus"). The Form of International Prospectus is identical to the Form of
U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting" and the inclusion in the Form of
International Prospectus of a section under the caption "Certain United States
Federal Tax Consequences to Non-U.S. Holders.") The information included in any
such prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
or included in a prospectus supplement filed in respect of such registration
statement (a) pursuant to Rule 424(b) is referred to as "Rule 424(b)
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 424(b) Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement (as so amended, if applicable),
including the exhibits thereto, schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 424(b) Information
and the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of International
Prospectus and the final Form of U.S. Prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the forms first furnished to the Underwriters for use in connection with
the offering of the Securities are herein called the "International Prospectus"
and the "U.S. Prospectus," respectively, and collectively, the "Prospectuses."
If Rule 434 of the 1933 Act Regulations is relied on, the terms "International
Prospectus" and "U.S. Prospectus" shall refer to the preliminary International
Prospectus dated April 13, 1998 and the preliminary U.S. Prospectus dated April
13, 1998, respectively, each together with
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the applicable Term Sheet and all references in this Agreement and the Terms
Agreements to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement and the Terms Agreements,
all references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to the U.S. Representatives, as of the date hereof, and to each
U.S. Underwriter, as of the date thereof, as of the Closing Time referred to in
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, and agrees with each U.S. Underwriter, as follows:
(1) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement and any post-
effective amendments thereto (including, the filing of the Company's most
recent Annual Report on Form 10-K with the Commission (the "Annual Report
on Form 10-K")) became effective and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), the Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Neither of the Prospectuses
nor any amendments or supplements thereto, at the time the Prospectuses or
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any amendments or supplements thereto were issued and at the Closing Time
(and, if any U.S. Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, the representations and warranties
in this subsection shall not apply to statements in or omissions from the
Registration Statement or the U.S. Prospectus made in reliance upon and in
conformity with information furnished in writing by any U.S. Underwriter
through the U.S. Representatives expressly for use in the Registration
Statement or the Prospectuses.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the U.S. Prospectus delivered
to the U.S. Underwriters for use in connection with the offering of the
U.S. Securities will, at the time of such delivery, be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, included the most recent Annual
Report of the Company on Form 10-K filed with the Commission and each
Current Report of the Company on Form 8-K filed with the Commission since
the end of the fiscal year to which such Annual Report relates. The
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectuses, when they became effective or
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations") and, when read together with the other information in the
Prospectuses, at the date of the Prospectuses, and at the Closing Time
(and, if any U.S. Option Securities are purchased, at the Date of Delivery)
did not and will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement and the Prospectuses are independent certified public accountants
with respect to the Company and its Subsidiaries within the meaning of
Regulation S-X under the 1933 Act.
(4) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Registration Statement and the
Prospectuses, together with
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the related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly in
all material respects the financial position of the Company and its
consolidated Subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated Subsidiaries for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or
incorporated by reference in the Registration Statement and Prospectuses
present fairly in all material respects in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included or incorporated by reference in
the Registration Statement and the Prospectuses present fairly in all
material respects the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectuses. In addition, any pro forma financial statements of the
Company and its Subsidiaries and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectuses present fairly in all material respects the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise (a "Material Adverse Effect"),
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
Subsidiaries, other than those arising in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries
considered as one enterprise and (C) except for regular quarterly dividends
on the Common Stock and on the Series A Convertible Preferred Stock, par
value $0.01 per share, of the Company (the "Series A Preferred Stock"), in
amounts per share that are consistent with past practice, respectively,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the state of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under, or as contemplated under, this Agreement and the applicable Terms
Agreements. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not result in a Material Adverse
Effect.
-6-
(7) Good Standing of Subsidiaries. The only direct or indirect
Subsidiaries of the Company are corporations listed on Schedule I hereto
(each, a "Subsidiary" and collectively, the "Subsidiaries"). Each
Subsidiary has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its organization,
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as otherwise stated
in the Registration Statement and the Prospectuses, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
is validly issued, fully paid and non-assessable and is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity other than
the pledges to banks under the loan agreements of the Company. None of the
outstanding shares of capital stock of the Subsidiaries was issued in
violation of preemptive or other similar rights arising by operation of
law, under the charter or by-laws of any Subsidiary or under any agreement
to which the Company or any Subsidiary is a party.
(8) Capitalization. The issued and outstanding capital stock of
the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances thereof, if any, contemplated under this Agreement and the
International Purchase Agreement, pursuant to employee benefit plans
referred to in the Prospectuses or pursuant to the exercise of convertible
securities or options referred to in the Prospectuses).
(9) Authorization of Agreements. This Agreement and the
International Purchase Agreement have been, and the related Terms
Agreements thereto, as of the date thereof, will have been, duly
authorized, executed and delivered by the Company.
(10) Authorization of Common Stock. The Securities being sold to the
Underwriters pursuant to the respective Terms Agreements have been, or as
of the date of the Terms Agreements will have been, duly authorized by the
Company for issuance and sale to the U.S. Underwriters pursuant to this
Agreement and the U.S. Terms Agreement and to the International Managers
pursuant to the International Purchase Agreement and the International
Terms Agreement. Such Securities, when issued and delivered by the Company
pursuant to this Agreement, the International Purchase Agreement and the
applicable Terms Agreements, against payment of the consideration therefore
specified in such Terms Agreements, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights arising by operation of law, under the charter and by-laws of the
Company or under any agreement to which the Company or any of its
Subsidiaries is a party, or otherwise. No holder of the Securities will be
subject to personal liability by reason of being such a holder.
-7-
(11) Absence of Defaults and Conflicts. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, "Agreements and
Instruments"), except for such defaults as would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement,
the International Purchase Agreement and the applicable Terms Agreements
and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and the
Prospectuses and the consummation of the transactions contemplated herein
and in the Registration Statement and the Prospectuses (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described under the caption "Use of Proceeds")
and compliance by the Company with its obligations under this Agreement and
the International Purchase Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Company or any
of its Subsidiaries pursuant to, any Agreements and Instruments, except for
such conflicts, breaches, defaults, events or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any violation of
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or
any of their assets or properties, which violation would result in a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Subsidiaries. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.
(12) Violation of Law. Neither the Company nor any Subsidiary is in
violation of any law, ordinance, governmental rule or regulation or court
decree to which it may be subject, which violation might result in a
Material Adverse Effect.
(13) Absence of Proceedings. Except as disclosed in the
Registration Statement and the Prospectuses, there is no action, suit,
proceeding, inquiry or investigation before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any Subsidiary
which is required to be disclosed in the Registration Statement and the
Prospectuses (other than as stated therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the assets or properties of
the Company and its Subsidiaries, considered as one enterprise, or the
-8-
consummation of this Agreement, the International Purchase Agreement and
the applicable Terms Agreements or the transactions contemplated herein or
therein. The aggregate of all pending legal or governmental proceedings to
which the Company or any Subsidiary thereof is a party or of which any of
their respective assets or properties is the subject which are not
described in the Registration Statement and the Prospectuses, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(14) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or filed as
required.
(15) Descriptions of the Securities. The Securities being sold
pursuant to the Terms Agreements, as of the date of the Prospectuses, will
conform in all material respects to the statements relating thereto
contained in the Prospectuses.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations under this Agreement, the International Purchase Agreement or
the Terms Agreements or in connection with the transactions contemplated
under this Agreement, the International Purchase Agreement or the Terms
Agreements, except such as have been already obtained or as may be required
under state securities laws.
(17) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now conducted by them; the Company and
its Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(18) Title to Property. The Company and its Subsidiaries have good
and defensible title to their producing oil and gas properties, and any gas
gathering properties that it owns, free and clear of all liens,
encumbrances and defects, except (a) those described in the Registration
Statement and the Prospectuses, (b) liens securing taxes and other
governmental charges, or claims of materialmen, mechanics and similar
persons, not yet due and payable, (c) liens and encumbrances under
operating agreements, unitization and pooling
-9-
agreements, and gas sales contracts, securing payment of amounts not yet
due and payable and of a scope and nature customary in the oil and gas
industry and (d) liens, encumbrances and defects that do not in the
aggregate materially affect the value of such oil and gas properties or gas
gathering properties or materially interfere with the use made or proposed
to be made of such properties by the Company and its Subsidiaries. Except
to the extent described in the Registration Statement and the Prospectuses,
the oil, gas and mineral leases, coal methane leases, options to lease,
drilling concessions or other property interests therein held by the
Company and its Subsidiaries reflect in all material respects the right of
the Company and its Subsidiaries, as the case may be, to explore or receive
production from the undeveloped properties described in the Registration
Statement and the Prospectuses, and the care taken by the Company and its
Subsidiaries with respect to acquiring or otherwise procuring such leases,
options to lease, drilling concessions and other property interests was
generally consistent with standard industry practices for acquiring or
procuring leases and interests therein to explore such for hydrocarbons.
All other leases and subleases material to the business of the Company and
its Subsidiaries, considered as one enterprise, and under which the Company
or any of its Subsidiaries holds properties described in the Registration
Statement and the Prospectuses are in full force and effect, and neither
the Company nor any of its Subsidiaries has actual notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of
the Company or any Subsidiary under any of such leases or subleases, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(19) Tax Returns. All United States federal income tax returns of
the Company and its Subsidiaries required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid, except assessments against which appeals
have been or will be promptly taken and as to which adequate reserves have
been provided. The Company and its Subsidiaries have filed all other tax
returns that are required to have been filed by them pursuant to applicable
foreign, state, local or other law except insofar as the failure to file
such returns would not result in a Material Adverse Effect, and has paid
all taxes due pursuant to such returns or pursuant to any assessment
received by the Company and its Subsidiaries, except for such taxes, if
any, as are being contested in good faith and as to which adequate reserves
have been provided. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability for any
years not finally determined are adequate to meet any assessments or re-
assessments for additional income tax for any years not finally determined,
except to the extent of any inadequacy that would not result in a Material
Adverse Effect.
(20) Environmental Laws. Except as described in the Registration
Statement and the Prospectuses and except such matters as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative order, consent, decree
or judgment thereof, including any judicial or administrative order,
consent, decree or judgment relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
-10-
including, without limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to the knowledge of
the Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or
Environmental Laws.
(21) Internal Accounting Controls. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(22) Insurance. The Company and its Subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or
similar business, and all such insurance is in full force and effect.
(23) No Stabilization. Neither the Company nor any of its officers,
directors or controlling persons has taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(24) Investment Company Act; Public Utility Holding Company Act.
The Company is not, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectuses will not be (A) an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission promulgated thereunder (the "1940 Act") or
(B) a "holding company" or "affiliate" of a "holding company" or "public
utility," as such terms are defined
-11-
in the Public Utility Holding Company Act of 1935, and the rules and
regulations of the Commission promulgated thereunder (the "PUHCA").
(25) Proved Reserve Estimates. The information supplied by the
Company to the independent petroleum engineering consultants for the
Company for purposes of preparing the reserve reports and estimates of such
consultants included in the Registration Statement and the Prospectuses,
including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to current
and future operations and sales of production, was true and correct in all
material respects on the date supplied and was prepared in accordance with
customary industry practices; ▇▇▇▇▇▇ and ▇▇▇▇▇, Ltd., independent petroleum
engineers, who prepared estimates of the extent and value of proved oil and
natural gas reserves of the Company are independent with respect to the
Company. The proved reserve report and estimates relating to the East
Texas Properties (as defined in the Prospectuses) as of December 31, 1997,
included in the Registration Statement and the Prospectuses, were, subject
to the following sentence, true and correct in all material respects as of
the date of the Prospectuses and were prepared by Company petroleum
engineers in accordance with customary industry practices. Such proved
reserve reports were based on information supplied to the Company by the
owner of the East Texas Properties for the purposes of preparing such
reserve reports and estimates, including, without limitation, production,
costs of operation and development, current prices of production,
agreements relating to current and future operations and sales of
production, and, to the knowledge of the Company, such information was true
and correct in all material respects.
(26) No Outstanding Registration Rights. Other than the
registration rights agreement, dated as of May 11, 1993, among the Company
and certain stockholders of the Company (the "Registration Rights
Agreement") and certain registration rights granted in respect of a Warrant
Agreement dated December 1, 1997 by and between the Company and Amoco
Corporation, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the 1933 Act with respect to
any securities of the Company or any of its Subsidiaries, owned or to be
owned, by such person or to require the Company to include such securities
with any securities being registered pursuant to any registration statement
filed by the Company under the 1933 Act.
(27) Derivatives Business. The internal controls and policies used
in connection with the natural gas derivatives business of the Company and
each Subsidiary are reasonable and to the best knowledge of the Company,
adequate in light of the business conducted.
(28) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
or is exempt therefrom.
-12-
(29) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
Subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has
violated (i) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees applicable to the
Company or any of its Subsidiaries or (ii) any applicable wage or hour laws
in any manner, which violation could reasonably be expected to have a
Material Adverse Effect.
(30) ERISA. The Company and each of its Subsidiaries is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act, as amended, or
the rules and regulations promulgated thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company or any of its
Subsidiaries would have any material liability; neither the Company nor any
of its Subsidiaries has incurred or expects to incur material liability
under (i) Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(31) Unlawful Contributions. Neither the Company nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person,
acting on behalf of the Company or any of its Subsidiaries, has used any
corporate funds during the last five years for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977; or made any
illegal bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(32) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
-13-
finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any Subsidiary and delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇, the U.S.
Representatives or to counsel for the Underwriters in connection with the
offering of the U.S. Securities shall be deemed a representation and warranty by
the Company to each U.S. Underwriter as to the matters covered thereby on the
date of such certificate.
