PLACEMENT AGENT AGREEMENT
Dated as of: October 14, 1997
X. Xxxxxxx Securities, LLC
1345 Avenue of the Xxxxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Dear Sirs:
The undersigned, Fortune Natural Resources Corporation (the "Company"), hereby
agrees with X. Xxxxxxx Securities, LLC ("Xxxxxxx" or the "Placement Agent") as
follows:
1. Placement.
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A. The Company, a Delaware corporation, is an independent oil and
natural gas company engaged primarily in exploration for and development of
domestic oil and natural gas.
B. The Company hereby engages Xxxxxxx to act as its exclusive placement
agent in connection with the sale by the Company (the "Placement") of up to $3.5
million in aggregate principal amount of convertible subordinated notes (the
"Notes"). The Notes will (i) bear annual interest at the rate of 12%, payable
quarterly; (ii) mature on December 31, 2007; (iii) be convertible into the
Company's common stock (the "Underlying Shares"); and (iv) be subordinated to
"Senior Indebtedness," all as described in the form of Note attached as Exhibit
B to the Subscription Agreement and Investment Letter (the "Subscription
Agreement") which constitutes part of the "Offering Materials" referred to in
PARAGRAPH 3 (C) below. The anticipated use of the Placement proceeds will be as
set forth in the Schedule of Use of Proceeds attached as Exhibit K to the
Subscription Agreement.
2. Offering.
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A. The Notes will be offered on a "$1.25 million aggregate principal
amount minimum or none to $3.5 million aggregate principal amount maximum best
efforts basis " for the "Offering Period" as defined below. They will be issued
in denominations of $10,000 or integral multiples thereof in such principal
amounts as shall be determined by the Company.
B. The closing date will occur approximately seven business days (the
"Closing Date") following the acceptance by the Company of subscriptions for a
sufficient aggregate principal amount of Notes offered hereby (as determined
jointly by the Company and Xxxxxxx) but in no event less than five business days
or as soon thereafter as funds have cleared the banking system in the normal
course of business and, in any event, will occur on or before October 31, 1997
unless extended by the mutual consent of the Company and the Placement Agent to
no later than December 1, 1997 (such date is hereinafter referred to as the
"Termination Date"; the period commencing on the date hereof and ending on the
Termination Date is sometimes referred to herein as the "Offering Period").
There may be more than one Closing Date in the event that less than $3.5 million
aggregate principal amount of Notes has been sold and paid for on the first
Closing Date.
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C. The Notes will be offered by the Company through the Placement
Agent, by means of the "Offering Materials" which shall include such documents
as appropriately describe the Company's business and prospects. A list of the
Offering Materials is attached hereto as EXHIBIT I. Payment for the Notes shall
be made by check or wire transfer as more fully described in the Subscription
Agreement. The Placement will be effected pursuant to the exemption from the
registration provisions of the Securities Act of 1933 (the "Securities Act")
provided by Section 4 (2) thereof and Rule 506 of Regulation D promulgated
thereunder by the Securities and Exchange Commission (the "Commission"). The
Notes will be sold only to "Accredited Investors" within the meaning of Rule 501
(a) of Regulation D ("Accredited Investors").
D. All funds received from subscriptions will be promptly transmitted
pursuant to the terms of an escrow agreement, to a special bank escrow account
at The Chase Manhattan Bank (the "Escrow Agent"). In the event that less than
$1.25 million in aggregate principal amount of Notes are subscribed for during
the Offering Period, all funds will be returned promptly after the Termination
Date in full to subscribers without deduction therefrom or interest thereon. In
the event that $1.25 million or more in aggregate principal amount of Notes are
subscribed for during the Offering Period, the funds therefrom, net of (i) 10%
commissions and 3% expense allowance (the "Expense Allowance") due Xxxxxxx (less
$25,000 to be paid to Xxxxxxx or for its account upon the execution of this
Agreement pursuant to the terms of Section 7 below, and (ii) bank escrow fees,
will be forwarded to the Company, against delivery of the Notes as soon as the
funds received from such subscriptions have cleared the banking system in the
normal course of business. In addition, Xxxxxxx will be granted warrants (the
"Placement Agent's Warrants"), exercisable over a five year period commencing
upon the last Closing Date, to purchase a number of shares of the Common Stock
equal to 10% of the aggregate gross proceeds of the Offering received by the
Company divided by 3.6. The warrant exercise price will be $3.60 per share
adjusted in accordance with anti dilution provisions which shall be the same as
those set forth in the Note.
E. The Company is required to obtain the permission of its primary
lender, Credit Lyonnais New York Branch (the "Bank"), in order to effect the
Placement. Accordingly, no funds will be released from the escrow account to the
Company unless the Bank's permission is obtained or unless the Company
determines to repay the Bank with the Placement proceeds.
F. The Placement Agent shall not be obligated to sell any of the Notes
and shall only be obligated to offer the Notes on a "best efforts" basis.
G. The Company reserves the right to reject any subscriber, in whole or
in part, in its sole discretion. Notwithstanding anything to the contrary
contained in this PARAGRAPH G, the Company's right to reject a subscriber shall
lapse five business days after receipt by the Company of the fully completed and
duly executed subscription documents from the Placement Agent with respect to
such subscriber, unless the Company shall notify the Placement Agent of its
election to reject such subscriber prior thereto.
