EXHIBIT 1.1
CROSS TIMBERS OIL COMPANY
(a Delaware corporation)
6,000,000 Shares
of
Common Stock
(Par value $0.01 per share)
UNDERWRITING AGREEMENT
November 17, 2000
▇▇▇▇▇▇ BROTHERS INC.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Cross Timbers Oil Company, a Delaware corporation (the "Company"), proposes
to issue and sell 6,000,000 shares (the "Firm Shares") of common stock, par
value $0.01 per share (the "Common Stock"), of the Company. In addition, the
Company proposes to grant to the Underwriter an option to purchase up to an
aggregate of 600,000 additional shares (the "Option Shares") of Common Stock.
The 6,000,000 Firm Shares and the 600,000 Option Shares are hereinafter
collectively call the "Securities."
The Company shall offer the Securities through ▇▇▇▇▇▇ Brothers Inc. (the
"Underwriter") pursuant to Section 2 hereof.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as it deems advisable after this Agreement
has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-46909) and pre-
effective Amendment No. 1 thereto for the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such post-effective amendments thereto as may be
required prior to the execution of this Agreement. Such registration statement
(as so amended, if applicable) has been declared effective by the Commission and
contains a form of prospectus (the "Base Prospectus"). Promptly after execution
and delivery of this Agreement, the Company will prepare and file a prospectus
supplement in accordance with paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations. The Base Prospectus and each such supplement thereto are
herein collectively called the "Prospectus." The information included in any
such prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective or included in a prospectus supplement filed in
respect of such registration statement pursuant to Rule 424(b) is referred to as
"Rule 424(b) Information." Such registration statement (as so amended, if
applicable), including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule
424(b) Information is herein called the "Registration Statement." For purposes
of this Agreement, all references to the Registration Statement, the Prospectus,
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus(or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement, or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Registration Statement or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to the Underwriter, as of the date hereof, and, as of the Closing
Time referred to in Section 2(b) hereof, and agrees with the Underwriter, as
follows:
(1) Compliance with Registration Requirements. The Company meets the
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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
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Form 10-K with the Commission (the "Annual Report on Form 10-K")) became
effective and at the Closing Time, the Registration Statement and any amendments
and supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the Prospectus
or any amendments or supplements thereto were issued and at the Closing Time,
included or will include an untrue statement of a material fact or omitted or
will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished in writing by the Underwriter expressly for use in
the Registration Statement or the Prospectus.
Each prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under
the 1933 Act, complied when so filed in all material respects with the 1933 Act
Regulations, and the Prospectus delivered to the Underwriter for use in
connection with the offering of the Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed to be
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incorporated by reference in the Registration Statement and Prospectus, when
they became effective or at the time they were or hereafter are filed with the
Commission, included the most recent Annual Report of the Company on Form 10-K
filed with the Commission, the Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2000, June 30, 2000 and September 30, 2000 filed with
the Commission, and each Current Report of the Company on Form 8-K filed with
the Commission since the end of the fiscal year to which such Annual Report
relates. The documents incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectus, when they became effective or
at the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the dates of the Prospectus, and at the Closing Time did not and
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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(3) Independent Accountants. The accountants who certified the financial
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statements and supporting schedules included in the Registration Statement and
the Prospectus are independent certified public accountants with respect to the
Company and its Subsidiaries within the meaning of Regulation S-X under the 1933
Act.
(4) Financial Statements. The financial statements of the Company included
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or incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included therein, present
fairly in all material respects the financial position of the Company and its
consolidated Subsidiaries at the dates indicated and the statement of
operations, stockholders= equity and cash flows of the Company and its
consolidated Subsidiaries for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included or incorporated by reference in the
Registration Statement and Prospectus present fairly in all material respects in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included or incorporated by
reference in the Registration Statement and the Prospectus present fairly in all
material respects the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus. In
addition, any pro forma financial statements of the Company and its Subsidiaries
and the related notes thereto included or incorporated by reference in the
Registration Statement and the Prospectus present fairly in all material
respects the information shown therein, have been prepared in accordance with
the Commission=s rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(5) No Material Adverse Change in Business. Since the respective dates as
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of which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries considered as
one enterprise (a "Material Adverse Effect"), whether or not arising in the
ordinary course of business, (B) there have been no transactions entered into by
the Company or any of its Subsidiaries, other than those arising in the ordinary
course of business, which are material with respect to the Company and its
Subsidiaries considered as one enterprise and (C) except for regular quarterly
dividends on the Common Stock and on the Series A Convertible Preferred Stock,
par value $0.01 per share, of the Company, in amounts per share that are
consistent with past practice,
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respectively, including the increased dividend declared September 30, 2000,
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
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is validly existing as a corporation in good standing under the laws of the
state of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not result in a Material
Adverse Effect.