(c) Representations and Warranties by the Selling Stockholder. The
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter, as of the date hereof, and as of the Closing Time, and agrees with
each Underwriter, as follows:
(1) Authorization of Agreements. All consents, approvals,
authorizations and orders necessary for the execution and delivery and
performance by such Selling Stockholder of this Agreement and the Custody
Agreement and Power of Attorney (collectively, the "Power of Attorney and
Custody Agreement") hereinafter referred to, and for the sale and delivery
of the Securities to be sold by such Selling Stockholder hereunder, have
been obtained; and such Selling Stockholder has full right, power and
authority to enter into this Agreement and the Power of Attorney and
Custody Agreement and to sell, assign, transfer and deliver the Securities
to be sold by such Selling Stockholder hereunder free and clear of all
adverse claims. The sale of the Securities to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement and the Power of Attorney and
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach of
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of such Selling Stockholder if such Selling Stockholder is a
corporation, or the agreement of partnership of such Selling Stockholder if
such Selling Stockholder is a partnership, or the agreement or declaration
of trust if such Selling Stockholder is a trust, or any statute or any
order, rule or regulation of any court or government agency or body having
jurisdiction over such Selling Stockholder or the property of such Selling
Stockholder.
(2) Due Execution. This Agreement and the related U.S. Terms
Agreement has been duly executed and delivered by such Selling Stockholder.
(3) Good Title. Such Selling Stockholder now has, and at the
Closing Time (and at each Date of Delivery, if applicable) will have, good
and valid title to the Securities being sold by such Selling Stockholder
hereunder, free and clear of any pledge, lien, security interest,
encumbrance, adverse claim or equity whatsoever, and now has and at the
Closing Time (and at each Date of Delivery, if applicable) will have, full
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Securities being sold by such Selling
Stockholder hereunder; and upon delivery of the Securities being sold
-14-
by such Selling Stockholder hereunder and payment of the purchase price as
herein contemplated, such Selling Stockholder will transfer to the several
Underwriters good and valid title to such Securities free and clear of any
pledge, lien, security interest, encumbrance, adverse claim or equity
whatsoever, except liens placed thereon by the Underwriters. No person has
any right to acquire from such Selling Stockholder any Securities to be
sold hereunder and such Selling Stockholder is under no obligation, whether
absolute or contingent, to sell any such Securities to any person, except
as contemplated by this Agreement.
(4) Restriction on Sale of Securities. During a period of 90 days
from the date of the U.S. Terms Agreement, such Selling Stockholder, if
such Selling Stockholder owns shares of Common Stock immediately following
the Closing Time (as hereinafter defined), will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold
hereunder.
(5) Accurate Disclosure. The Registration Statement, at the time
it becomes effective and at Closing Time, will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, and at Closing Time, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
only apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information related
to such Selling Stockholder furnished to the Company or the Underwriters in
writing by such Selling Stockholder expressly for use in the Registration
Statement or Prospectus.
(6) Absence of Manipulation. The Selling Stockholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(7) Certificates Suitable for Transfer. Certificates for all of
the Securities to be sold by such Selling Stockholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank
-15-
with signatures guaranteed, have been placed in custody with the Custodian
with irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement.
(8) No Association with NASD. Neither such Selling Stockholder
nor any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities
Dealers, Inc.), any member of the National Association of Securities
Dealers, Inc.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to ▇▇▇▇▇▇▇ ▇▇▇▇▇ prior to or at the Closing Time a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The Selling Stockholders represents and warrants that Common Stock
constituting all of the Securities to be sold by such Selling Stockholder
hereunder are to be held in custody under a Custody Agreement, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Stockholder to ▇. ▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and each of them as
custodian (the "Custodian"), and that such Selling Stockholder has duly executed
and delivered a Power of Attorney and Custody Agreement containing a power of
attorney appointing ▇. ▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ , and each of them as
such Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement and a U.S. Terms Agreement on
behalf of such Selling Stockholder, to determine the purchase price to be paid
by the Underwriters to the Selling Stockholders as provided in such U.S. Terms
Agreement, to authorize the delivery of the Securities to be sold by such
Selling Stockholder hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this Agreement
and the Power of Attorney and Custody Agreement, such authority as is fully set
forth in, and may be limited by, the Power of Attorney and Custody Agreement.
The Selling Stockholder specifically agrees that the Securities to be
held in custody for such Selling Stockholder under the Power of Attorney and
Custody Agreement will be subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the Attorneys-in-
Fact by the power of attorney contained in the Power of Attorney and Custody
Agreement, are to that extent irrevocable. The Selling Stockholders
specifically agrees that its obligations hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or incapacity of
any executor or trustee or the termination of such estate or trust, or in the
case of a partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event. If any individual Selling
Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such partnership
or corporation should be dissolved, or if any other such event should occur,
before the delivery of the Securities hereunder,
-16-
certificates representing the Securities shall be delivered by or on behalf of
such Selling Stockholder in accordance with the terms and conditions of this
Agreement and of the Power of Attorney and Custody Agreements, and actions taken
by the Attorneys-in-Fact pursuant to the powers of attorney in the Power of
Attorney and Custody Agreements shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred, regardless of whether
or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other event.
(d) Selling Stockholder's Certificates. Any certificate signed by
such Selling Stockholder and delivered to the Representatives or to counsel for
the Underwriters shall be deemed a representation and warranty by such Selling
Stockholder to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. The several commitments of the U.S. Underwriters
to purchase the Initial U.S. Securities pursuant to the U.S. Terms Agreement
shall be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Option Securities. In addition, subject to the terms and conditions
herein set forth, the Company grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to the number of U.S. Option
Securities to cover over-allotments at a price per U.S. Option Security equal to
the price per Initial U.S. Security, less an amount equal to any dividends or
distributions declared by the Company and paid or payable on the Initial U.S.
Securities but not payable on the U.S. Option Securities. Such option will
expire 30 days after the date of such Terms Agreements, and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Initial U.S. Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company setting
forth the number of U.S. Option Securities as to which the several U.S.
Underwriters are then exercising the option and the time, date and place of
payment and delivery for such U.S. Option Securities. Any such time and date of
payment and delivery (each, a "Date of Delivery") shall be determined by ▇▇▇▇▇▇▇
▇▇▇▇▇, but shall not be later than seven full business days after the exercise
of said option, nor in any event prior to the Closing Time (as hereinafter
defined), unless otherwise agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company. If the
option is exercised as to all or any portion of the U.S. Option Securities, each
of the U.S. Underwriters, severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities each such U.S. Underwriter has
severally agreed to purchase as set forth in such U.S. Terms Agreement bears to
the total number of Initial U.S. Securities, subject to such adjustments as
▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to eliminate any sales or purchases
of a fractional number or aggregate principal amount, as the case may be, of
U.S. Option Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial U.S. Securities shall be made at the office of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇,
P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
-▇▇-
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon by
▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company, at 10:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date of the applicable Terms Agreement (unless postponed
in accordance with the provisions of Section 10 hereof), or such other time not
later than ten business days after such date as shall be agreed upon by ▇▇▇▇▇▇▇
▇▇▇▇▇, the Selling Stockholder and the Company (such time and date of payment
and delivery being herein called "Closing Time").
In addition, in the event that the U.S. Underwriters have exercised their
option to purchase any or all of the U.S. Option Securities, payment of the
purchase price for, and delivery of such U.S. Option Securities, shall be made
at the above-mentioned offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C, or at such other
place as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company, on the relevant
Date of Delivery as specified in the notice from ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company.
Payment shall be made to the Company and the Selling Stockholder by wire
transfer of immediately available funds to a bank account designated by the
Company and the Custodian pursuant to the Selling Stockholder's Power of
Attorney and Custody Agreement against delivery to the U.S. Representatives for
the respective accounts of the U.S. Underwriters of the U.S. Securities to be
purchased by them. It is understood that each U.S. Underwriter has authorized
▇▇▇▇▇▇▇ ▇▇▇▇▇, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the U.S. Securities which it has severally
agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of
the U.S. Underwriters may (but shall not be obligated to) make payment of the
purchase price for the U.S. Securities to be purchased by any U.S. Underwriter
whose funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such U.S.
Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Initial U.S. Securities and
certificates therefor and the U.S. Option Securities, if any, and certificates
therefor shall be in such denominations and registered in such names as the U.S.
Representatives may request in writing at least one full business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be. The U.S.
Securities and certificates therefor and the U.S. Option Securities, if any, and
certificates therefor will be made available for examination and packaging by
the U.S. Representatives in the City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with the U.S.
Representatives and with each U.S. Underwriter participating in the offering of
U.S. Securities, as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 415, Rule 424 and/or Rule 434, if and as applicable, of the 1933 Act
Regulations and will notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ immediately, and confirm the
notice in writing, of (i) the effectiveness of any post-effective amendment
to the Registration Statement or the filing of any supplement or amendment
to the Prospectuses, (ii) the receipt of any comments from the Commission,
-18-
(iii) any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of
the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424 and will take such steps as it deems
necessary to ascertain promptly whether the Prospectus transmitted for
filing under Rule 424 was received for filing by the Commission and, in the
event that it was not, it will promptly file the Prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of Amendments. The Company will give ▇▇▇▇▇▇▇ ▇▇▇▇▇
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations), any Term Sheet, or any amendment, supplement or revision
to either the Prospectuses included in the Registration Statement at the
time it became effective or to the Prospectuses, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ with copies
of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which ▇▇▇▇▇▇▇ ▇▇▇▇▇ or counsel for the U.S. Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the U.S. Representatives and counsel for the
U.S. Underwriters, without charge, (i) signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein), (ii)
copies of the Registration Statement and each amendment thereto in the form
electronically filed with the Commission pursuant to ▇▇▇▇▇ and (iii) signed
copies of all consents and certificates of experts, and will also deliver
to the U.S. Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the U.S. Underwriters. The Registration
Statement and any amendments or supplements thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters
-19-
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the International
Purchase Agreement, the Terms Agreements, the Registration Statement and
the Prospectuses. If at any time when a Prospectus is required by the 1933
Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the U.S. Underwriters
or for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement any Prospectuses in order that the Prospectus will not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
any Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the U.S. Underwriters, without charge, such
number of copies of such amendment or supplement as the U.S. Underwriters
may reasonably request.
(f) Earnings Statement. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its security holders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated by,
the last paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(h) Listing. The Company will use its best efforts to effect the
listing of the Securities, prior to the Closing Time, on any national
securities exchange or quotation system if and as specified in the
applicable Terms Agreement.
(i) Restriction on Sale of Securities. During a period of 90 days
from the date of the Terms Agreement, the Company will not, without the
prior written consent of each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any Common Stock or any security convertible or
exchangeable into or exercisable for Common Stock (except for Common Stock
issued
-20-
pursuant to this Agreement or pursuant to, or in connection with, employee
benefit plans or the exercise of convertible securities).
(j) Reporting Requirements. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement or
the U.S. Terms Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing and delivery
to the U.S. Underwriters of this Purchase Agreement, the Terms Agreements, any
Agreement Among Underwriters, and such other documents as may be required in
connection with the purchase, sale, issuance or delivery of the U.S. Securities,
(iii) the preparation, issuance and delivery of the U.S. Securities and
certificates for the U.S. Securities to the U.S. Underwriters, including any
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the U.S. Securities to the U.S. Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or agents
(including transfer agents and registrars) (v) the printing and delivery to the
U.S. Underwriters of copies of each preliminary prospectus, any Term Sheet, and
the Prospectuses and any amendments or supplements thereto, (vi) the fees and
expenses incurred in connection with the listing of the U.S. Securities, and
(vii) the fees and expenses of the Attorneys-in-Fact and the Custodian under the
Power of Attorney and Custody Agreement.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will pay
all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including any
stamp duties, capital duties and stock transfer taxes, if any, payable upon the
sale of the Securities to the U.S. Underwriters, and their transfer between the
U.S. Underwriters pursuant to an agreement between such U.S. Underwriters and
the fees and disbursements of its counsel and accountants.
(c) Termination of Agreement. If the U.S. Terms Agreement is terminated
by the U.S. Representatives in accordance with the provisions of Section 5 or
Section 9(b)(i) or Section 11 hereof, the Company shall reimburse the U.S.
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
of the U.S. Underwriters to purchase and pay for the U.S. Securities pursuant to
the U.S. Terms Agreement are subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholder contained in Section 1
hereof or in certificates of any officer of the Company or any of its
Subsidiaries or on behalf of the Selling Stockholder delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
-21-
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act and
no proceedings for that purpose shall have been initiated or be pending or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the U.S. Underwriters. A prospectus containing
information relating to the description of the U.S. Securities, the
specific method of distribution and similar matters shall have been filed
with the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or
(5), as applicable, or, if the Company has elected to rely upon Rule 434 of
the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule
424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters, to the effect set forth in Exhibit A hereto and to
such further effect as counsel to the U.S. Underwriters may reasonably
request.
(c) Opinion of Counsel for the Selling Stockholder. At Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Selling
Stockholder, in form and substance satisfactory to counsel for the U.S.
Representatives, together with signed or reproduced copies of such letter
for each of the other U.S. Underwriters, to the effect set forth in Exhibit
B hereto and to such further effect as counsel to the U.S. Underwriters may
reasonably request.
(d) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters with respect to the matters set forth in
paragraphs (1),(2) (last sentence only), (4) (provided that the second
clause thereof shall be rendered solely in respect of preemptive or other
similar rights arising by operation of law or under the certificate of
incorporation or bylaws of the Company), (6) (solely as to due
authorization, execution and delivery by the Company of the Purchase
Agreements and the Terms Agreements), (7) and the penultimate paragraph of
Exhibit A hereto.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date of the Terms Agreements or since the respective dates
as of which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the U.S. Representatives shall have received a certificate
of the Company, executed by the President or a Vice President of the
Company and the chief financial officer or chief
-22-
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (iii) the Company has complied in all material respects with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or, to the Company's
knowledge, threatened by the Commission.
(f) Certificate of Selling Stockholder. At Closing Time, the U.S.
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of the Selling Stockholder, dated as of Closing Time, to the effect
that (i) the representations and warranties of the Selling Stockholder
contained in Section 1(c) hereof are true and correct in all respects with
the same force and effect as though expressly made at and as of Closing
Time and (ii) the Selling Stockholder has complied in all material respects
with all agreements and all conditions or its part to be performed under
this Agreement at or prior to Closing Time.
(g) Independent Engineer's Comfort Letters. At the time of the
execution of the Terms Agreements, the U.S. Representatives shall have
received from ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd., independent petroleum engineers for the
Company, a letter dated such date, in form and substance satisfactory to
the U.S. Representatives.