3. Further Agreements of the Company.
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The Company shall at its sole cost and expense do as follows:
(i) Prior to the earlier of the last Closing Date or
the Termination Date, as soon as the Company is either
informed or becomes aware thereof, advise the Placement Agent
of any material adverse change in the Company's results of
operations, condition (financial or otherwise) or business or
of any development materially affecting the Company; or
rendering untrue or misleading any material statement in the
Offering Materials occurring at any time prior to the
completion or termination of the Placement and upon the
request of the Placement Agent shall confirm the same in
writing.
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(ii) Cause the Notes to be qualified or registered
for sale, or to obtain exemptions from such qualification or
registration requirements, on terms consistent with those
stated in the Offering Materials under the securities laws of
such jurisdictions as the Placement Agent shall request;
provided, however, that such states and jurisdictions do not
require the Company to qualify as a foreign corporation or to
file a general consent to service of process. Qualification,
registration and exemption charges and fees as well as all
legal fees and expenses related thereto shall be at the sole
cost and expense of the Company.
(iii) Provide and to continue to provide to each Note
holder, until his Note has been repaid and/or converted,
copies of all quarterly and annual consolidated financial
statements and reports prepared by or on behalf of the
Company, for public disclosure and copies of all documents
delivered to all of the Company's stockholders.
(iv) Deliver, until all of the Notes have been repaid
and/or converted, to the Placement Agent, in the manner
provided in PARAGRAPH 10 (C) of this Agreement: (A) within 55
days after the end of each of the first three quarters of each
fiscal year of the Company or as soon thereafter as is
reasonably practicable, commencing with the first quarter
ending after the Termination Date, the Form 10-Q filed by the
Company with the Commission for each such quarterly period;
(B) within 100 days after the close of each fiscal year, the
Form 10-K filed by the Company with the Commission for such
fiscal year; and (C) a copy of all documents, reports and
information furnished to its respective stockholders generally
at the time such documents, reports and information are
furnished to such stockholders.
4. Representations, Warranties and Covenants of the Placement Agent.
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The Placement Agent represents, warrants and covenants as follows:
(i) The Placement Agent has the necessary corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(ii) The Placement Agent is a limited liability
company duly organized and validly existing under the laws of
the State of New York; the execution and delivery by the
Placement Agent of this Agreement and the consummation of the
transactions herein contemplated will not result in any
violation of, or be in conflict with, or constitute a default
under, any agreement or instrument to which the Placement
Agent is a party or by which the Placement Agent or its
properties are bound, or any judgment, decree, order or, to
the Placement Agent's knowledge, any statute, rule or
regulation applicable to the Placement Agent. This Agreement,
when executed and delivered by the Placement Agent, will
constitute the legal, valid and binding obligation of the
Placement Agent, enforceable in accordance with its terms,
except to the extent that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws from time to time in effect and affecting the
rights of creditors generally, (b) the enforceability hereof
is subject to general principles of equity, or (c) the
indemnification provisions hereof may be held to be violative
of public policy.
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(iii) The Placement Agent will deliver to each
purchaser, prior to any submission by such person of a written
offer to purchase any Notes, a copy of the Offering Materials,
as it may have been most recently amended or supplemented by
the Company.
(iv) Upon receipt of an executed Subscription
Agreement and the payments representing subscriptions for such
Notes, the Placement Agent will promptly forward copies of the
subscription documents to the Company and shall forward all
consideration received for such Notes to the Escrow Agent to
be held in escrow.
(v) The Placement Agent will not deliver the Offering
Materials to any person it does not reasonably believe to be
an Accredited Investor.
(vi) The Placement Agent will not intentionally take
any action which it reasonably believes would cause the
Placement to violate the provisions of the Securities Act or
the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx").
(vii) The Placement Agent shall use all reasonable
efforts to determine (a) whether any prospective purchaser is
an Accredited Investor and (b) that any information furnished
by a prospective investor is true and accurate. The Placement
Agent shall have no obligation to insure that (1) any check,
note, draft or other means of payment for the Notes will be
honored, paid or enforceable against the subscriber in
accordance with its terms, or (2) subject to the performance
of the Placement Agent's obligations and the accuracy of the
Placement Agent's representations and warranties hereunder,
(A) that the Placement is exempt from the registration
requirements of the Securities Act or any applicable state
"Blue Sky" law or (B) any prospective purchaser is an
Accredited Investor.
(viii) The Placement Agent is a member of the
National Association of Securities Dealers, Inc. and is a
broker-dealer registered as such under the Exchange Act and
under the securities laws of the States in which the
securities will be offered by the Placement Agent, unless an
exemption for such state registration is available to the
Placement Agent.
5. Representations, Warranties and Covenants of the Company.
--------------------------------------------------------
The Company represents, warrants and covenants as follows:
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(i) Each of this Agreement and Subscription
Agreement have been duly and validly authorized by the Company
and are, or with respect to the Subscription Agreements will
be, valid and binding agreements of the Company, enforceable
in accordance with their respective terms, except to the
extent that (a) the enforceability hereof and thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws from time to time in effect and affecting the
rights of creditors generally and (b) the enforceability
hereof or thereof is subject to general principles of equity.