(7) Authorization of Agreements. This Agreement has been duly authorized,
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executed and delivered by the Company.
(8) Authorization of Common Stock. The Securities being sold to the
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Underwriter pursuant to this Agreement have been duly authorized by the Company
for issuance and sale to the Underwriter pursuant to this Agreement. The
Securities, when issued and delivered by the Company pursuant to this Agreement,
against payment of the consideration therefore specified in this Agreement, will
be validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights arising by operation of law, under the
charter and bylaws of the Company or under any agreement to which the Company or
any of its Subsidiaries is a party, or otherwise. No holder of the Securities
will be subject to personal liability by reason of being such a holder.
(9) Absence of Defaults and Conflicts. Neither the Company nor any of its
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Subsidiaries is in violation of its charter or bylaws 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, AAgreements and Instruments@), except for such defaults
as would not result in a Material Adverse Effect. The execution, delivery and
performance of this Agreement and any other agreement or instrument entered into
or issued or to be entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration Statement and
the Prospectus and the consummation of the transactions contemplated herein and
in the Prospectus (including the issuance and sale of the Securities and the use
of the proceeds from the sale of the Securities as described
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under the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its Subsidiaries pursuant to, any Agreements
and Instruments, except for such conflicts, breaches, defaults, events or liens,
charges or encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their assets
or properties, which violation would result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of the charter or
bylaws of the Company or any of its Subsidiaries. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any Subsidiary.
(10) Violation of Law. Neither the Company nor any Subsidiary is in
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violation of any law, ordinance, governmental rule or regulation or court decree
to which it is subject, which violation could reasonably be expected to result
in a Material Adverse Effect.
(11) Accuracy of Exhibits. There are no contracts or documents which are
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required to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits thereto
which have not been so described and/or filed as required.
(12) No Stabilization. Neither the Company nor any of its officers,
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directors or controlling persons has taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.
(13) Investment Company Act; Public Utility Holding Company Act. The
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Company is not, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus will not be (A) an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder or (B) a "holding company" or
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"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.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any Subsidiary and delivered to the Underwriter in connection with
the offering of the Securities shall be deemed a representation and warranty by
the Company to the Underwriter as to the matters covered thereby on the date of
such certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
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(a) Firm Securities. Subject to the terms and conditions set forth herein,
the Company agrees to sell to the Underwriter, and the Underwriter agrees to
purchase, the Securities at a price of $19.125 per share. The Underwriter
proposes to offer the Securities for sale upon the terms and conditions set
forth in the Prospectus.
(b) Option Securities. In addition, subject to the terms and conditions
set forth herein, the Company grants an option to the Underwriter to purchase up
to 600,000 shares of Common Stock at a price per Option Share equal to the price
per Firm Share. Such option will expire 30 days after the date of this
Agreement.
(c) Payment. Payment of the purchase price for, and delivery of, the
Securities shall be made at the office of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be
agreed upon by the Underwriter and the Company, at 10:00 A.M. (Eastern time) on
the third business day after the date of this Agreement (such time and date of
payment and delivery being herein called AClosing Time@).
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Underwriter for the account of the Underwriter of the Securities to be
purchased by it.
(d) Denominations; Registration. The Securities and certificates therefor
shall be in such denominations and registered in such names as the Underwriter
may request in writing prior to the Closing Time. The Securities and
certificates therefor will be made available for examination and packaging by
the Underwriter in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day of the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the
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Underwriter, as follows:
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(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 415
and Rule 424, if and as applicable, of the 1933 Act Regulations and will notify
the Underwriter immediately, and confirm the notice in writing, of (i) the
effectiveness of any post-effective amendment to the Registration Statement or
the filing of any supplement or amendment to the Prospectus, (ii) the receipt of
any comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424 and will take such steps as it deems
necessary to ascertain promptly whether the Prospectus transmitted for filing
under Rule 424 was received for filing by the Commission and, in the event that
it was not, it will promptly file the Prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter notice of
its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations) or any
amendment, supplement or revision to the Prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriter with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Underwriter or its counsel shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Underwriter and counsel for the Underwriter, without charge, (i)
conformed 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) conformed copies of all consents and certificates of experts. The
Registration Statement and any amendments or supplements thereto furnished to
the Underwriter are 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 the Underwriter,
without charge, as many copies of the Prospectus the Underwriter reasonably
requested, and the Company
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hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to the Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus and any amendment or
supplement thereto as the Underwriter may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement, the Registration Statement and the
Prospectus. If at any time when a Prospectus is required by the 1933 Act or the
1934 Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriter or for the Company, to amend the
Registration Statement in order that the Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or to amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriter, without
charge, such number of copies of such amendment or supplement as the Underwriter
may reasonably request.