(h) Bring-down Comfort Letter. At Closing Time, the U.S.
Representatives shall have received from ▇▇▇▇▇▇ and ▇▇▇▇▇, Ltd. a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this Section 5.
(i) Accountant's Comfort Letters. At the time of the execution of
the Terms Agreements, the U.S. Representatives shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the U.S. Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information in the Registration
Statement and the Prospectuses.
(j) Bring-down Comfort Letter. At Closing Time, the U.S.
Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this Section 5,
except that the specified date referred to shall be a date not more than
three business days prior to the Closing Time.
(k) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing, subject only to official notice of issuance, if
and as specified in the U.S. Terms Agreement.
-23-
(l) Lock-up Agreements. On the date of the Terms Agreements, the
U.S. Representatives shall have received, in form and substance
satisfactory to them, each lock-up agreement, if any, specified in the
Terms Agreements as being required to be delivered by the persons listed
therein.
(m) Purchase of Initial International Securities.
Contemporaneously with the purchase by the U.S. Underwriters of the Initial
U.S. Securities under this Agreement, the International Managers shall have
purchased the Initial International Securities under the International
Purchase Agreement.
(n) Conditions to Purchase of U.S. Option Securities. If the U.S.
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be
true and correct as of each Date of Delivery, and, at the relevant Date of
Delivery, the U.S. Representatives shall have received:
(1) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Company, executed by the President or a Vice
President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct as of such Date of Delivery.
(2) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the U.S. Underwriters,
dated such Date of Delivery, relating to the U.S. Option Securities
and otherwise to the same effect as the opinion required by Section
5(d) hereof.
(4) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, substantially in the same form and substance as the letter
furnished to the U.S. Representatives pursuant to Section 5(h) hereof,
except that the "specified date" on the letter furnished pursuant to
this paragraph shall be a date not more than three business days prior
to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the U.S. Securities
as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
-24-
conditions, herein contained; and all proceedings taken by the Company and
the Selling Stockholder in connection with the issuance and sale of the
U.S. Securities as herein contemplated shall be reasonably satisfactory in
form and substance to the U.S. Representatives and counsel for the U.S.
Underwriters.
(p) Termination of Terms Agreements. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement and the U.S. Terms Agreement (or, with respect to
the U.S. Underwriters' exercise of any applicable over-allotment option for
the purchase of U.S. Option Securities on a Date of Delivery after the
Closing Time, the obligations of the U.S. Underwriters to purchase the U.S.
Option Securities on such Date of Delivery) may be terminated by the U.S.
Representatives by notice to the Company at any time at or prior to the
Closing Time (or such Date of Delivery, as applicable), and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 6 and 7 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company. (1) The
Company agrees to indemnify and hold harmless each U.S. Underwriter and
each person, if any, who controls any U.S. Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be a part
thereof, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
-25-
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any U.S. Underwriter through the U.S. Representatives
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to
be a part thereof, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto); and provided,
further, that the Company will not be liable to an Underwriter with respect
to any preliminary Prospectus or Prospectuses to the extent that the
Company shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at
or prior to the Closing Time, a copy of the final Prospectus as then
amended or supplemented if (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Time to allow for
distribution by the Closing Time) to the Underwriters and the loss,
liability, claim, damage or expense of such Underwriter resulted from an
untrue statement or omission or alleged untrue statement or omission of a
material fact contained in or omitted from the preliminary Prospectus or
Prospectuses which was corrected in the final Prospectus as, if applicable,
amended or supplemented prior to the Closing Time and such Prospectus was
required by law to be delivered at or prior to the written confirmation of
sale of Securities to such person and (ii) such failure to give or send
such final Prospectus by the Closing Time to the party or parties asserting
such loss, liability, claim, damage or expense would have constituted the
sole defense to the claim asserted by such person.
(b) Indemnification of Underwriters by the Selling Stockholder. The
Selling Stockholder agrees to indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto, including the Rule 430A Information and the Rule
-26-
434 Information deemed to be a part thereof, if applicable,) or any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
related to such Selling Stockholder furnished to the Company by such
Selling Stockholder expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto);
provided, however, that the liability of such Selling Stockholder under
this subsection (b) shall be limited to the aggregate gross proceeds
received by such Selling Stockholder pursuant to the sale of its Securities
hereunder.
(c) Indemnification of Company, Directors and Officers and Selling
Stockholder. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act and the Selling Stockholder and each person, if any, who controls the
Selling Stockholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter
through the U.S. Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of
parties indemnified pursuant to Section 6(b) and 6(c) above, counsel to the
indemnified parties shall be selected by the Company and the Selling
Stockholder, respectively. In the case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying
party shall not have the right to direct the defense of such action on
behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified
-27-
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that in connection with
such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel for all indemnified parties (in addition to
local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general
allegations or circumstances) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification
or contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholder, on the one hand, and the U.S. Underwriters,
on the other hand, from the offering of the U.S. Securities pursuant to the
Terms Agreements or (ii) if the allocation provided by clause (i) 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
-28-
also the relative fault of the Company and the Selling Stockholder, on the one
hand, and of the U.S. Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder,
on the one hand, and the U.S. Underwriters, on the other hand, in connection
with the offering of the U.S. Securities pursuant to the applicable Terms
Agreements shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of such U.S. Securities (before deducting
expenses) received by the Company and the Selling Stockholder and the total
underwriting discount received by the U.S. Underwriters, in each case as set
forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheets bear to the aggregate public offering price of such
U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder, on the one
hand, and the U.S. Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the U.S. Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public exceeds the amount of any damages which such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the
-29-
Company who signed the Registration Statement, and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or such Selling Stockholder. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of U.S. Securities set forth opposite their respective
names on the U.S. Terms Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the U.S. Terms Agreement or in certificates of officers of the Company or any of
its Subsidiaries or the Selling Stockholder submitted pursuant hereto or thereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling Stockholder, and shall
survive delivery of and payment for the U.S. Securities.
SECTION 9. Termination.
(a) Purchase Agreement. This Agreement (excluding the Terms
Agreements) may be terminated for any reason at any time by the Company or
by the U.S. Representatives upon the giving of 30 days' prior written
notice of such termination to the other party hereto or as otherwise
provided for herein.
(b) Terms Agreement. The U.S. Representatives may terminate the
U.S. Terms Agreement, by notice to the Company and the Selling Stockholder,
at any time at or prior to the Closing Time or any relevant Date of
Delivery, if (i) there has been, since the time of execution of the Terms
Agreement or since the respective dates as of which information is given in
the U.S. Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) there
has occurred any material adverse change in the financial markets in the
United States or in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change
or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of
which is such as to make it, in the judgment of the U.S. Representatives,
impracticable to market the Securities or to enforce contracts for the sale
of the Securities, or (iii) trading in any securities of the Company has
been suspended or limited by the Commission or the New York Stock Exchange,
Inc., or if trading generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market has been
suspended or limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for the prices have been required, by either of
said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) a banking moratorium has been declared by either Federal
or New York authorities.
-30-
(c) Liabilities. If this Agreement or the U.S. Terms Agreement is
terminated pursuant to this Section 9, such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof, and provided further that Sections 6 and 7 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at the Closing Time or the relevant
Date of Delivery, as the case may be, to purchase the Securities which it or
they are obligated to purchase under the applicable Terms Agreements (the
"Defaulted Securities"), then the U.S. Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the non-
defaulting U.S. Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the U.S. Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of U.S. Securities to be purchased on such date pursuant to such
U.S. Terms Agreement, the non-defaulting U.S. Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations under
such Terms Agreements bear to the underwriting obligations of all non-
defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date pursuant to such
U.S. Terms Agreement, this Agreement (or, with respect to the U.S.
Underwriters' exercise of the over-allotment option for the purchase of
U.S. Option Securities on a Date of Delivery after the Closing Time, the
obligations of the U.S. Underwriters to purchase, and the Company to sell,
such U.S. Option Securities on such Date of Delivery) shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the Terms Agreements or (ii) in the case of a Date of Delivery after the
Closing Time, a termination of the obligations of the U.S. Underwriters to
purchase and the Company to sell the relevant U.S. Option Securities, as the
case may be, either the U.S. Representatives or the Company shall have the right
to postpone the Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectuses or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company. (a) If
the Selling Stockholder shall fail at Closing Time or at the Date of Delivery to
sell and deliver the number of Securities which such Selling Stockholder is
obligated to sell hereunder, then the Company shall have the right, to the
extent permitted under the 1933 Act and the 1933 Act Regulations, to increase
-31-
the number of shares of Common Stock to be sold by it hereunder to equal the
number to be sold by the Company and the Selling Stockholder as set forth in
this Agreement, in which event the terms "Initial Securities" and "Securities"
as used herein shall be deemed to include the additional shares of Common Stock
to be sold by the Company; provided, however, that the Company shall have the
right set forth in this sentence only if the Company (i) amends or supplements
the Prospectus, to the extent required under the 1933 Act and the 1933 Act
Regulations, to reflect such increase in shares of Common Stock to be sold by
the Company and (ii) prior to the Closing Time, provides copies of such amended
Prospectus or supplement thereto to the Underwriters on a timely basis and in
sufficient quantities in order for the Underwriters to comply with all
prospectus delivery obligations in connection therewith. If the Selling
Stockholder shall fail at Closing Time to sell and deliver the number of
Securities which the Selling Stockholder is obligated to sell hereunder and the
Company does not exercise the right granted to it pursuant to the immediately
preceding sentence, then the U.S. Underwriters may, at the option of the U.S.
Representatives, by notice from the U.S. Representatives to the Company, either
(a) terminate this Agreement without any liability on the fault of any non-
defaulting party except that the provisions of Sections 4, 6 and 7 shall remain
in full force and effect or (b) elect to purchase the Securities which the
Company has agreed to sell hereunder. No action taken pursuant to this Section
11 shall relieve any Selling Stockholder so defaulting from liability, if any,
in respect of such default.
In the event of a default by the Selling Stockholder as referred to in this
Section 11, each of the U.S. Representatives and the Company shall have the
right to postpone Closing Time or Date of Delivery for a period not exceeding
seven days in order to effect any required change in the Registration Statement
or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of Delivery to
sell the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any non-
defaulting party; provided, however, that the provisions of Sections 4, 6 and 7
shall remain in full force and effect. No action taken pursuant to this Section
shall relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at World Financial Center, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇ ▇. ▇▇▇▇▇, ▇▇., with a
copy to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Attention: Registration Department, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and notices to the Company shall be directed
to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Secretary, (▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 13. Parties. This Agreement and the U.S. Terms Agreements shall
inure to the benefit of and be binding upon the Company, the Selling
Stockholder, the U.S. Representatives and, upon execution of the U.S. Terms
Agreement, the other U.S. Underwriters and their respective successors. Nothing
expressed or mentioned in this Agreement or the U.S. Terms Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
U.S. Underwriters, the Selling Stockholder and the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal
-32-
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the U.S. Terms Agreement or any provision herein
contained. This Agreement and the U.S. Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of U.S. Securities from any U.S. Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE U.S. TERMS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headlines. The Article and Section headings
herein and any table of contents are for convenience only and shall not affect
the construction hereof.
-33-
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Agreement, along with all counterparts, will become a binding agreement among
the U.S. Underwriters, the Company and the Selling Stockholder in accordance
with its terms.
Very truly yours,
CROSS TIMBERS OIL COMPANY
By:
---------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST
By:
---------------------------------------
As Attorney-in-Fact acting on behalf of
the Selling Stockholder
-34-
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-----------------------------
Authorized Signatory
For themselves and as the U.S. Representatives of the other U.S.
Underwriters named in the U.S. Terms Agreement.
SCHEDULE A
Initial
U.S. Underwriters U.S. Securities
----------------- ---------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated... 983,335
▇▇▇▇▇▇▇, Sachs & Co.................................. 983,333
Bear, ▇▇▇▇▇▇▇ & Co. Inc.............................. 983,333
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.. 983,333
▇▇▇▇▇▇ Brothers Inc.................................. 983,333
▇▇▇▇▇ ▇▇▇▇▇▇ Inc..................................... 983,333
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc............................ 100,000
---------
6,000,000
=========
-36-
SCHEDULE I
LIST OF SUBSIDIARIES
OF CROSS TIMBERS OIL COMPANY
Cross Timbers Operating Company (Texas)
Cross Timbers Energy Services, Inc. (Texas)
Cross Timbers Trading Company (Texas)
Ringwood Gathering Company (Delaware)
Timberland Gathering & Processing Company, Inc. (Texas)
WTW Properties, Inc. (Texas)
-37-
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. The Company was incorporated, exists and is in good standing under
the laws of the State of Delaware, with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement; the Company is qualified to do
business and is in good standing in the several states set forth on Exhibit
A to such opinion; and we have no knowledge that the nature of the
properties of the Company or the conduct of its business requires such
qualification in other jurisdictions or places, except in such
jurisdictions or places in which the Company is subject to no material
liability or disability by reason of its failure to be so qualified.
2. The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $.01 per share, and 25,000,000 shares of
preferred stock, par value $.01 per share; the issued and outstanding
capital stock of the Company is as set forth under the caption
"Capitalization" in the Prospectuses (except for subsequent issuances or
purchases pursuant to employee benefit plans or the exercise of convertible
securities); and the Common Stock conforms in all material respects as to
legal matters to the description thereof incorporated by reference into,
and included under the caption "Description of the Common Stock" in, the
Registration Statement. The form of certificate used to evidence the Common
Stock is in proper form and complies with all applicable statutory
requirements.
3. All shares of the issued and outstanding Common Stock have been
authorized and validly issued and are fully paid and non-assessable.
4. The Common Stock to be sold by the Company has been authorized for
issuance and sale to the Underwriters pursuant to the Purchase Agreements
and, when issued and delivered by the Company pursuant to the Purchase
Agreements against payment therefor in accordance with the terms of the
Purchase Agreements, will be validly issued, fully paid and non-assessable;
and the issuance of such Common Stock is not subject to any preemptive or
similar rights, whether arising by operation of law, under the Restated
Certificate of Incorporation or Bylaws of the Company or, to our knowledge,
any agreement or other instrument to which the Company is a party or by
which it may be bound.