The Notes, Underlying Shares and Placement Agent's Warrants
will be duly authorized and, when issued and paid for in
accordance with the Offering Materials, this Agreement, and
Subscription Agreements, will be (or in the case of the
Underlying Shares, issuable upon conversion of the Notes
and/or exercise of the Placement Agent's Warrants in
accordance with the terms thereof will be), validly issued,
fully paid and non assessable; the holders thereof are not and
will not be subject to personal liability solely by reason of
being such holders; the Underlying Shares, will not be subject
to the preemptive rights of any stockholder of the Company;
and all corporate action required to be taken for the
authorization, issuance of the Notes and the Placement Agent's
Warrants and the sale of the Notes, has been (or with respect
to the Underlying Shares, will be) duly and validly taken by
the Company. The Notes and Placement Agent's Warrants
constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, (except
to the extent that the enforceability thereof (1) may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws from time to time in effect and affecting the
rights of creditors generally and (2) is subject to general
principles of equity) to issue and sell, upon exercise
thereof, in accordance with their terms, the number and type
of the Company's securities called for thereby.
(ii) As of September 30, 1997, the authorized capital
stock of the Company consists of 40 million shares of common
stock (the "Common Stock"), $0.01 per share par value, of
which 12,199,163 shares are issued and outstanding, and 2
million shares of preferred stock, $1.00 per share par value,
none of which are outstanding. Additionally, 7,410,224 shares
of Common Stock are reserved for issuance upon exercise of
options and warrants held by current and former employees and
management of the Company and others, and approximately
162,681 shares of Common Stock are reserved for issuance upon
conversion of currently outstanding debentures. All issued and
outstanding shares of Common Stock have been duly authorized
and such shares are validly issued, are fully paid and
non-assessable and the holders thereof have no preemptive
rights, no rights of rescission with respect thereto and are
not subject to personal liability solely by reason of being
such holders. No shares of Common Stock were issued in
violation of the preemptive rights of any holders of any
capital stock of the Company.
(iii) The Company has good and marketable title to,
or valid and enforceable leasehold estates in, all items of
real and personal property stated in the Offering Materials to
be owned or leased by it, free and clear of all liens,
encumbrances, claims, security interests and defects of any
material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and
payable. The Company has no subsidiaries.
(iv) There is no material litigation or governmental
proceeding pending or, to the best of the Company's knowledge,
threatened against, or involving the properties or business of
the Company other than as set forth in the Offering Materials.
(v) The financial statements of the Company included
in the Offering Materials fairly present the financial
position and the results of operations of the Company at the
dates and for the periods to which they apply; and such
financial statements have been prepared in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved.
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(vi) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Except as set forth
above or in the Offering Materials, the Company does not own
an interest in any corporation, partnership, trust, joint
venture or other business entity. The Company is duly
qualified or licensed and in good standing as a foreign
corporation in each jurisdiction in which its ownership or
leasing of any properties or the character of its operations
requires such qualification or licensing and where failure to
so qualify would have a material adverse effect on the
Company. The Company has all requisite corporate power and
authority, and all material and necessary authorizations,
approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies to own
or lease its properties and conduct its businesses as
described in the Offering Materials, and the Company is doing
business in material compliance with all such authorizations,
approvals, orders, licenses, certificates and permits and all
federal, state, local and foreign laws, rules and regulations
concerning the business in which it is engaged. Any
disclosures in the Offering Materials concerning the effects
of federal, state, local and foreign regulation on the
Company's business as currently conducted and as contemplated
are correct in all material respects and do not omit to state
a material fact. The Company has all corporate power and
authority to enter into this Agreement and the Subscription
Agreements and to carry out the provisions and conditions
hereof and thereof, and all consents, authorizations,
approvals and orders required in connection herewith and
therewith have been obtained or will have been obtained prior
to the Closing Date. No consent, authorization or order of,
and no filing with, any court, government agency or other body
is required by the Company for the issuance of the Notes,
Underlying Shares or the Placement Agent's Warrants except
with respect to applicable federal and state securities laws.
(vii) There has been no material adverse change in
the condition or prospects for commercialization of the
Company, financial or otherwise, from the latest dates as of
which such condition or prospects, respectively, are set forth
in the Offering Materials, and the outstanding debt, the
property and the business of the Company, each conform in all
material respects to the descriptions thereof contained in the
Offering Materials.
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(viii) The Company is not in violation of any
provision of its incorporating documents or By-Laws. Neither
the execution and delivery of this Agreement, nor the
Subscription Agreements nor the issue and sale or delivery of
the Notes, Underlying Shares or the Placement Agent's Warrants
nor the consummation of any of the transactions contemplated
herein, or in the Subscription Agreements, nor the compliance
by the Company with the terms and provisions hereof or
thereof, has conflicted with or will conflict with, or has
resulted in or will result in a breach of, any of the material
terms and provisions of, or has constituted or will constitute
a default under, or has resulted in or will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or pursuant to the terms
of any material indenture, mortgage, deed of trust, note, loan
or credit agreement or any other agreement or instrument
evidencing an obligation for borrowed money, or any other
agreement or instrument to which the Company may be bound or
to which any of the property or assets of the Company is
subject except where such default, lien, charge or encumbrance
would not have a material adverse effect on the Company; nor
will such action result in any violation of the provisions of
the incorporating documents or the By-Laws of the Company or
assuming due performance by the Placement Agent of its
obligations hereunder, any statute or any order, rule or
regulation applicable to the Company of any court or of any
federal, state or other regulatory authority or other
government body having jurisdiction over the Company.
(ix) The Notes and the Subscription Agreements shall
conform in all material respects to the descriptions thereof
contained in this Agreement.
(x) There are no claims for services in the nature of
a finder's or origination fee with respect to the sale of the
Notes hereunder.