(f) Earnings Statement. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
AUse of Proceeds@.
(h) Listing. To the extent not previously listed, the Company will use its
best efforts to effect the listing of the Securities, prior to the Closing Time,
on the New York Stock Exchange.
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(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) Lock-up Letters. For a period of 90 days from the date of the
Prospectus, the Company agrees not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than Common
Stock issued pursuant to employee benefit plans, stock option plans or other
employee compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options, rights or
warrants with respect to any Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, in each case
without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause ▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to furnish to the Underwriter, prior to the Closing
Time, a letter or letters, substantially in the form of Exhibit A hereto,
pursuant to which each such person shall agree not to, directly or indirectly,
(1) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any Common Stock or
securities convertible into or exchangeable for Common Stock (other than the
sale of Common Stock pursuant to an arrangement with a broker-dealer that
provides the equivalent of a cashless exercise of options) or (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case for a period of 30 days from the date of the Prospectus, without
the prior written consent of ▇▇▇▇▇▇ Brothers Inc.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
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expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the printing and delivery to the Underwriter of this
Agreement, and such other documents as may be required in connection with the
purchase, sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the Securities and certificates for the Securities to
the Underwriter, including any transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents
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(including transfer agents and registrars) (v) the printing and delivery to the
Underwriter of copies of the Prospectus and any amendments or supplements
thereto and (vi) the fees and expenses incurred in connection with the listing
of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 hereof, the Company
shall reimburse the Underwriter for all of its reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligation of
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the Underwriter to purchase and pay for the Securities pursuant to this
Agreement is subject to the accuracy of the representations and warranties of
the Company herein or in certificates of any officer of the Company or any of
its Subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further condition:
(a) Effectiveness of Registration Statement. The Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been initiated or be
pending or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriter. A prospectus containing
information relating to the description of the Securities, the specific method
of distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable.
(b) Officers Certificate. At Closing Time, the Underwriter shall have
received a certificate of the Company, executed by the President or a Vice
President of the Company and the chief financial officer or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(ii) the Company has complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time, and (iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or, to the Company=s knowledge, threatened by the Commission.
(c) Approval of Listing. At Closing Time, the Securities shall have been
listed, or approved for listing subject only to official notice of issuance, on
the New York Stock Exchange.
(d) Opinion of Counsel. At Closing Time, the Underwriter shall have
received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, P.C., counsel for the
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Company, in form and substance satisfactory to counsel for the Underwriter to
the effect set forth in Exhibit B hereto.
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(e) Accountant's Comfort Letter. At Closing Time, the Underwriter shall
have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing Time, in
form and substance satisfactory to the Underwriter, containing the 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 Prospectus, including the
documents incorporated by reference therein.
(f) Force Majeure. Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Securities being delivered on such Closing Time on
the terms and in the manner contemplated in the Prospectus.
(g) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Company at any
time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification and Contribution.
--------------------------------
(a) The Company shall indemnify and hold harmless the Underwriter, its
officers and employees and each person, if any, who controls the Underwriter
within the meaning of the 1933 Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which the Underwriter, officer,
employee or controlling
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person may become subject, under the 1933 Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or in
any Blue Sky application or filing any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by the Underwriter in
connection with, or relating in any manner to, the Securities or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by the Underwriter through its negligence or
willful misconduct), and shall reimburse the Underwriter and each such officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by the Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
the Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning the Underwriter furnished to the
Company by the Underwriter by or specifically for inclusion therein which
information consists solely of the information specified in Section 6(e);
provided further, that such indemnification shall not apply if a copy of the
Prospectus as then amended or supplemented were not sent or given by or on
behalf of an Underwriter to the claimant, if required by law, at or prior to the
written confirmation of the sale of Securities to such claimant or if the
Prospectus as so amended or supplemented would have cured the defect giving rise
to such claim, unless the failure to so deliver a Prospectus resulted from the
Company's failure to comply with Section 3(d). The foregoing indemnity agreement
is in addition to any liability which the Company may otherwise have to the
Underwriter or to any officer, employee or controlling person of the
Underwriter.