A-1
5. Each subsidiary of the Company was incorporated, exists and is in
good standing under the laws of the State of Texas or Delaware, as
applicable, with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement; each subsidiary of the Company is qualified as a foreign
corporation to transact business and is in good standing in the
jurisdictions set forth on Exhibit B to such opinion; we have no knowledge
that the nature of the properties of any subsidiary or the conduct of their
respective businesses requires such qualification in other jurisdictions or
places, except in such jurisdictions or places in which the relevant
subsidiary is subject to no material liability or disability by reason of
its failure to be so qualified; and all the issued and outstanding capital
stock of each subsidiary has been authorized and validly issued, is fully
paid and non-assessable and is owned of record by the Company, directly or
through subsidiaries, free of any adverse claim within the meaning of
Article 8 of the Uniform Commercial Code.
6. The Company has corporate power and authority to enter into the
Purchase Agreements and the Terms Agreements, and the Purchase Agreements
and the Terms Agreements have been authorized, executed and delivered by
the Company.
7. The Registration Statement has become effective under the
Securities Act, and we have no knowledge of the issuance of any stop order
suspending the effectiveness of the Registration Statement or any
proceedings for such purpose pending before, or contemplated by, the
Commission.
8. At the time the Registration Statement became effective and at the
date hereof, the Registration Statement (other than the financial
statements and the supporting schedules included therein, as to which we
express no opinion) complied as to form in all material respects with the
requirements of the Securities Act and the regulations thereunder.
9. We have no knowledge of any legal or governmental proceedings,
including ordinary routine litigation incidental to the Company's business,
pending or threatened, that are required to be disclosed in the
Registration Statement, other than those discussed therein or that,
considered in the aggregate, would be material.
10. The descriptions in the Prospectuses relating to the revolving
credit agreement and other material agreements or legal proceedings and,
with respect to the International Prospectus, under the caption "Certain
United States Federal Income Tax Consequences to Non-U.S. Holders," to the
extent that they constitute matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, have been reviewed by us
and are correct in all material respects.
11. We have no knowledge (a) of any contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto, other than those
A-2
described or referred to therein or filed or incorporated by reference as
exhibits thereto or (b) that any default exits in the due performance or
observance by the Company of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred to, or
filed or incorporated by reference.
12. No consent, approval, authorization or order of any court or
governmental agency or body is required in connection with the offering,
issuance or sale by the Company of the Common Stock to the Underwriters
pursuant to the Purchase Agreements, except such as have been obtained
under the Securities Act and such as may be required under state securities
laws.
13. We have no knowledge that the execution, delivery and performance
of the Purchase Agreements and the consummation of the transactions
contemplated therein and compliance by the Company with its obligations
thereunder will conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject, or
that any such action will result in any violation of the provisions of the
Restated Certificate of Incorporation or Bylaws of the Company, or any
applicable law, administrative regulation or administrative or court
decree.
14. We have no knowledge that any persons have registration or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except (i) pursuant to the Registration Rights Agreement
dated May 11, 1993 among the Company and certain of its stockholders (the
"Registration Rights Agreement") and (ii) if the warrants issued to Amoco
Corporation are exercised, pursuant to the Warrant Agreement dated
September 30, 1997; the Company has complied with all provisions of the
Registration Rights Agreement with respect to the Registration Statement
and no stockholder has any right to require the registration of any
securities under the Securities Act pursuant to the Registration Statement
except for the Common Stock being sold to the Underwriters by the Selling
Stockholder.
15. Each document filed pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") (other than the financial statements and the financial
statement schedules included therein, as to which we express no opinion)
and incorporated or deemed to be incorporated by reference in the
Prospectuses complied when so filed as to form in all material respects
with the Exchange Act and the regulations thereunder.
A-3
16. A Custody Agreement has been executed and delivered by the Selling
Stockholder and the Custodians, and the Custody Agreement constitutes a
legal, valid and binding agreement of the Custodians and the Selling
Stockholder enforceable in accordance with its terms; the Purchase
Agreements have been executed and delivered by ▇. ▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, as attorneys-in-fact for, and on behalf of, the Selling
Stockholder and constitute legal, valid and binding agreements of the
Selling Stockholder enforceable in accordance with their terms, except as
rights to indemnification and contribution under the Purchase Agreements
may be limited by applicable laws.
17. We have no knowledge of any consent, approval, authorization or
order of any court or governmental agency or body that is required for the
consummation of the transactions contemplated by the Purchase Agreements in
connection with the Common Stock to be sold by the Selling Stockholder
pursuant to the Purchase Agreements, except such as have been obtained
under the Securities Act and such as may be required under state securities
laws.
18. Immediately prior to the date hereof, the Selling Stockholder was
the record owner of the Common Stock to be sold on the date hereof by the
Selling Stockholder under the Purchase Agreements, and upon payment by the
Underwriters for such Common Stock in accordance with the Purchase
Agreements, the Underwriters will own such Common Stock free of any adverse
claim within the meaning of Article 8 of the Uniform Commercial Code.
Although we are not passing on, and do not assume any responsibility for,
the accuracy or completeness of the statements in the Registration Statement and
Prospectuses (except with respect to paragraphs 2, 8, 10 and 15 above), we
advise you that on the basis of our participation in conferences with the
officers and employees of the Company, and representatives of, and counsel for,
the Underwriters at which the contents of the Registration Statement were
discussed, no facts have come to our attention that lead us to believe that the
Registration Statement (including information deemed to be part of the
Registration Statement pursuant to Rule 434, but excluding financial statements,
the notes thereto and the related schedules and other financial data included
therein or incorporated by reference therein and information relating to
estimated natural resource reserves, the estimated future net revenues therefrom
and the discounted present value of such estimated future net revenues included
therein or incorporated by reference therein, as to which we have not been asked
to comment), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectuses (other than the financial statements, the notes thereto and the
related schedules and other financial data included therein or incorporated by
reference therein and information relating to estimated natural resource
reserves, the estimated future net revenues therefrom and the discounted present
value of such estimated future net revenues included therein or incorporated by
reference therein, as to which we have not been asked to comment), as of its
date or the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a
A-4
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall
not state that (i) it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991) or (ii) with respect to any opinions expressed to
the knowledge of such counsel, such knowledge is restricted to matters known by
a limited number of attorneys of such counsel.
A-5
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) A Custody Agreement has been duly executed and delivered by
the Selling Stockholder and such Custody Agreement constitutes a valid
and binding agreement of each of the Selling Stockholder enforceable in
accordance with its terms; and the execution and delivery of this
Agreement has been duly authorized by the Selling Stockholder and, when
executed and delivered by the Custodian as attorney-in-fact for, and on
behalf of, the Selling Stockholder, will constitute a valid and binding
agreement of Selling Stockholder enforceable in accordance with its terms
(such counsel may except from the opinion in this clause the application
of bankruptcy, insolvency, moratorium or other similar laws affecting
creditors' rights generally and may limit such opinion with respect to
the availability of equitable remedies and the enforceability of
provisions providing for indemnification for violations of federal
securities laws);
(ii) The sale of the Securities to be sold by the Selling
Stockholder hereunder, the compliance by the Selling Stockholder with all
of the provisions of this Agreement and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound, or to which any of the property
or assets of the Selling Stockholder is subject, nor will such actions
result in any violation of the provisions of the certificate or articles
of incorporation or by-laws of the Selling Stockholder, if the Selling
Stockholder is a corporation, the agreement of partnership of such
Selling Stockholder, if such Selling Stockholder is a partnership, or the
agreement or declaration of trust of such Selling Stockholder, if such
Selling Stockholder is a trust, or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Securities to be sold by the Selling Stockholder hereunder, except such
as have been obtained under the 1933 Act and such as may be required
under state securities laws in connection with the purchase and
distribution of such Securities by the Underwriters;
(iv) Immediately prior to Closing Time, the Selling Stockholder
had good and valid title to the Securities to be sold at Closing Time by
such Selling
B-1
Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to
sell, assign, transfer and deliver the Securities to be sold by the
Selling Stockholder hereunder; and
(v) Good and valid title to such Securities, free and clear of
all liens, encumbrances, equities or claims, has been transferred to each
of the several Underwriters who have purchased such Securities in good
faith and without notice of any such lien, encumbrance, equity or claim
or any other adverse claim within the meaning of the Uniform Commercial
Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States and
in rendering the opinion in subparagraph (iv) such counsel may rely upon
a certificate of the Selling Stockholder in respect of matters of fact as
to ownership of and liens, encumbrances, equities or claims on the
Securities to be sold by such Selling Stockholder, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such certificate.
B-2
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
1,500,000 Shares
of
Common Stock
TERMS AGREEMENT
TO
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
April 21, 1998
To: Cross Timbers Oil Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Cross Timbers Oil Company, a Delaware corporation
(the "Company") and the ▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust (the "Selling Stockholder"),
propose to issue and sell 1,440,690 and 59,310 shares, respectively, of the
Company's common stock, par value $0.01 per share (the "Common Stock", such
securities also being hereinafter referred to as the "Initial International
Securities") and, at our option, the Company proposes to issue and sell an
additional 225,000 shares of Common Stock to be used solely to cover any
overallotments (the "International Option Securities", and together with the
Initial International Securities, the "International Securities") pursuant to
the International Purchase Agreement, dated April 21, 1998, among the Company,
the Selling Stockholder and the U.S. Representatives named herein.
Subject to the terms and conditions set forth or incorporated by
reference herein, we the underwriters named on Schedule A hereto (the
"International Managers") offer to purchase, severally and not jointly, the
1,500,000 shares of Initial International Securities opposite our names on
Schedule A hereto at the purchase price set forth below, and a proportionate
share of the 225,000 shares of International Option Securities set forth below,
to the extent any are purchased.
The International Securities shall have the following terms:
TITLE: Common Stock
NUMBER OF INITIAL INTERNATIONAL SECURITIES: 1,500,000
NUMBER OF INTERNATIONAL OPTION SECURITIES: 225,000
PUBLIC OFFERING PRICE PER SHARE: $19.50
PURCHASE PRICE PER SHARE: $18.575
LISTING REQUIREMENTS: New York Stock Exchange
BLACK-OUT PROVISIONS: None.
LOCK-UP PROVISIONS: In addition to the agreement of the Company and the Selling
Stockholder contained in Section 3(j) and Section 1(c)(4),
respectively, of the International Purchase Agreement, the
Company and the Selling Stockholder will not, for a period
of 90 days from the date of this Terms Agreement, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇
Sachs, directly or indirectly, offer, sell, or otherwise
dispose of or grant any option with respect to, pledge, or
hypothecate any shares of Common Stock or securities
convertible into Common Stock, except for the exercise of
options granted pursuant to existing employee plans, and a
lock-up agreement to the effect thereto shall be delivered
pursuant to Section 5(l) prior to the Closing Time for the
Selling Stockholder or the Company.
CLOSING DATE AND LOCATION: Offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
-2-
All of the provisions contained in the document attached as Annex I
hereto entitled "Cross Timbers Oil Company -- Common Stock -- International
Purchase Agreement" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this International Terms Agreement to
the same extent as if such provisions had been set forth in full herein. Terms
defined in such document are used herein as therein defined.