(xi) To the Company's knowledge, the Company is not
in violation of any agreement pursuant to which it is
obligated to pay royalties or fees of any kind whatsoever to
any third party with respect to technology it has developed,
uses, employs or intends to use or employ.
(xii) Neither the Offering Materials nor any
amendment or supplement thereto nor any document contains any
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading. All statements of
material facts in the Offering Materials are true and correct
as of the date of the this Agreement and will be true and
correct on the Termination Date and on each Closing Date.
(xiii) All taxes which are due and payable from the
Company have been paid in full and the Company has no tax
deficiency or claim outstanding assessed or proposed against
it.
(xiv) Neither the Company nor any of its officers,
directors, employees or agents, nor any other person acting on
behalf of the Company, have, directly or indirectly, given or
agreed to give any money, gift or similar benefit (other than
legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any
governmental agency or instrumentality of any government
(domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be
in a position to help or hinder the business of the Company
(or assist it in connection with any actual or proposed
transaction) which subjects the Company to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding.
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(xv) There is no strike or other labor dispute
involving the Company pending, or to the knowledge of the
Company threatened, which could have a material adverse effect
on the assets, condition (financial or otherwise), operating
results, or business (or proposed business) of the Company.
The Company has neither received written notice nor has actual
knowledge that any executive officer or key employee, or that
any group of key employees, intends to terminate his or her
employment with the Company, nor does the Company have a
current intention to terminate the employment of any of the
foregoing.
(xvi) Subject to the performance by the Placement
Agent of its obligations hereunder and subject to the
representations and warranties of the subscribers for the
Notes, the offer and sale of the Notes complies, and will
continue to comply, up to the later of all Closing Dates or
the Termination Date, in all material respects with the
requirements of Regulation D and any other applicable federal
and state laws, statutes, rules, regulations and executive
orders.
(xvii) The Company has no employment contracts,
deferred compensation agreements or bonus, incentive,
profit-sharing, or pension plans currently in force and
effect, or any understanding with respect to any of the
foregoing, except as otherwise described in the Offering
Materials.
(xviii) Except as disclosed in the Offering
Materials, the Company is in all material respects in
compliance with all applicable Environmental Laws. The Company
has no knowledge of any past, current or, as anticipated by
the Company, future events, conditions, activities,
investigation, studies, plans or proposals that (i) would
interfere with or prevent compliance with any Environmental
Law by the Company or (ii) could reasonably be expected to
give rise to any common law or other liability, or otherwise
form the basis of a claim, action, suit, proceeding, hearing
or investigation, involving the Company and related in any way
to Hazardous Substances or Environmental Laws. Except for the
prudent and safe use and management of Hazardous Substances in
the ordinary course of the Company's business, (i) no
Hazardous Substance is or has been used, treated, stored,
generated, manufactured or otherwise handled on or at any
Facility and (ii) to the Company's best knowledge, no
Hazardous Substance has otherwise come to be located in, on or
under any Facility. No Hazardous Substances are stored at any
Facility except in quantities necessary to satisfy the
reasonably anticipated use or consumption by the Company. No
litigation, claim, proceeding or governmental investigation is
pending regarding any environmental matter for which the
Company has been served or otherwise notified or, to the
knowledge of the Company threatened or asserted against the
Company, or its officers or directors in their capacities as
such, or any Facility or the Company's business. There are no
orders, judgments or decrees of any court or of any
governmental agency or instrumentality under any Environmental
Law which specifically apply to the Company, any Facility or
any of the Company's operations. The Company has not received
from a governmental authority or other person (i) any notice
that it is a potentially responsible person for any
Contaminated site or (ii) any request for information about a
site alleged to be Contaminated or regarding the disposal of
Hazardous Substances. There is no litigation or proceeding
against any other person by the Company regarding any
environmental matter.
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For the purposes of the foregoing paragraph,
"Environmental Laws" means any applicable federal, state or
local statute, regulation, code, rule, ordinance, order,
judgment, decree, injunction or common law pertaining in any
way to the protection of human health or the environment,
including without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Toxic Substances Control
Act, the Clean Air Act, the Federal Water Pollution Control
Act and any similar or comparable state or local law;
"Hazardous Substance" means any hazardous, toxic, radioactive
or infectious substance, material or waste as defined, listed
or regulated under any Environmental Law; "Contaminated" means
the actual existence on or under any real property of
Hazardous Substances, if the existence of such Hazardous
Substances triggers a requirement to perform any
investigatory, remedial, removal or other response action
under any Environmental Laws or if such response action
legally could be required by any governmental authority;
"Facility" means any property currently owned, leased or
occupied by the Company.
(xix) The Company is in compliance in all material
respects with all currently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company 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.
(xx) Neither the Company nor anyone acting on its
behalf, other than the Placement Agent, has offered any of the
Notes (or substantially similar securities of the Company) for
sale to, or solicited offers to buy any such securities of the
Company from, or otherwise approached or negotiated with
respect thereto with any prospective purchaser except through
the Placement Agent or with the Placement Agent's consent. The
Company agrees that neither it nor anyone acting on its
behalf, other than the Placement Agent, has offered or will
offer such securities of the Company or any part thereof or
any substantially similar securities for issuance or sale to,
or solicit any offer to acquire any of the same from, anyone
so as to make the issuance and sale of the Notes subject to
the registration requirements of Section 5 of the Securities
Act. Except as otherwise specifically disclosed in the
Offering Materials, to the best of the Company's knowledge,
all of the Company's outstanding securities have been offered
and sold in compliance with all applicable federal and state
securities laws and any failure to so offer or sell securities
which is specifically in the Offering Materials has since been
cured as described in the Offering Materials.