(b) The Underwriter shall indemnify and hold harmless the Company, its
officers and employees, each of its directors, and each person, if any, who
controls the Company within the meaning of the 1933 Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
(A) in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any Blue Sky application or filing or (ii) the
omission or alleged
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omission to state in the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky application or filing any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning the
Underwriter furnished to the Company by the Underwriter specifically for
inclusion therein, which information consists solely of the information
specified in Section 6(e), and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Underwriter shall have the right to employ counsel to represent jointly the
Underwriter and its officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriter against the Company under this Section 6 if, in the
reasonable judgment of the Underwriter, it is advisable for the Underwriter, and
its officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of one such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
-14-
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriter on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriter on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting
compensation received by the Underwriter with respect to the Securities
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Securities under this Agreement, in each case
as set forth in the "Underwriting" section of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriter, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriter agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 6(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
offered to the public exceeds the amount of any damages which the
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Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges that the
statements with respect to the public offering of the Securities by the
Underwriter set forth under the caption "Underwriting" in the Prospectus are
correct and constitute the only information concerning the Underwriter furnished
in writing to the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement and the Prospectus.
SECTION 7. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
---------
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriter or any controlling person, or by or on behalf of the Company,
and shall survive delivery of and payment for the Securities.
SECTION 8. Notices. All statements, requests, notices and agreements
-------
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, telex or
facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center,
New York, New York 10285, Attention: Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇),
with a copy, in the case of any notice pursuant to Section 6(c), to the Director
of Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
SECTION 9. Parties. This Agreement shall inure to the benefit of and
-------
be binding upon the Underwriter, the Company, and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (A) the representations, warranties, indemnities
and agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control the
Underwriter within the meaning of Section 15 of the 1933 Act and any officer or
employee entitled to indemnification under Section 6(a) and (B) the indemnity
agreement of the Underwriter contained in Section 6(b) of this
-16-
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the 1933 Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 9, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
SECTION 10. Definition of the Terms "Business Day" and Subsidiary". For
------------------------------------------------------
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "Subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 11. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of New York. Each party irrevocably
agrees that any legal suit, action or proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby may be instituted in the
federal courts of the United States of America located in the City of New York
or the courts of the State of New York in each case located in the Borough of
Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the jurisdiction of such courts in any such suit, action
or proceeding. The parties further agree that service of any process, summons,
notice or document by mail to such party=s address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 12. Counterparts. This Agreement may be executed in one or more
------------
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 13. Headings. The headings herein are inserted for convenience
--------
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company and
the Underwriter, please indicate your acceptance in the space provided for that
purpose below.
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Very truly yours,
CROSS TIMBERS OIL COMPANY
By:
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
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Accepted:
▇▇▇▇▇▇ Brothers Inc.
By
-------------------------
Authorized Representative
-19-
Exhibit A
LOCK-UP LETTER AGREEMENT
Cross Timbers Oil Company
-------------------------
Public Offering of Common Stock
-------------------------------
▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") providing for the purchase by you (the
"Underwriter") of shares (the "Securities") of common stock, par value $0.01 per
share (the "Common Stock"), of Cross Timbers Oil Company, a Delaware corporation
(the "Company"), and that the Underwriter proposes to reoffer the Common Stock
to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriter, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Common Stock (including, without
limitation, Common Stock that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission and Common Stock that may be issued upon exercise of any
option or warrant (other than the sale of Common Stock pursuant to an agreement
with a broker-dealer that provides the equivalent of a cashless exercise of
options)) or securities convertible into or exchangeable for Common Stock owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock, or other securities, in cash or otherwise, for a
period of 30 days after the date of the final Prospectus relating to the
Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
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It is understood that, if the Company notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Securities, we will be released from our obligations under
this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
Very truly yours,
By:
------------------------
Name:
Title:
Dated: November 17, 2000
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EXHIBIT B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
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; there are 70,482,301 shares of Common
Stock issued and outstanding; 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 Underwriter pursuant to the Underwriting Agreement and,
when issued and delivered by the Company pursuant to the Underwriting Agreement
against payment therefor in accordance with the terms of the Underwriting
Agreement, 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. The Company has corporate power and authority to enter into the
Underwriting Agreement, and the Underwriting Agreement has been authorized,
executed and delivered by the Company.
6. The Registration Statement has become effective under the 1933 Act, and
we
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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.
7. 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 1933
Act and the regulations thereunder.
8. 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 or incorporated by reference therein or
that, considered in the aggregate, would be material.
9. 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 any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred to, or filed
or incorporated by reference.
10. 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 Underwriting Agreement, except such as have been obtained under the 1933
Act and such as may be required under state securities laws.
11. We have no knowledge that the execution, delivery and performance of
the Underwriting Agreement 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
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decree.
12. Each document filed pursuant to the 1934 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 Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the regulations thereunder.
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
Prospectus, 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 Prospectus (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.
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.
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