-3-
Please accept this offer no later than 5:00 o'clock P.M. (New York
City time) on April 21, 1998 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
BEAR ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
--------------------------------------------
Authorized Signatory
Acting on behalf of themselves and as the Lead Managers
named in the International Purchase Agreement
Accepted:
CROSS TIMBERS OIL COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST
By:
---------------------------------------
As Attorney-in-Fact acting on behalf
of the Selling Stockholder
-4-
SCHEDULE A
Initial
International Managers International Securities
---------------------- ------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International............................. 250,000
▇▇▇▇▇▇▇ Sachs International............................. 250,000
Bear ▇▇▇▇▇▇▇ International Limited...................... 250,000
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International.............. 250,000
▇▇▇▇▇▇ Brothers International (Europe).................. 250,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc........................................ 250,000
---------
1,500,000
-5-
ANNEX I
[International Purchase Agreement]
-6-
================================================================================
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
1,500,000 SHARES OF COMMON STOCK
--------------------------------
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
Dated: April 21, 1998
================================================================================
TABLE OF CONTENTS
INTERNATIONAL PURCHASE AGREEMENT.............................................. 1
SECTION 1. Representations and Warranties.................................... 4
(a) Representations and Warranties by the Company..................... 4
(1) Compliance with Registration Requirements................... 4
(2) Incorporated Documents...................................... 5
(3) Independent Accountants..................................... 5
(4) Financial Statements........................................ 6
(5) No Material Adverse Change in Business...................... 6
(6) Good Standing of the Company................................ 6
(7) Good Standing of Subsidiaries............................... 7
(8) Capitalization.............................................. 7
(9) Authorization of Agreements................................. 7
(10) Authorization of Common Stock............................... 7
(11) Absence of Defaults and Conflicts........................... 8
(12) Violation of Law............................................ 8
(13) Absence of Proceedings...................................... 8
(14) Accuracy of Exhibits........................................ 9
(15) Descriptions of the Securities.............................. 9
(16) Absence of Further Requirements............................ 9
(17) Possession of Licenses and Permits.......................... 9
(18) Title to Property........................................... 9
(19) Tax Returns.................................................10
(20) Environmental Laws..........................................10
(21) Internal Accounting Controls................................11
(22) Insurance...................................................11
(23) No Stabilization............................................11
(24) Investment Company Act; Public Utility Holding Company Act..11
(25) Proved Reserve Estimates....................................12
(26) No Outstanding Registration Rights..........................12
(27) Derivatives Business........................................12
(28) Compliance with Cuba Act....................................12
(29) Absence of Labor Dispute....................................13
(30) ERISA.......................................................13
(31) Unlawful Contributions......................................13
(32) Possession of Intellectual Property.........................13
(b) Officers' Certificates............................................14
(c) Representations and Warranties by the Selling Stockholder.........14
(1) Authorization of Agreements.................................14
(2) Due Execution...............................................14
(3) Good Title..................................................14
(4) Restriction on Sale of Securities...........................15
(5) Accurate Disclosure.........................................15
-i-
(6) Absence of Manipulation.....................................15
(7) Certificates Suitable for Transfer..........................15
(8) No Association with NASD....................................16
(d) Selling Stockholder's Certificates................................17
SECTION 2. Sale and Delivery to Underwriters; Closing........................17
(a) Initial Securities................................................17
(b) Option Securities.................................................17
(c) Payment...........................................................18
(d) Denominations; Registration.......................................18
SECTION 3. Covenants of the Company..........................................18
(a) Compliance with Securities Regulations and Commission Requests....18
(b) Filing of Amendments..............................................19
(d) Delivery of Prospectus............................................19
(e) Continued Compliance with Securities Laws.........................20
(f) Earnings Statement................................................20
(g) Use of Proceeds...................................................20
(h) Listing...........................................................20
(i) Restriction on Sale of Securities.................................21
(j) Reporting Requirements............................................21
SECTION 4. Payment of Expenses...............................................21
(a) Expenses..........................................................21
(b) Expenses of the Selling Stockholder...............................21
(c) Termination of Agreement..........................................21
SECTION 5. Conditions of International Managers' Obligations.................21
(a) Effectiveness of Registration Statement...........................22
(b) Opinion of Counsel for Company....................................22
(c) Opinion of Counsel for the Selling Stockholder....................22
(d) Opinion of Counsel for International Managers.....................22
(e) Officers' Certificate.............................................23
(f) Certificate of Selling Stockholder................................23
(g) Independent Engineer's Comfort Letters............................23
(h) Bring-down Comfort Letter.........................................23
(i) Accountant's Comfort Letters......................................23
(j) Bring-down Comfort Letter.........................................23
(k) Approval of Listing...............................................24
(l) Lock-up Agreements................................................24
(m) Purchase of Initial U.S. Securities...............................24
(n) Conditions to Purchase of International Option Securities.........24
(1) Officers' Certificate.......................................24
(3) Opinion of Counsel for Company..............................24
(4) Opinion of Counsel for Underwriters.........................24
-ii-
(5) Bring-down Comfort Letter...................................25
(o) Additional Documents..............................................25
(p) Termination of Terms Agreements...................................25
SECTION 6. Indemnification...................................................25
(a) Indemnification of Underwriters by the Company....................25
(c) Indemnification of Company, Directors and Officers and Selling
Stockholder.......................................................27
(d) Actions against Parties; Notification.............................27
(e) Settlement without Consent if Failure to Reimburse................28
SECTION 7. Contribution......................................................29
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....30
SECTION 9. Termination.......................................................30
(a) Purchase Agreement................................................30
(b) Terms Agreement...................................................30
(c) Liabilities.......................................................31
SECTION 10. Default by One or More of the International Managers..............31
SECTION 11. Default by the Selling Stockholder or the Company.................32
SECTION 12. Notices...........................................................33
SECTION 13. Parties...........................................................33
SECTION 14. GOVERNING LAW AND TIME............................................33
SECTION 15. Effect of Headlines...............................................33
-iii-
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
1,500,000 Shares
of
Common Stock
(Par value $0.01 per share)
INTERNATIONAL PURCHASE AGREEMENT
April 21, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as Lead Managers of the several International Managers
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Cross Timbers Oil Company, a Delaware corporation (the "Company"), and the
▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust (the "Selling Stockholder") propose to issue and sell up to
1,440,690 and 59,310 shares, respectively, of common stock, par value $0.01 per
share (the "Common Stock"), of the Company.
As used herein, "Initial International Securities" shall mean the 1,500,000
shares of Common Stock to be initially sold to the International Managers (as
defined herein); "International Option Securities" shall mean 225,000 additional
shares of Common Stock to be sold to the International
Managers to cover over-allotments; and "International Securities" shall mean the
Initial International Securities and the International Option Securities.
The Company and the Selling Stockholder shall offer the International
Securities through ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇
▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Bear ▇▇▇▇▇▇▇ International Limited,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ International, ▇▇▇▇▇▇ Brothers International
(Europe) and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and will enter into an agreement (the
"International Terms Agreement") providing for the sale of the International
Securities to, and the purchase and offering thereof by, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International Limited, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ International, ▇▇▇▇▇▇ Brothers International (Europe) and ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and each of the other Underwriters named in Schedule A to the International
Purchase Agreement (collectively, the "International Managers," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇▇ Sachs International, Bear
▇▇▇▇▇▇▇ International Limited, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International,
▇▇▇▇▇▇ Brothers International (Europe) and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as
representatives (in such capacity, the "Lead Managers"), with respect to the
issue and sale by the Company and the Selling Stockholder and the purchase by
the International Managers, acting severally and not jointly, of the respective
numbers of shares of Initial International Securities set forth in said Schedule
A to the International Purchase Agreement, and with respect to the grant by the
Company to the International Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of the
International Option Securities to cover over-allotments, if any.
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement"), subject to the completion of a related terms agreement
thereto (the "U.S. Terms Agreement") (collectively, the International Terms
Agreement and the U.S. Terms Agreement are referred to herein as the "Terms
Agreements"), providing for the offering by the Company and the Selling
Stockholder of an aggregate of 6,000,000 shares of Common Stock (the "Initial
U.S. Securities") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters") for which ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as U.S. Representatives (the
"U.S. Representatives") and the grant by the Company to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or part of the
U.S. Underwriters' pro rata portion of up to 900,000 additional shares of Common
Stock solely to cover overallotments, if any (the "U.S. Option Securities" and,
together with the International Option Securities, the "Option Securities").
The Initial U.S. Securities and the U.S. Option Securities are hereinafter
called the "U.S. Securities".
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
-2-
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇..
The Company and the Selling Stockholder understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-46909) and pre-
effective Amendment No. 1 thereto for the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such post-effective amendments thereto as may be
required prior to the execution of the Terms Agreements. Such registration
statement (as so amended, if applicable) has been declared effective by the
Commission. Promptly after execution and delivery of this Agreement and the
Terms Agreements, the Company will either (i) prepare and file a prospectus
supplement in accordance with paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form of
International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting" and the inclusion in the Form
of International Prospectus of a section under the caption "Certain United
States Federal Tax Consequences to Non-U.S. Holders.") The information included
in any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective or included in a prospectus supplement filed in respect of such
registration statement (a) pursuant to Rule 424(b) is referred to as "Rule
424(b) Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to
as "Rule 434 Information." Each Form of U.S. Prospectus and Form of
International Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 424(b)
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement (as so amended, if
applicable), including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule
424(b) Information and the Rule 434 Information, as applicable, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
-3-
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 of the 1933 Act Regulations is relied on, the
terms "U.S. Prospectus" and "International Prospectus" shall refer to the
preliminary U.S. Prospectus dated April 13, 1998 and the preliminary
International Prospectus dated April 13 , 1998, respectively, each together with
the applicable Term Sheet and all references in this Agreement and the Terms
Agreements to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement and the Terms Agreements,
all references to the Registration Statement, any preliminary prospectus, the
U.S. Prospectus, the International Prospectus or any Term Sheet or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of
International Prospectus and Form of U.S. Prospectus) or the Prospectuses (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of International Prospectus and Form of U.S. Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Lead Managers, as of the date hereof, and to each
International Manager, as of the date thereof, as of the Closing Time referred
to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to
in Section 2(b) hereof, and agrees with each International Manager, as follows:
(1) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement and any post-
effective amendments thereto (including, the filing of the Company's most
recent Annual Report on Form 10-K with the Commission (the "Annual Report
on Form 10-K")) became effective and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of Delivery),
the Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and
-4-
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Neither of the Prospectuses nor
any amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, the representations and warranties
in this subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished in writing by any
International Manager through the Lead Managers expressly for use in the
Registration Statement or the Prospectuses.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the International Prospectus
delivered to the International Managers for use in connection with the
offering of the International Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, included the most recent Annual
Report of the Company on Form 10-K filed with the Commission and each
Current Report of the Company on Form 8-K filed with the Commission since
the end of the fiscal year to which such Annual Report relates. The
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectuses, when they became effective or
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations") and, when read together with the other information in the
Prospectuses, at the date of the Prospectuses, and at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery) did not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement and the
-5-
Prospectuses are independent certified public accountants with respect to
the Company and its Subsidiaries within the meaning of Regulation S-X under
the 1933 Act.
(4) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Registration Statement and the
Prospectuses, together with the related schedules and notes, as well as
those financial statements, schedules and notes of any other entity
included therein, present fairly in all material respects the financial
position of the Company and its consolidated Subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated Subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement and the
Registration Statement and Prospectuses present fairly in all material
respects in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial information
included or incorporated by reference in the Registration and the
Prospectuses present fairly in all material respects the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included or incorporated by reference in the
Registration Statement and the Prospectuses. In addition, any pro forma
financial statements of the Company and its Subsidiaries and the related
notes thereto included or incorporated by reference in the Registration
Statement and the Prospectuses present fairly in all material respects the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise (a "Material Adverse Effect"),
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
Subsidiaries, other than those arising in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries
considered as one enterprise and (C) except for regular quarterly dividends
on the common stock, par value $0.01 per share, of the Company (the "Common
Stock") and on the Series A Convertible Preferred Stock, par value $0.01
per share, of the Company (the "Series A Preferred Stock"), in amounts per
share that are consistent with past practice, respectively, there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the state of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct
-6-
its business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Agreement and the
applicable Terms Agreements. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not result in
a Material Adverse Effect.
(7) Good Standing of Subsidiaries. The only direct or indirect
Subsidiaries of the Company are corporations listed on Schedule I hereto
(each, a "Subsidiary" and collectively, the "Subsidiaries"). Each
Subsidiary has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its organization,
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as otherwise stated
in the Registration Statement and the Prospectuses, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
is validly issued, fully paid and non-assessable and is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity other than
the pledges to banks under the loan agreements of the Company. None of the
outstanding shares of capital stock of the Subsidiaries was issued in
violation of preemptive or other similar rights arising by operation of
law, under the charter or by-laws of any Subsidiary or under any agreement
to which the Company or any Subsidiary is a party.
(8) Capitalization. The issued and outstanding capital stock of
the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances thereof, if any, contemplated under this Agreement and the U.S.
Purchase Agreement, pursuant to employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses).
(9) Authorization of Agreements. This Agreement and the U.S.
Purchase Agreement have been, and the related Terms Agreements thereto, as
of the date thereof, will have been, duly authorized, executed and
delivered by the Company.
(10) Authorization of Common Stock. The Securities being sold to
the Underwriters pursuant to the respective Terms Agreements have been, or
as of the date of the Terms Agreements will have been, duly authorized by
the Company for issuance and sale to the International Managers pursuant to
this Agreement and the International Terms Agreement and to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement and the U.S. Terms
Agreement. Such Securities, when issued and delivered by the Company
pursuant to this Agreement, the U.S. Purchase Agreement and the applicable
Terms Agreements, against payment of the consideration therefore specified
in such Terms
-7-
Agreements, will be validly issued, fully paid and non-
assessable and will not be subject to preemptive or other similar rights
arising by operation of law, under the charter and by-laws of the Company
or under any agreement to which the Company or any of its Subsidiaries is a
party, or otherwise. No holder of the Securities will be subject to
personal liability by reason of being such a holder.
(11) Absence of Defaults and Conflicts. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, "Agreements and
Instruments"), except for such defaults as would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement,
the U.S. Purchase Agreement and the applicable Terms Agreements and any
other agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Registration Statement and the Prospectuses and
the consummation of the transactions contemplated herein and in the
Registration Statement and the Prospectuses (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described under the caption "Use of Proceeds") and compliance
by the Company with its obligations under this Agreement and the U.S.
Purchase Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any assets,
properties or operations of the Company or any of its Subsidiaries pursuant
to, any Agreements and Instruments, except for such conflicts, breaches,
defaults, events or liens, charges or encumbrances that, singly or in the
aggregate, would not result in a Material Adverse Effect, nor will such
action result in any violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their assets or properties,
which violation would result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or any of its Subsidiaries. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Subsidiary.
(12) Violation of Law. Neither the Company nor any Subsidiary is in
violation of any law, ordinance, governmental rule or regulation or court
decree to which it may be subject, which violation might result in a
Material Adverse Effect.
(13) Absence of Proceedings. Except as disclosed in the
Registration Statement and the Prospectuses, there is no action, suit,
proceeding, inquiry or investigation before or
-8-
by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any Subsidiary which is required to be disclosed
in the Registration Statement and the Prospectuses (other than as stated
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the assets or properties of the Company and its
Subsidiaries, considered as one enterprise, or the consummation of this
Agreement, the U.S. Purchase Agreement and the applicable Terms Agreements
or the transactions contemplated herein or therein. The aggregate of all
pending legal or governmental proceedings to which the Company or any
Subsidiary thereof is a party or of which any of their respective assets or
properties is the subject which are not described in the Registration
Statement and the Prospectuses, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(14) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or filed as
required.
(15) Descriptions of the Securities. The Securities being sold
pursuant to the Terms Agreements, as of the date of the Prospectuses, will
conform in all material respects to the statements relating thereto
contained in the Prospectuses.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations under this Agreement, the U.S. Purchase Agreement or the Terms
Agreements or in connection with the transactions contemplated under this
Agreement, the U.S. Purchase Agreement or the Terms Agreements, except such
as have been already obtained or as may be required under state securities
laws.