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6. Indemnification.
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A. The Company hereby agrees that it will indemnify and hold the
Placement Agent and each officer, director, shareholder, employee or
representative of the Placement Agent and each person controlling, controlled by
or under common control of the Placement Agent within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act or the rules and
regulations promulgated under the Securities Act and the Exchange Act (the
"Rules and Regulations") harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever (including, but not limited to,
any and all reasonable legal fees and other expenses and disbursements incurred
in connection with investigating, preparing to defend or defending any action,
suit or proceeding, including any inquiry or investigation, commenced or
threatened, or any claim whatsoever or in appearing or preparing for appearance
as a witness in any action, suit or proceeding including any inquiry,
investigation or pretrial proceeding such as a deposition) to which such
indemnified person of the Placement Agent may become subject under the
Securities Act, the Exchange Act, the Rules and Regulations, or any other
federal or state statutory law or regulation at common law or otherwise, arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in (a) this Agreement, (b) the Offering Materials (c)
the Subscription Agreement, or (d) any application or other document or written
communication executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Notes under
the securities laws thereof or filed with the Commission, or any state
securities commission or agency; (ii) the omission or alleged omission from
documents described in clauses (a), (b), (c) or (d) above of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) the breach of any representation or warranty made by the
Company in this Agreement. The Company further agrees that upon demand by an
indemnified person at any time or from time to time, it will promptly reimburse
such indemnified person for any loss, claim, damage, liability, cost or expense
actually and reasonably paid by the indemnified person as to which the Company
has indemnified such person pursuant hereto. Notwithstanding the foregoing
provisions of this Paragraph 6 A, any such payment or reimbursement by the
Company of fees, expenses or disbursements incurred by an indemnified person in
any proceeding in which a final judgment by a court of competent jurisdiction
(after all appeals or the expiration of time to appeal) is entered against such
indemnified person as a direct result of such person's willful misfeasance will
be promptly repaid to the Company, if previously paid. Anything to the contrary
not withstanding, the indemnity set forth in this PARAGRAPH A shall not extend
to liability based upon information provided in writing by the Placement Agent
specifically for use in the documents referred to herein.
B. The Placement Agent hereby agrees that it will indemnify and hold
the Company and each officer, director, shareholder, employee or representative
of the Company and each person controlling, controlled by or under common
control of the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or the Rules and Regulations harmless from and
against any and all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all reasonable legal fees and other
expenses and disbursements incurred in connection with investigating, preparing
to defend or defending any action, suit or proceeding including any inquiry,
investigation or pretrial proceeding such as a deposition) to which such
indemnified person of the Company may become subject under the Securities Act,
the Exchange Act, the Rules and Regulations or other federal or state statutory
law or regulation at common law or otherwise, based upon the conduct of the
Placement Agent or its employees in its acting as Placement Agent for the
Offering. Notwithstanding the foregoing provisions of this Paragraph 6 B, any
such payment or reimbursement by the Placement Agent of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in which a
final judgment by a court of competent jurisdiction (after all appeals or the
expiration of time to appeal) is entered against such indemnified person as a
direct result of such person's willful misfeasance will be promptly repaid to
the Placement Agent, if previously paid.
10
C. Promptly after receipt by an indemnified party under either
Paragraph A or B hereof, as the case may be, of the notice of commencement of
any action covered by Paragraph A or B hereof, such indemnified party shall
within five (5) business days notify the indemnifying party of the commencement
thereof; the omission by one indemnified party to so notify the indemnifying
party shall not relieve the indemnifying party of its obligation to indemnify
any other indemnified party that has given such notice and shall not relieve the
indemnifying party of any liability outside of this indemnification. In the
event that any action is brought against the indemnified party, the indemnifying
party will be entitled to participate therein and, to the extent it may desire,
to assume and control the defense thereof with counsel chosen by it. After
notice from the indemnified party, the indemnifying party will not be liable to
such indemnified party under such subparagraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, but the indemnified party may, at its own expense, participate in such
defense by counsel chosen by it, without, however, impairing the indemnifying
party's control of the defense. Notwithstanding anything to the contrary
contained herein, the indemnified party shall have the right to choose its own
counsel and control the defense of any action, all at the expense of the
indemnifying party, if: (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to such
indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party. No settlement of any action or proceeding against an
indemnified party shall be made without the consent of the indemnifying party.
D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Paragraph A of this
Section 6 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company to the Placement Agent on grounds of
policy or otherwise, the Company and the Placement Agent shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with the investigation or defense of
same) to which the Company and the Placement Agent may be subject in such
proportion so that the Placement Agent is responsible for that portion
represented by the percentage that the aggregate of its placement commission
under this Agreement bears to the aggregate offering price for all Notes sold in
the Offering and the Company is responsible for the balance, except as the
Company may otherwise agree to reallocate a portion of such liability with
respect to such balance with any other person; provided, however, that no person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Securities Act shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Paragraph D,
any person controlling, controlled by or under common control with the Placement
Agent, or any partner, director, officer, employee, representative or any agent
of any thereof, shall have the same rights to contribution as the Placement
Agent and each person controlling, controlled by or under common control with
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each officer of the Company and each director of the
Company shall have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against the other party under this Paragraph D,
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any obligation they may have hereunder or otherwise. The indemnity
and contribution agreements contained in this Section 6 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified person or any termination of this Agreement.
11
7. Payment of Expenses.
-------------------
Whether or not the Placement is successfully completed, the Company
hereby agrees to bear all of the Company's expenses in connection with the
Offering, including, but not limited to the following: filing fees, printing and
duplicating costs, advertisements, postage and mailing expenses with respect to
the transmission of offering material, its marketing and road show expenses,
registrar and transfer agent fees, bank escrow fees and expenses, its counsel
and accounting fees, issue and transfer taxes, if any, and "Blue Sky" counsel
fees and expenses. It is agreed that the Company's counsel shall perform the
required Blue Sky legal services. In this connection, Blue Sky applications for
registration of the Notes or exemption therefrom shall be made in such states
and jurisdictions as shall be reasonably requested by the Placement Agent
provided that such states and jurisdictions do not require the Company to
qualify as a foreign corporation or to file a general consent to service of
process. The Company shall also pay reasonable expenses for travel and lodging
incurred by the Placement Agent in performing its duties hereunder (the
"Placement Agent Offering Expenses"), the amount of such expenses to be deducted
from the Expense Allowance. $12,000 of the $25,000 Expense Allowance advance
referred to in PARAGRAPH 2 D above, shall be retained by the Company to pay
Placement Agent Offering Expenses. The balance shall be paid to the Placement
Agent upon the execution of this Agreement. In no event will the Company be
required to pay more than $25,000 in expenses to the Agent if the Placement is
not consummated.
8. Conditions of the Placement Agent's Obligations.
-----------------------------------------------
The obligations of the Placement Agent hereunder shall be subject to
the continuing accuracy of the representations and warranties of the Company
herein as of the date hereof and as of the Closing Date and each subsequent
Closing Date, if any, as if they had been made on and as of the Closing Date or
each subsequent Closing Date, as the case may be; the accuracy on and as of the
Closing Date or subsequent Closing Date, if any, of the statements of the
officers of the Company made pursuant to the provisions hereof; and the
performance by the Company on and as of the Closing Date and each subsequent
Closing Date, if any, of its covenants and obligations hereunder and to the
following further conditions:
(a) On the Closing Date, the Placement Agent shall receive the
opinion of Xxxxx & Xxxxxxx, counsel to the Company, dated the Closing
Date and addressed to the Placement Agent and to each purchaser in form
and substance satisfactory to counsel for the Placement Agent, in
substantially the form set forth below, with such changes as are agreed
upon by Xxxxx & Xxxxxxx, the Placement Agent and Counsel for the
Placement Agent:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of its jurisdiction and is duly qualified to do business
and is in good standing in all jurisdictions in which the
failure to so qualify would have a material adverse effect on
the business of the Company; the Company has full corporate
power and authority and, to the best of such counsel's
knowledge, has all necessary authorizations, approvals,
licenses, certificates and permits of and from all
governmental regulatory officials and bodies to own or lease
its properties and conduct its business as described in the
Offering Materials and is in compliance with (A) all such
authorizations, approvals, orders, licenses, certificates and
permits and (B) all federal, state and local laws, rules and
regulations applicable to the business in which it is engaged.
Subject to state securities law requirements, no consent,
authorization or order of, and no filing with, any United
States Court, government agency or other body is required by
the Company for the issuance of the Notes, Underlying Shares
or the Placement Agent's Warrants. Assuming the accuracy of
the representations and warranties made by each purchaser in
such purchaser's Subscription Agreement and the factual
matters contained in the representations and warranties in
this Placement Agreement, no consent, authorization or order
of, and no filing with any court, government agency or other
body (other than as may be required under state securities
laws) is required by the Company for the issuance of the
Notes, Underlying Shares and the Placement Agent's Warrants.
12
(ii) This Agreement, the Subscription Agreement, the
Notes, the Underlying Shares and the Placement Agent's
Warrants have been duly and validly authorized, executed and
delivered by the Company and are valid and legally binding
agreements or obligations of the Company, enforceable in
accordance with their terms, except to the extent that the
enforceability hereof or thereof may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or similar
laws from time to time in effect and affecting the rights of
creditors generally, (B) limitations upon the power of a court
to grant specific performance or any other equitable remedy,
and (C) a finding by a court of competent jurisdiction that
the indemnification provisions herein are in violation of
public policy.
(iii) The Underlying Shares and the shares underlying
the Placement Agent's Warrants have been duly authorized and
will be, upon the conversion of the Notes and/or exercise of
the Placement Agent's Warrants and payment therefor, validly
issued, fully paid and non-assessable and the holders thereof
will not be subject to personal liability solely by reason of
being such holders; none of the Underlying Shares or the
shares underlying the Placement Agent's Warrants to the best
of such counsel's knowledge, are subject to the preemptive
rights of any stockholder of the Company, and all corporate
action required to be taken for the authorization, issue and
sale of such securities has been duly and validly taken.