(17) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now conducted by them; the Company and
its Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
-9-
(18) Title to Property. The Company and its Subsidiaries have good
and defensible title to their producing oil and gas properties, and any gas
gathering properties that it owns, free and clear of all liens,
encumbrances and defects, except (a) those described in the Registration
Statement and the Prospectuses, (b) liens securing taxes and other
governmental charges, or claims of materialmen, mechanics and similar
persons, not yet due and payable, (c) liens and encumbrances under
operating agreements, unitization and pooling agreements, and gas sales
contracts, securing payment of amounts not yet due and payable and of a
scope and nature customary in the oil and gas industry and (d) liens,
encumbrances and defects that do not in the aggregate materially affect the
value of such oil and gas properties or gas gathering properties or
materially interfere with the use made or proposed to be made of such
properties by the Company and its Subsidiaries. Except to the extent
described in the Registration Statement and the Prospectuses, the oil, gas
and mineral leases, coal methane leases, options to lease, drilling
concessions or other property interests therein held by the Company and its
Subsidiaries reflect in all material respects the right of the Company and
its Subsidiaries, as the case may be, to explore or receive production from
the undeveloped properties described in the Registration Statement and the
Prospectuses, and the care taken by the Company and its Subsidiaries with
respect to acquiring or otherwise procuring such leases, options to lease,
drilling concessions and other property interests was generally consistent
with standard industry practices for acquiring or procuring leases and
interests therein to explore such for hydrocarbons. All other leases and
subleases material to the business of the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or any of its
Subsidiaries holds properties described in the Registration Statement and
the Prospectuses are in full force and effect, and neither the Company nor
any of its Subsidiaries has actual notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any Subsidiary under any of such leases or subleases, or affecting or
questioning the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(19) Tax Returns. All United States federal income tax returns of
the Company and its Subsidiaries required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid, except assessments against which appeals
have been or will be promptly taken and as to which adequate reserves have
been provided. The Company and its Subsidiaries have filed all other tax
returns that are required to have been filed by them pursuant to applicable
foreign, state, local or other law except insofar as the failure to file
such returns would not result in a Material Adverse Effect, and has paid
all taxes due pursuant to such returns or pursuant to any assessment
received by the Company and its Subsidiaries, except for such taxes, if
any, as are being contested in good faith and as to which adequate reserves
have been provided. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability for any
years not finally determined are adequate to meet any assessments or re-
assessments for additional income tax for any years not finally determined,
except to the extent of any inadequacy that would not result in a Material
Adverse Effect.
(20) Environmental Laws. Except as described in the Registration
Statement and the Prospectuses and except such matters as would not, singly
or in the aggregate, result in
-10-
a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative order, consent, decree or judgment
thereof, including any judicial or administrative order, consent, decree or
judgment relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to the knowledge of
the Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or
Environmental Laws.
(21) Internal Accounting Controls. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(22) Insurance. The Company and its Subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or
similar business, and all such insurance is in full force and effect.
(23) No Stabilization. Neither the Company nor any of its officers,
directors or controlling persons has taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(24) Investment Company Act; Public Utility Holding Company Act.
The Company is not, and upon the issuance and sale of the Securities as
herein contemplated and
-11-
the application of the net proceeds therefrom as described in the
Prospectuses will not be (A) an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission promulgated thereunder (the "1940 Act") or (B) a "holding
company" or "affiliate" of a "holding company" or "public utility," as such
terms are defined in the Public Utility Holding Company Act of 1935, and
the rules and regulations of the Commission promulgated thereunder (the
"PUHCA").
(25) Proved Reserve Estimates. The information supplied by the
Company to the independent petroleum engineering consultants for the
Company for purposes of preparing the reserve reports and estimates of such
consultants included in the Registration Statement and the Prospectuses,
including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to current
and future operations and sales of production, was true and correct in all
material respects on the date supplied and was prepared in accordance with
customary industry practices; ▇▇▇▇▇▇ and ▇▇▇▇▇, Ltd., independent petroleum
engineers, who prepared estimates of the extent and value of proved oil and
natural gas reserves of the Company are independent with respect to the
Company. The proved reserve report and estimates relating to the East
Texas Properties (as defined in the Prospectuses) as of December 31, 1997,
included in the Registration Statement and the Prospectuses were, subject
to the following sentence, true and correct in all material respects as of
the date of the Prospectuses and were prepared by Company petroleum
engineers in accordance with customary industry practices. Such proved
reserve reports were based on information supplied to the Company by the
owner of the East Texas Properties for the purposes of preparing such
reserve reports and estimates, including, without limitation, production,
costs of operation and development, current prices of production,
agreements relating to current and future operations and sales of
production, and, to the knowledge of the Company, such information was true
and correct in all material respects.
(26) No Outstanding Registration Rights. Other than the
Registration Rights Agreement, dated as of May 11, 1993, among the Company
and certain stockholders of the Company (the "Registration Rights
Agreement") and certain registration rights granted in respect of a Warrant
Agreement dated December 1, 1997 by and between the Company and Amoco
Corporation, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the 1933 Act with respect to
any securities of the Company or any of its Subsidiaries, owned or to be
owned, by such person or to require the Company to include such securities
with any securities being registered pursuant to any registration statement
filed by the Company under the 1933 Act.
(27) Derivatives Business. The internal controls and policies used
in connection with the natural gas derivatives business of the Company and
each Subsidiary are reasonable and to the best knowledge of the Company,
adequate in light of the business conducted.
-12-
(28) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
or is exempt therefrom.
(29) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
Subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has
violated (i) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees applicable to the
Company or any of its Subsidiaries or (ii) any applicable wage or hour laws
in any manner, which violation could reasonably be expected to have a
Material Adverse Effect.
(30) ERISA. The Company and each of its Subsidiaries is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act, as amended, or
the rules and regulations promulgated thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company or any of its
Subsidiaries would have any material liability; neither the Company nor any
of its Subsidiaries has incurred or expects to incur material liability
under (i) Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(31) Unlawful Contributions. Neither the Company nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person,
acting on behalf of the Company or any of its Subsidiaries, has used any
corporate funds during the last five years for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977; or made any
illegal bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(32) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the
-13-
Company nor any of its Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its Subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any Subsidiary and delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Lead Managers or
to counsel for the International Managers in connection with the offering of the
International Securities shall be deemed a representation and warranty by the
Company to each International Manager as to the matters covered thereby on the
date of such certificate.
(c) Representations and Warranties by the Selling Stockholder. The
Selling Stockholder represents and warrants to each Underwriter, as of the date
hereof, and as of the Closing Time, and agrees with each Underwriter, as
follows:
(1) Authorization of Agreements. All consents, approvals,
authorizations and orders necessary for the execution and delivery and
performance by such Selling Stockholder of this Agreement and the Custody
Agreement and Power of Attorney (collectively, the "Power of Attorney and
Custody Agreement") hereinafter referred to, and for the sale and delivery
of the Securities to be sold by such Selling Stockholder hereunder, have
been obtained; and such Selling Stockholder has full right, power and
authority to enter into this Agreement and the Power of Attorney and
Custody Agreement and to sell, assign, transfer and deliver the Securities
to be sold by such Selling Stockholder hereunder free and clear of all
adverse claims. The sale of the Securities to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement and the Power of Attorney and
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach of
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of such Selling Stockholder if such Selling Stockholder is a
corporation, or the agreement of partnership of such Selling Stockholder if
such Selling Stockholder is a partnership, or the agreement or declaration
of trust if such Selling Stockholder is a trust, or any statute or any
order, rule or regulation of any court or government agency or body having
jurisdiction over such Selling Stockholder or the property of such Selling
Stockholder.
(2) Due Execution. This Agreement and the related International
Terms Agreement has been duly executed and delivered by such Selling
Stockholder.
-14-
(3) Good Title. Such Selling Stockholder now has, and at the
Closing Time (and at each Date of Delivery, if applicable) will have, good
and valid title to the Securities being sold by such Selling Stockholder
hereunder, free and clear of any pledge, lien, security interest,
encumbrance, adverse claim or equity whatsoever, and now has and at the
Closing Time (and at each Date of Delivery, if applicable) will have, full
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Securities being sold by such Selling
Stockholder hereunder; and upon delivery of the Securities being sold by
such Selling Stockholder hereunder and payment of the purchase price as
herein contemplated, such Selling Stockholder will transfer to the several
Underwriters good and valid title to such Securities free and clear of any
pledge, lien, security interest, encumbrance, adverse claim or equity
whatsoever, except liens placed thereon by the Underwriters. No person has
any right to acquire from such Selling Stockholder any Securities to be
sold hereunder and such Selling Stockholder is under no obligation, whether
absolute or contingent, to sell any such Securities to any person, except
as contemplated by this Agreement.
(4) Restriction on Sale of Securities. During a period of 90 days
from the date of the International Terms Agreement, such Selling
Stockholder, if such Selling Stockholder owns shares of Common Stock
immediately following the Closing Time (as hereinafter defined), will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold
hereunder.
(5) Accurate Disclosure. The Registration Statement, at the time
it becomes effective and at Closing Time, will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, and at Closing Time, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
only apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information related
to such Selling Stockholder furnished to the Company or the Underwriters in
writing by such Selling Stockholder expressly for use in the Registration
Statement or Prospectus.
(6) Absence of Manipulation. The Selling Stockholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or
-15-
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(7) Certificates Suitable for Transfer. Certificates for all of
the Securities to be sold by such Selling Stockholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
(8) No Association with NASD. Neither such Selling Stockholder nor
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities
Dealers, Inc.), any member of the National Association of Securities
Dealers, Inc.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to ▇▇▇▇▇▇▇ ▇▇▇▇▇ prior to or at the Closing Time a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The Selling Stockholders represents and warrants that Common Stock
constituting all of the Securities to be sold by such Selling Stockholder
hereunder are to be held in custody under a Custody Agreement, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Stockholder to ▇. ▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and each of them as
custodian (the "Custodian"), and that such Selling Stockholder has duly executed
and delivered a Custody Agreement containing a power of attorney appointing ▇.
▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ , and each of them as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement and a International Terms Agreement on behalf
of such Selling Stockholder, to determine the purchase price to be paid by the
Underwriters to the Selling Stockholder as provided in such International Terms
Agreement, to authorize the delivery of the Securities to be sold by such
Selling Stockholder hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this Agreement
and the Power of Attorney and Custody Agreement, such authority as is fully set
forth in, and may be limited by, the Power of Attorney and Custody Agreement.
The Selling Stockholder specifically agrees that the Securities to
be held in custody for such Selling Stockholder under the Power of Attorney and
Custody Agreement will be subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the Attorneys-in-
Fact by the power of attorney contained in the Power of Attorney and Custody
Agreement, are to that extent irrevocable. The Selling Stockholders specifically
agrees that its obligations hereunder shall not be terminated by operation of
law, whether by the death or incapacity of any individual
-16-
Selling Stockholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such estate or
trust, or in the case of a partnership or corporation, by the dissolution of
such partnership or corporation, or by the occurrence of any other event. If the
Selling Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or if any
such partnership or corporation should be dissolved, or if any other such event
should occur, before the delivery of the Securities hereunder, certificates
representing the Securities shall be delivered by or on behalf of such Selling
Stockholder in accordance with the terms and conditions of this Agreement and of
the Power of Attorney and Custody Agreements, and actions taken by the
Attorneys-in-Fact pursuant to the powers of attorney in the Power of Attorney
and Custody Agreements shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred, regardless of whether
or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other event.
(d) Selling Stockholder's Certificates. Any certificate signed by
such Selling Stockholder and delivered to the Managers or to counsel for the
Underwriters shall be deemed a representation and warranty by such Selling
Stockholder to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. The several commitments of the International
Managers to purchase the Initial International Securities pursuant to the
International Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
(b) Option Securities. In addition, subject to the terms and conditions
herein set forth, the Company grant an option to the International Managers,
severally and not jointly, to purchase up to the number of International Option
Securities to cover over-allotments at a price per International Option Security
equal to the price per Initial International Security, less an amount equal to
any dividends or distributions declared by the Company and paid or payable on
the Initial International Securities but not payable on the International Option
Securities. Such option will expire 30 days after the date of such Terms
Agreements, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial International Securities upon notice by
▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company setting forth the number of International Option
Securities as to which the several International Managers are then exercising
the option and the time, date and place of payment and delivery for such
International Option Securities. Any such time and date of payment and delivery
(each, a "Date of Delivery") shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time (as hereinafter defined), unless otherwise
agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company. If the option is exercised as to
all or any portion of the International Option Securities, each of the
International Managers, severally and not jointly, will purchase that proportion
of the total number of International Option Securities then being purchased
which the number of Initial International Securities each such International
Manager has severally agreed to purchase as set forth
-17-
in such International Terms Agreement bears to the total number of Initial
International Securities, subject to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its
discretion shall make to eliminate any sales or purchases of a fractional number
or aggregate principal amount, as the case may be, of International Option
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial International Securities shall be made at the office of ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company, at 10:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date of the applicable
Terms Agreement (unless postponed in accordance with the provisions of Section
10 hereof), or such other time not later than ten business days after such date
as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Selling Stockholder and the
Company (such time and date of payment and delivery being herein called "Closing
Time").
In addition, in the event that the International Managers have exercised
their option to purchase any or all of the International Option Securities,
payment of the purchase price for, and delivery of such International Option
Securities, shall be made at the above-mentioned offices of ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, P.C., or at such other place as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇
and the Company, on the relevant Date of Delivery as specified in the notice
from ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company.
Payment shall be made to the Company and the Selling Stockholder by wire
transfer of immediately available funds to a bank account designated by the
Company and the Custodian pursuant to each Selling Stockholder's Power of
Attorney and Custody Agreement against delivery to the Lead Managers for the
respective accounts of the International Managers of the International
Securities to be purchased by them. It is understood that each International
Manager has authorized ▇▇▇▇▇▇▇ ▇▇▇▇▇, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the International
Securities which it has severally agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the
International Securities to be purchased by any International Manager whose
funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder.
(d) Denominations; Registration. The Initial International Securities
and certificates therefor and the International Option Securities, if any, and
certificates therefor shall be in such denominations and registered in such
names as the Lead Managers may request in writing at least one full business day
prior to the Closing Time or the relevant Date of Delivery, as the case may be.
The International Securities and certificates therefor and the International
Option Securities, if any, and certificates therefor will be made available for
examination and packaging by the Lead Managers in the City of New York not later
than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be.