(iv) As of September 30, 1997, the authorized capital
stock of the Company consists of 40 million shares of common
stock (the "Common Stock"), $0.01 per share par value, of
which 12,199,163 shares are issued and outstanding, and 2
million shares of preferred stock, $1.00 per share par value,
none of which are outstanding. All issued and outstanding
shares of Common Stock have been duly authorized and such
shares are validly issued, are fully paid and non-assessable
and the holders thereof have no preemptive rights, no rights
of rescission with respect thereto and are not subject to
personal liability solely by reason of being such holders. No
shares of Common Stock were issued in violation of the
preemptive rights of any holders of any capital stock of the
Company. To the best of such counsel's knowledge, there are no
liens, charges, encumbrances, pledges, security interests,
defects, or material equitable rights of any kind to which any
outstanding shares of Common Stock are subject. Except as set
forth in the Offering Materials, there are (A) no outstanding
warrants, options or rights to subscribe for or purchase any
capital stock or other securities of the Company, (B) no
voting trusts or voting agreements among, or irrevocable
proxies executed by, principal stockholders of the Company,
(C) no existing rights of stockholders to require the Company
to register any securities of the Company or to participate
with the Company in any registration by the Company of its
securities, and (D) no agreements between the Company and any
of its stockholders providing for the purchase or sale of the
Company's capital stock.
13
(v) To the best of such counsel's knowledge, there is
no litigation or governmental proceeding pending or threatened
against, or involving the properties or business of, the
Company which might materially and adversely affect the value
or the operation of the properties or the business of the
Company except as referred to in the Offering Materials.
(vi) Each Note and Placement Agent's Warrant conform
in all material respects to the description thereof contained
in this Agreement.
(vii) To the best of such counsel's knowledge,
neither the execution and delivery of this Agreement, nor the
Subscription Agreement, nor the issue and sale of the Notes,
Underlying Shares or the Placement Agent's Warrants, nor the
consummation of any of the transactions contemplated herein or
therein, nor the compliance by the Company with the terms and
provisions hereof or thereof, has conflicted with or will
conflict with, or has resulted in or will result in a breach
of, any of the terms and provisions of, or has constituted or
will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
pursuant to the terms of any indenture, mortgage, deed of
trust, note, loan or credit agreement or any other agreement
or instrument evidencing an obligation for borrowed money, or
any other agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of
the property or assets of the Company is subject; nor will
such action result in any violation of the provisions of the
incorporation documents or the By-Laws of the Company or,
assuming due performance by the Placement Agent of its
obligations hereunder, any statute or any order, rule or
regulation applicable to the Company of any court or of any
federal, state or other regulatory authority or other
government body having jurisdiction over the Company, subject
to state securities laws exceptions.
(ix) The Subscription Agreement and the Investment
Letter (the Subscription Agreement and the Investment Letter
are referred to collectively as the "Subscription Agreement")
comply as to form in all material respects with the
requirements of Regulation D promulgated by the Commission
pursuant to the Securities Act and assuming without
independent investigation (A) the accuracy and completeness of
all information provided in the Subscription Agreement, (B)
the correctness of the investors' responses set forth in the
Subscription Agreement, and (C) the executed Subscription
Agreement constitute all of the Subscription Agreement, no
registration under the Securities Act is required in
connection with the sale and issuance of the Notes; a
statement that such counsel has reviewed the Offering
Materials and nothing has come to such counsel's attention to
lead them to believe that either the Offering Materials or any
amendment or supplement thereto contain any untrue statement
of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading (except for the financial
statements, notes thereto and other statistical and financial
information included therein or omitted therefrom as to which
such counsel need express no opinion).
14
At each subsequent Closing Date after the Closing Date, if
any, the Placement Agent shall have received the favorable opinions of
Xxxxx & Xxxxxxx, counsel to the Company, dated such subsequent Closing
Date, addressed to the Placement Agent and in form and substance
satisfactory to counsel for the Placement Agent.
(b) On or prior to the Closing Date, counsel for the Placement
Agent shall have been furnished such documents, certificates and
opinions as they may reasonably require for the purpose of enabling
them to review or pass upon the matters referred to in SUBPARAGRAPH (A)
of this SECTION, or in order to evidence the accuracy, completeness or
satisfaction of any of the representation, warranties or conditions
herein contained.
(c) On and prior to the Closing Date, (i) there shall have
been no material adverse change nor development involving a prospective
change in the condition or prospects or the business activities,
financial or otherwise, of the Company, or taken as a whole, from the
latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the
ordinary course of business, entered into by the Company from the
latest date as of which the financial condition of the Company, is set
forth in the Offering Materials which is material to the Company, which
has not been disclosed to the Placement Agent in writing; (iii) the
Company shall not be in default under any provision of any instrument
relating to any outstanding indebtedness; (iv) since the date of the
Offering Materials, the Company shall not have issued any securities or
declared or paid any dividend or made any distribution of its capital
stock of any class, except for the issuance of Common Stock pursuant to
the exercise of currently existing warrants or options, and there has
not been any material change in the debt (long or short term) or
liabilities or obligations of the Company (contingent or otherwise);
(v) no material amount of the assets of the Company shall have been
pledged or mortgaged, except in the ordinary course of business or as
indicated or contemplated in the Offering Materials; and (vi) no
action, suit or proceeding, at law or in equity, shall have been
pending or threatened against the Company or affecting any of its
properties or businesses before or by any court or federal or state
commission, board or other administrative agency wherein an unfavorable
ruling would materially adversely affect the business, prospects,
financial condition or income of the Company, except as set forth in
the Offering Materials.
(d) At each Closing Date, the Placement Agent shall have
received a certificate of the Company signed by its President and Chief
Executive Officer and by its Vice President and Chief Financial
Officer, dated as of such Closing Date, in the form attached hereto as
EXHIBIT II.
(e) The Company, having obtained all necessary consents and
approvals, shall have authorized a sufficient number of shares of
Common Stock necessary to cover the maximum number of Underlying Shares
that may be issued pursuant to the Offering or otherwise required by
this Agreement.