-18-
SECTION 3. Covenants of the Company. The Company covenants with the
Lead Managers and with each International Manager participating in the offering
of International Securities, as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 415, Rule 424 and/or Rule 434, if and as applicable,
of the 1933 Act Regulations and will notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ immediately, and
confirm the notice in writing, of (i) the effectiveness of any post-
effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectuses, (ii) the receipt of any
comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424 and
will take such steps as it deems necessary to ascertain promptly whether
the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will
promptly file the Prospectus. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give ▇▇▇▇▇▇▇ ▇▇▇▇▇
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations), any Term Sheet, or any amendment, supplement or revision
to either the Prospectuses included in the Registration Statement at the
time it became effective or to the Prospectuses, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ with copies
of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which ▇▇▇▇▇▇▇ ▇▇▇▇▇ or counsel for the International Managers
shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Lead Managers and counsel for the International
Managers, without charge, (i) signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein), (ii) copies of the
Registration Statement and each amendment thereto in the form
electronically filed with the Commission pursuant to ▇▇▇▇▇ and (iii) signed
copies of all consents and certificates of experts, and will also deliver
to the Lead Managers, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the International Managers. The Registration
Statement and any amendments or supplements thereto furnished to the
International Managers will be identical to the
-19-
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the International Prospectus (as amended or supplemented) as such
U.S. Underwriter may reasonably request. The International Prospectus and
any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the U.S. Purchase
Agreement, the Terms Agreements, the Registration Statement and the
Prospectuses. If at any time when a Prospectus is required by the 1933 Act
or the 1934 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the International Managers or for
the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement any Prospectuses in order that the Prospectus will not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
any Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the International Managers, without charge,
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Earnings Statement. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its security holders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated by,
the last paragraph of Section 11(a) of the 1933 Act.
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(g) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(h) Listing. The Company will use its best efforts to effect the
listing of the Securities, prior to the Closing Time, on any national
securities exchange or quotation system if and as specified in the
applicable Terms Agreement.
(i) Restriction on Sale of Securities. During a period of 90 days
from the date of the Terms Agreement, the Company will not, without the
prior written consent of each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any Common Stock or any security convertible or
exchangeable into or exercisable for Common Stock (except for Common Stock
issued pursuant to this Agreement or pursuant to, or in connection with,
employee benefit plans or the exercise of convertible securities).
(j) Reporting Requirements. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations and the obligations
under this Agreement or the International Terms Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the printing and delivery to the International Managers of this
Purchase Agreement, the Terms Agreements, any Agreement Among Underwriters, and
such other documents as may be required in connection with the purchase, sale,
issuance or delivery of the International Securities, (iii) the preparation,
issuance and delivery of the International Securities and certificates for the
International Securities to the International Managers, including any transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the International Securities to the International Managers, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or agents
(including transfer agents and registrars), (v) the printing and delivery to the
U.S. Underwriters of copies of each preliminary prospectus, any Term Sheet, and
the Prospectuses and any amendments or supplements thereto, (vi) the fees and
expenses incurred in connection with the listing of the International
Securities, and (vii) the fees and expenses of the Attorneys-in-Fact and the
Custodian under the Power of Attorney and Custody Agreement.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including any
stamp duties, capital duties and stock transfer taxes, if any, payable upon the
sale of the Securities to the International Managers, and their transfer between
the International Managers pursuant to an agreement between such International
Managers, and the fees and disbursements of its counsel and accountants.
-21-
(c) Termination of Agreement. If the International Terms Agreement is
terminated by the Lead Managers in accordance with the provisions of Section 5
or Section 9(b)(i) or Section 11 hereof, the Company [and the Selling
Stockholder] shall reimburse the International Managers for all of their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the International Managers to purchase and pay for the
International Securities pursuant to the International Terms Agreement are
subject to the accuracy of the representations and warranties of the Company and
the Selling Stockholder contained in Section 1 hereof or in certificates of any
officer of the Company or any of its Subsidiaries or on behalf of the Selling
Stockholder delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act and
no proceedings for that purpose shall have been initiated or be pending or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the International Managers. A prospectus
containing information relating to the description of the International
Securities, the specific method of distribution and similar matters shall
have been filed with the Commission in accordance with Rule 424(b)(1), (2),
(3), (4) or (5), as applicable, or, if the Company has elected to rely upon
Rule 434 of the 1933 Act Regulations, a Term Sheet including the Rule 434
Information shall have been filed with the Commission in accordance with
Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Managers shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters, to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the International Managers may reasonably
request.
(c) Opinion of Counsel for the Selling Stockholder. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated as
of Closing Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Selling Stockholder,
in form and substance satisfactory to counsel for the Lead Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers, to the effect set forth in Exhibit B hereto
and to such further effect as counsel to the International Managers may
reasonably request.
(d) Opinion of Counsel for International Managers. At Closing
Time, the International Managers shall have received the favorable opinion,
dated as of Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other International Managers with respect
-23-
to the matters set forth in paragraphs (1), (2) (last sentence only), (4)
(provided that the second clause thereof shall be rendered solely in
respect of preemptive or other similar rights arising by operation of law
or under the certificate of incorporation or bylaws of the Company), (6)
(solely as to due authorization, execution and delivery by the Company of
the Purchase Agreements and the Terms Agreements), (7) and the penultimate
paragraph of Exhibit A hereto.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date of the Terms Agreements or since the respective dates
as of which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Lead Managers shall have received a certificate of the
Company, executed by the President or a Vice President of the Company and
the chief financial officer or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, (iii) the Company has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Time, (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or, to the Company's knowledge, threatened by the
Commission.
(f) Certificate of Selling Stockholder. At Closing Time, the Lead
Managers shall have received a certificate of an Attorney-in-Fact on behalf
of the Selling Stockholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of the Selling Stockholder contained
in Section 1(c) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of Closing Time and
(ii) the Selling Stockholder has complied in all material respects with all
agreements and all conditions or its part to be performed under this
Agreement at or prior to Closing Time.
(g) Independent Engineer's Comfort Letters. At the time of the
execution of the Terms Agreements, the Lead Managers shall have received
from ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd., independent petroleum engineers for the Company,
a letter dated such date, in form and substance satisfactory to the Lead
Managers.
(h) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from ▇▇▇▇▇▇ and ▇▇▇▇▇, Ltd. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section 5.
(i) Accountant's Comfort Letters. At the time of the execution of
the Terms Agreements, the Lead Managers shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance satisfactory
to the Lead Managers, together with signed or reproduced copies of such
letter for each of the International Managers, containing
-23-
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information in the Registration Statement and the
Prospectuses.
(j) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (i) of this Section 5, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Time.
(k) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing, subject only to official notice of
issuance, if and as specified in the International Terms Agreement.
(l) Lock-up Agreements. On the date of the Terms Agreements, the
Lead Managers shall have received, in form and substance satisfactory to
them, each lock-up agreement, if any, specified in the Terms Agreements as
being required to be delivered by the persons listed therein.
(m) Purchase of Initial U.S. Securities. Contemporaneously with
the purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(n) Conditions to Purchase of International Option Securities. If
the International Managers exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company and the
Selling Stockholder contained herein and the statements in any certificates
furnished by the Company and/or the Selling Stockholder hereunder shall be
true and correct as of each Date of Delivery, and, at the relevant Date of
Delivery, the Lead Managers shall have received:
(1) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Company, executed by the President or a Vice
President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
(2) Certificate of Selling Stockholder. A certificate, dated
such Date of Delivery, of an Attorney-in-Fact on behalf of the
Selling Stockholder confirming that the certificate delivered at the
Closing Time pursuant to Section 5(e) hereof remains true and
correct as of such Date of Delivery.
(3) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the Company, in form and
substance satisfactory
-24-
to counsel for the International Managers, dated such Date of
Delivery, relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b) hereof.
(4) Opinion of Counsel for Underwriters. The favorable
opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Underwriters,
dated such Date of Delivery, relating to the International Option
Securities and otherwise to the same effect as the opinion required
by Section 5(d) hereof.
(5) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, substantially in the same form and substance as the letter
furnished to the Lead Managers pursuant to Section 5(h) hereof,
except that the "specified date" on the letter furnished pursuant to
this paragraph shall be a date not more than three business days
prior to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
International Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Stockholder in connection with the
issuance and sale of the International Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Lead Managers
and counsel for the International Managers.
(p) Termination of Terms Agreements. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement and the International Terms Agreement (or, with
respect to the International Managers' exercise of any applicable over-
allotment option for the purchase of International Option Securities on a
Date of Delivery after the Closing Time, the obligations of the
International Managers to purchase the International Option Securities on
such Date of Delivery) may be terminated by the Lead Managers by notice to
the Company at any time at or prior to the Closing Time (or such Date of
Delivery, as applicable), and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except
that Sections 6 and 7 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company. (1) The
Company agrees to indemnify and hold harmless each International Manager
and each person, if any, who controls any International Manager within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue
-25-
statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any International Manager through the Lead Managers
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to
be a part thereof, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto); and provided,
further, that the Company will not be liable to an Underwriter with respect
to any preliminary Prospectus or Prospectuses to the extent that the
Company shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at
or prior to the Closing Time, a copy of the final Prospectus as then
amended or supplemented if (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Time to allow for
distribution by the Closing Time) to the Underwriters and the loss,
liability, claim, damage or expense of such Underwriter resulted form an
untrue statement or omission or alleged untrue statement or omission of a
material fact contained in or omitted from the preliminary Prospectus or
Prospectuses which
-26-
was corrected in the final Prospectus as, if applicable, amended or
supplemented prior to the Closing Time and such Prospectus was required by
law to be delivered at or prior to the written confirmation of sale of
Securities to such person and (ii) such failure to give or send such final
Prospectus by the Closing Time to the party or parties asserting such loss,
liability, claim, damage or expense would have constituted the sole defense
to the claim asserted by such person.
(b) Indemnification of the Underwriters by the Selling
Stockholder. The Selling Stockholder agrees to indemnify and hold harmless
each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto, including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable,) or any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information related to such Selling Stockholder furnished to the
Company by such Selling Stockholder expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be a part thereof, if applicable, or
any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto); provided, however, that the liability of such Selling
Stockholder under this subsection (b) shall be limited to the aggregate
gross proceeds received by such Selling Stockholder pursuant to the sale of
its Securities hereunder.
(c) Indemnification of Company, Directors and Officers and Selling
Stockholder. Each International Manager severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and the Selling Stockholder and each person, if any, who
controls any Selling Stockholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including
the Rule 430A Information and the Rule 434 Information deemed to be a part
thereof, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such International
Manager through the Lead Managers expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure
-27-
to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from
any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇
▇▇▇▇▇, and, in the case of parties indemnified pursuant to Section 6(b) and
6(c) above, counsel to the indemnified parties shall be selected by the
Company and the Selling Stockholder, respectively. In the case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that in connection with
such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel for all indemnified parties (in addition to
local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general
allegations or circumstances) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification
or contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
-28-
(e) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the International Managers, on the
other hand, from the offering of the International Securities pursuant to the
Terms Agreements or (ii) if the allocation provided by clause (i) 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 Stockholder, on the one hand, and of the
International Managers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder,
on the one hand, and the International Managers, on the other hand, in
connection with the offering of the International Securities pursuant to the
applicable Terms Agreements shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such International
Securities (before deducting expenses) received by the Company and the Selling
Stockholder and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the Prospectus, or, if Rule
434 is used, the corresponding location on the Term Sheets bear to the aggregate
public offering price of such International Securities as set forth on such
cover.
The relative fault of the Company and the Selling Stockholder, on the one
hand, and the International Managers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the International
Managers and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the International Managers agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the International Managers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses
-29-
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public exceeds the amount of any damages which such
International Manager has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or such Selling Stockholder. The International
Managers' respective obligations to contribute pursuant to this Section 7 are
several in proportion to the number of International Securities set forth
opposite their respective names on the International Terms Agreement, and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the International Terms Agreement or in certificates of officers of
the Company or any of its Subsidiaries or the Selling Stockholder submitted
pursuant hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any International
Manager or controlling person, or by or on behalf of the Company or the Selling
Stockholder, and shall survive delivery of and payment for the International
Securities.
SECTION 9. Termination.
(a) Purchase Agreement. This Agreement (excluding the Terms
Agreements) may be terminated for any reason at any time by the Company or
by the Lead Managers upon the giving of 30 days' prior written notice of
such termination to the other party hereto or as otherwise provided for
herein.
(b) Terms Agreement. The Lead Managers may terminate the
International Terms Agreement, by notice to the Company and the Selling
Stockholder, at any time at or prior to the Closing Time or any relevant
Date of Delivery, if (i) there has been, since the time of execution of the
Terms Agreement or since the respective dates as of which information is
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given in the International Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) there has occurred any material adverse change in the financial
markets in the United States or in the international financial markets, or
any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Lead Managers, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) trading in any
securities of the Company has been suspended or limited by the Commission
or the New York Stock Exchange, Inc., or if trading generally on the New
York Stock Exchange or the American Stock Exchange or in the over-the-
counter market has been suspended or limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for the prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any
other governmental authority, or (iv) a banking moratorium has been
declared by either Federal or New York authorities.
(c) Liabilities. If this Agreement or the International Terms
Agreement is terminated pursuant to this Section 9, such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 6 and 7 shall survive
such termination and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If one
or more of the International Managers shall fail at the Closing Time or the
relevant Date of Delivery, as the case may be, to purchase the Securities which
it or they are obligated to purchase under the applicable Terms Agreements (the
"Defaulted Securities"), then the Lead Managers shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
International Managers, or any other underwriters, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Lead Managers shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of International Securities to be purchased on such date
pursuant to such International Terms Agreement, the non-defaulting
International Managers shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations under such Terms Agreements bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date pursuant to
such International Terms Agreement, this Agreement (or, with respect to the
International Managers' exercise of the over-allotment option for the
purchase of International Option Securities on a Date of Delivery after the
Closing Time, the obligations of the International Managers to purchase,
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and the Company to sell, such International Option Securities on such Date
of Delivery) shall terminate without liability on the part of any non-
defaulting International Manager.
No action taken pursuant to this Section 10 shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the Terms Agreements or (ii) in the case of a Date of Delivery after the
Closing Time, a termination of the obligations of the International Managers to
purchase and the Company to sell the relevant International Option Securities,
as the case may be, either the Lead Managers or the Company shall have the right
to postpone the Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectuses or in any other
documents or arrangements. As used herein, the term "International Manager"
includes any person substituted for an International Manager under this Section
10.
SECTION 11. Default by the Selling Stockholder or the Company. (a) If
the Selling Stockholder shall fail at Closing Time or at the Date of Delivery to
sell and deliver the number of Securities which such Selling Stockholder is
obligated to sell hereunder, then the Company shall have the right, to the
extent permitted under the 1933 Act and the 1933 Act Regulations, to increase
the number of shares of Common Stock to be sold by it hereunder to equal the
number to be sold by the Company and the Selling Stockholder as set forth in
this Agreement, in which event the terms "Initial Securities" and "Securities"
as used herein shall be deemed to include the additional shares of Common Stock
to be sold by the Company; provided, however, that the Company shall have the
right set forth in this sentence only if the Company (i) amends or supplements
the Prospectus, to the extent required under the 1933 Act and the 1933 Act
Regulations, to reflect such increase in shares of Common Stock to be sold by
the Company and (ii) prior to the Closing Time, provides copies of such amended
Prospectus or supplement thereto to the International Managers on a timely basis
and in sufficient quantities in order for the Underwriters to comply with all
prospectus delivery obligations in connection therewith. If the Selling
Stockholder shall fail at Closing Time to sell and deliver the number of
Securities which the Selling Stockholder is obligated to sell hereunder and the
Company does not exercise the right granted to it pursuant to the immediately
preceding sentence, then the International Managers may, at the option of the
Lead Managers, by notice from the International Managers to the Company, either
(a) terminate this Agreement without any liability on the fault of any non-
defaulting party except that the provisions of Sections 4, 6 and 7 shall remain
in full force and effect or (b) elect to purchase the Securities which the
Company has agreed to sell hereunder. No action taken pursuant to this Section
11 shall relieve any Selling Stockholder so defaulting from liability, if any,
in respect of such default.
In the event of a default by the Selling Stockholder as referred to in this
Section 11, each of the Lead Managers, and the Company shall have the right to
postpone Closing Time or Date of Delivery for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
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(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any non-
defaulting party; provided, however, that the provisions of Sections 4, 6 and 7
shall remain in full force and effect. No action taken pursuant to this Section
shall relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at World Financial
Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇ ▇▇▇▇▇, Vice
President with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Equity Capital Market,
Peterborough Court, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, telex: 940
12165, fax: ▇▇▇ ▇▇▇ ▇▇▇▇; and notices to the Company shall be directed to it at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary,
(▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 13. Parties. This Agreement and the International Terms Agreements
shall inure to the benefit of and be binding upon the Company, the Selling
Stockholder, the Lead Managers and, upon execution of the International Terms
Agreement, the other International Managers and their respective successors.
Nothing expressed or mentioned in this Agreement or the International Terms
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Selling Stockholder and
the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the International Terms Agreement or any provision
herein contained. This Agreement and the International Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of International Securities from any International
Manager shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE INTERNATIONAL
TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headlines. The Article and Section headings herein
and any table of contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Agreement, along with all counterparts, will become a binding agreement among
the International Managers, the Company and the Selling Stockholder in
accordance with its terms.
Very truly yours,
CROSS TIMBERS OIL COMPANY
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST
By:
----------------------------------------
As Attorney-in-Fact acting on behalf of
the Selling Stockholder
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
---------------------------
Authorized Signatory
For themselves and as the Lead Managers of the other U.S.
Underwriters named in the International Terms Agreement.
-34-
SCHEDULE A
Initial
International Managers International Securities
---------------------- ------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International................. 250,000
▇▇▇▇▇▇▇ Sachs International................. 250,000
Bear, ▇▇▇▇▇▇▇ International Limited......... 250,000
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International.. 250,000
▇▇▇▇▇▇ Brothers International (Europe)...... 250,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................ 250,000
-------
1,500,000
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SCHEDULE I
LIST OF SUBSIDIARIES
OF CROSS TIMBERS OIL COMPANY
Cross Timbers Operating Company (Texas)
Cross Timbers Energy Services, Inc. (Texas)
Cross Timbers Trading Company (Texas)
Ringwood Gathering Company (Delaware)
Timberland Gathering & Processing Company, Inc. (Texas)
WTW Properties, Inc. (Texas)
-36-
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. The Company was incorporated, exists and is in good standing under the
laws of the State of Delaware, with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement; the Company is qualified to do business and is in good
standing in the several states set forth on Exhibit A to such opinion; and we
have no knowledge that the nature of the properties of the Company or the
conduct of its business requires such qualification in other jurisdictions or
places, except in such jurisdictions or places in which the Company is subject
to no material liability or disability by reason of its failure to be so
qualified.
2. The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $.01 per share, and 25,000,000 shares of
preferred stock, par value $.01 per share; the issued and outstanding capital
stock of the Company is as set forth under the caption "Capitalization" in the
Prospectuses (except for subsequent issuances or purchases pursuant to employee
benefit plans or the exercise of convertible securities); and the Common Stock
conforms in all material respects as to legal matters to the description thereof
incorporated by reference into, and included under the caption "Description of
the Common Stock" in, the Registration Statement. The form of certificate used
to evidence the Common Stock is in proper form and complies with all applicable
statutory requirements.
3. All shares of the issued and outstanding Common Stock have been
authorized and validly issued and are fully paid and non-assessable.
4. The Common Stock to be sold by the Company has been authorized for
issuance and sale to the Underwriters pursuant to the Purchase Agreements and,
when issued and delivered by the Company pursuant to the Purchase Agreements
against payment therefor in accordance with the terms of the Purchase
Agreements, will be validly issued, fully paid and non-assessable; and the
issuance of such Common Stock is not subject to any preemptive or similar
rights, whether arising by operation of law, under the Restated Certificate of
Incorporation or Bylaws of the Company or, to our knowledge, any agreement or
other instrument to which the Company is a party or by which it may be bound.
5. Each subsidiary of the Company was incorporated, exists and is in good
standing under the laws of the State of Texas or Delaware, as applicable, with
corporate power and authority to own, lease and operate its properties and to
conduct
A-1
its business as described in the Registration Statement; each subsidiary of the
Company is qualified as a foreign corporation to transact business and is in
good standing in the jurisdictions set forth on Exhibit B to such opinion; we
have no knowledge that the nature of the properties of any subsidiary or the
conduct of their respective businesses requires such qualification in other
jurisdictions or places, except in such jurisdictions or places in which the
relevant subsidiary is subject to no material liability or disability by reason
of its failure to be so qualified; and all the issued and outstanding capital
stock of each subsidiary has been authorized and validly issued, is fully paid
and non-assessable and is owned of record by the Company, directly or through
subsidiaries, free of any adverse claim within the meaning of Article 8 of the
Uniform Commercial Code.
6. The Company has corporate power and authority to enter into the
Purchase Agreements and the Terms Agreements, and the Purchase Agreements and
the Terms Agreements have been authorized, executed and delivered by the
Company.
7. The Registration Statement has become effective under the Securities
Act, and we have no knowledge of the issuance of any stop order suspending the
effectiveness of the Registration Statement or any proceedings for such purpose
pending before, or contemplated by, the Commission.
8. At the time the Registration Statement became effective and at the
date hereof, the Registration Statement (other than the financial statements and
the supporting schedules included therein, as to which we express no opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the regulations thereunder.
9. We have no knowledge of any legal or governmental proceedings,
including ordinary routine litigation incidental to the Company's business,
pending or threatened, that are required to be disclosed in the Registration
Statement, other than those discussed therein or that, considered in the
aggregate, would be material.
10. The descriptions in the Prospectuses relating to the revolving credit
agreement and other material agreements or legal proceedings and, with respect
to the International Prospectus, under the caption "Certain United States
Federal Income Tax Consequences to Non-U.S. Holders," to the extent that they
constitute matters of law, summaries of legal matters, documents or proceedings,
or legal conclusions, have been reviewed by us and are correct in all material
respects.
11. We have no knowledge (a) of any contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits thereto,
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto or (b) that any default exits in the due
performance or observance by the Company of any material obligation, agreement,
covenant or condition contained in
A-2
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to, or filed or incorporated by reference.
12. No consent, approval, authorization or order of any court or
governmental agency or body is required in connection with the offering,
issuance or sale by the Company of the Common Stock to the Underwriters pursuant
to the Purchase Agreements, except such as have been obtained under the
Securities Act and such as may be required under state securities laws.
13. We have no knowledge that the execution, delivery and performance of
the Purchase Agreements and the consummation of the transactions contemplated
therein and compliance by the Company with its obligations thereunder will
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject, or that any such action will result in any
violation of the provisions of the Restated Certificate of Incorporation or
Bylaws of the Company, or any applicable law, administrative regulation or
administrative or court decree.
14. We have no knowledge that any persons have registration or other
similar rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act,
except (i) pursuant to the Registration Rights Agreement dated May 11, 1993
among the Company and certain of its stockholders (the "Registration Rights
Agreement") and (ii) if the warrants issued to Amoco Corporation are exercised,
pursuant to the Warrant Agreement dated September 30, 1997; the Company has
complied with all provisions of the Registration Rights Agreement with respect
to the Registration Statement and no stockholder has any right to require the
registration of any securities under the Securities Act pursuant to the
Registration Statement except for the Common Stock being sold to the
Underwriters by the Selling Stockholder.
15. Each document filed pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") (other than the financial statements and the financial
statement schedules included therein, as to which we express no opinion) and
incorporated or deemed to be incorporated by reference in the Prospectuses
complied when so filed as to form in all material respects with the Exchange Act
and the regulations thereunder.
16. A Custody Agreement has been executed and delivered by the Selling
Stockholder and the Custodians, and the Custody Agreement constitutes a legal,
valid and binding agreement of the Custodians and the Selling Stockholder
enforceable in accordance with its terms; the Purchase Agreements have been
executed and
A-3
delivered by ▇. ▇▇▇▇▇▇▇ Seeds and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as attorneys-in-fact
for, and on behalf of, the Selling Stockholder and constitute legal, valid
and binding agreements of the Selling Stockholder enforceable in accordance
with their terms, except as rights to indemnification and contribution
under the Purchase Agreements may be limited by applicable laws.
17. We have no knowledge of any consent, approval, authorization
or order of any court or governmental agency or body that is required for
the consummation of the transactions contemplated by the Purchase
Agreements in connection with the Common Stock to be sold by the Selling
Stockholder pursuant to the Purchase Agreements, except such as have been
obtained under the Securities Act and such as may be required under state
securities laws.
18. Immediately prior to the date hereof, the Selling Stockholder
was the record owner of the Common Stock to be sold on the date hereof by
the Selling Stockholder under the Purchase Agreements, and upon payment by
the Underwriters for such Common Stock in accordance with the Purchase
Agreements, the Underwriters will own such Common Stock free of any adverse
claim within the meaning of Article 8 of the Uniform Commercial Code.
Although we are not passing on, and do not assume any responsibility for,
the accuracy or completeness of the statements in the Registration Statement and
Prospectuses (except with respect to paragraphs 2, 8, 10 and 15 above), we
advise you that on the basis of our participation in conferences with the
officers and employees of the Company, and representatives of, and counsel for,
the Underwriters at which the contents of the Registration Statement were
discussed, no facts have come to our attention that lead us to believe that the
Registration Statement (including information deemed to be part of the
Registration Statement pursuant to Rule 434, but excluding financial statements,
the notes thereto and the related schedules and other financial data included
therein or incorporated by reference therein and information relating to
estimated natural resource reserves, the estimated future net revenues therefrom
and the discounted present value of such estimated future net revenues included
therein or incorporated by reference therein, as to which we have not been asked
to comment), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectuses (other than the financial statements, the notes thereto and the
related schedules and other financial data included therein or incorporated by
reference therein and information relating to estimated natural resource
reserves, the estimated future net revenues therefrom and the discounted present
value of such estimated future net revenues included therein or incorporated by
reference therein, as to which we have not been asked to comment), as of its
date or the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
A-4
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that (i) it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991) or (ii) with respect to any
opinions expressed to the knowledge of such counsel, such knowledge is
restricted to matters known by a limited number of attorneys of such counsel.
A-5
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) A Custody Agreement has been duly executed and delivered
by the Selling Stockholder and such Custody Agreement constitutes a valid
and binding agreement of the Selling Stockholder enforceable in accordance
with its terms; and the execution and delivery of this Agreement has been
duly authorized by the Selling Stockholder and, when executed and delivered
by the Custodian as attorney-in-fact for, and on behalf of, the Selling
Stockholder, will constitute a valid and binding agreement of the Selling
Stockholder enforceable in accordance with its terms (such counsel may
except from the opinion in this clause the application of bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally and may limit such opinion with respect to the availability of
equitable remedies and the enforceability of provisions providing for
indemnification for violations of federal securities laws);
(ii) The sale of the Securities to be sold by the Selling
Stockholder hereunder, the compliance by the Selling Stockholder with all
of the provisions of this Agreement and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any terms or provisions
of, or constitute a default under, any statute, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known to
such counsel to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound, or to which any of the property or assets of
the Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the certificate or articles of incorporation
or by-laws of the Selling Stockholder, if such Selling Stockholder is a
corporation, the agreement of partnership of such Selling Stockholder, if
such Selling Stockholder is a partnership, or the agreement or declaration
of trust of such Selling Stockholder, if such Selling Stockholder is a
trust, or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Securities to be sold by the Selling Stockholder hereunder, except such as
have been obtained under the 1933 Act and such as may be required under
state securities laws in connection with the purchase and distribution of
such Securities by the Underwriters;
B-1
(iv) Immediately prior to Closing Time, the Selling
Stockholder had good and valid title to the Securities to be sold at
Closing Time by such Selling Stockholder under this Agreement, free and
clear of all liens, encumbrances, equities or claims, and full right, power
and authority to sell, assign, transfer and deliver the Securities to be
sold by the Selling Stockholder hereunder; and
(v) Good and valid title to such Securities, free and clear
of all liens, encumbrances, equities or claims, has been transferred to
each of the several Underwriters who have purchased such Securities in good
faith and without notice of any such lien, encumbrance, equity or claim or
any other adverse claim within the meaning of the Uniform Commercial Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States and in
rendering the opinion in subparagraph (iv) such counsel may rely upon a
certificate of the Selling Stockholder in respect of matters of fact as to
ownership of and liens, encumbrances, equities or claims on the Securities
to be sold by such Selling Stockholder, provided that such counsel shall
state that they believe that both you and they are justified in relying
upon such certificate.
B-2