15
9. Termination.
-----------
This Agreement shall terminate if the Closing Date does not take place
on or before the Termination Date or as soon thereafter as the funds received
from such subscriptions have cleared the banking system in the normal course of
business. Upon such termination, all subscription documents and payments for
Notes, without interest, or deduction shall be returned to the respective
subscribers, the Placement Agent shall have no further obligation to the
Company, and the Company shall terminate the Placement. In such case, the
Company will have no obligation to pay the Placement Agent for fees covered in
this Agreement, except as otherwise set forth elsewhere in this Agreement.
Either the Placement Agent or the Company may terminate the Placement in its
sole discretion prior to any closing hereunder. In the event that the Company
determines to terminate the Placement from and after the date hereto through the
end of the Offering Period for any reason other than the Placement Agent's
breach of the terms of this Agreement, and the Placement Agent is willing to
proceed, the Company shall remain liable for all fees and expenses of the
Placement Agent's counsel.
10. Miscellaneous.
-------------
A. All covenants, warranties and representations herein contained shall
survive the Closing Date and any subsequent closings, or any investigation made
by the party relying upon such warranty and/or representation subject to
applicable statues of limitations.
B. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all which shall be deemed to be
one and the same instrument
C. All notices and communications required or permitted to be given
hereunder shall be given in writing, effective upon receipt, and sent by United
States certified or registered mail, return receipt requested and postage
prepaid, personally delivered with receipt acknowledged, or by overnight
courier, charges prepaid with receipt acknowledged addressed as follows:
To the Placement Agent:
----------------------
X. Xxxxxxx Securities, LLC
1345 Avenue of the Xxxxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx X. Xxxxxxxxx
Chief Executive Officer
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
1345 Avenue of the Xxxxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
To the Company:
--------------
Fortune Natural Resources Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
President and
Chief Executive Officer
16
with a copy to:
Xxxxx Xxxxxx, Esq.
Xxxxx & Xxxxxxx
00000 Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
or to such other address of which written notice is given to the other party.
D. This Agreement shall be governed by, and construed in accordance
with the laws of the State of New York without giving effect to conflicts of
laws.
E. This Agreement contains the entire understanding between the parties
hereto and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
F. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
X. XXXXXXX SECURITIES, LLC
By: /s/ Xxxxx X. Xxxxxxxxx, Chief Executive Officer
------------------------------------------------
Xxxxx X. Xxxxxxxxx, Chief Executive Officer
FORTUNE NATURAL
RESOURCES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx, President
------------------------------------
Xxxxxx X. Xxxxxxxxx, President
and Chief Executive Officer
17
[LETTERHEAD]
October 27, 1997
To the Recipients of the Information
Documents relating to the Offering of
Notes of Fortune Natural Resources Corporation
Re: Amendment #1 to the Terms of the Offering
Dear Recipient:
The Company and the Placement Agent have mutually agreed to modify the Offering
as follows:
1. The expiration date of the Offering period during which subscriptions for
Notes may be received has been extended to November 7, 1997.
2. The second alternative conversion price for the Note will be 5% instead of
10% above the average daily Closing Price of the Common Stock for the 60
calendar day period immediately preceding May 1, 1999.
3. The demand registration rights referred to in the Subscription Agreement will
also include the Notes and will commence 30 days after the final Closing of the
Offering instead of January 1, 1999.
4. The Notes will be issued in the lower of denominations equal to $50,000 or
integral multiples thereof instead of $10,000 integral multiples thereof or the
lowest principal amount of the Notes purchased in the Offering.
5. The Company's primary lender, Credit Lyonnais New York Branch (the "Bank"),
has requested additional conditions in the Note relating to subordination which
could materially impact the ability of the Note holders to enforce their rights.
Among other restriction, these conditions prohibit Note holders from instituting
legal proceedings for payment of defaulted interest for a period of 90 days
after the occurrence of the default.
Except as expressly provided herein all terms and conditions of the Offering
remain unchanged.
As of the date hereof the Company has received executed subscriptions and
cleared funds for the purchase of $1.25 million in principal amount of Notes.
The Company intends to effect the initial closing of the Offering on Wednesday,
October 29, 1997. In light of the changes in the Offering described herein, any
person who has executed and delivered a Subscription Agreement may withdraw his
subscription by notifying the undersigned on or before 5:00 PM, Eastern Standard
Time, October 28, 1997 by mail addressed to X. Xxxxxxx Securities LLC, 1345
Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or by facsimile
transmission to telephone number (000) 000-0000.
Very truly yours,
X. XXXXXXX SECURITIES LLC
Xxxxx X. Xxxxxxxxx, Chief Executive Officer
cc: Fortune Natural Resources Corporation
Dated as of: October 28, 1997
X. Xxxxxxx Securities, LLC
1345 Avenue of the Xxxxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Dear Sirs:
The Placement Agreement between Fortune Natural Resources Corporation and X.
Xxxxxxx Securities, LLC dated as of October 14, 1997 is hereby amended to
increase the amount of the Offering from $3.5 million in aggregate principal
amount of Notes to $4.5 million in aggregate principal amount of Notes.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
the Agreement as of the date first written above.
X. XXXXXXX SECURITIES, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxxxx, Chief Executive Officer
FORTUNE NATURAL
RESOURCES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx, President
and Chief Executive Officer
[FORTUNE NATURAL RESOURCES CORPORATION LETTERHEAD]
November 7, 1997
Xxxxx X. Xxxxxxxxx VIA FACSIMILE (000) 000-0000
Chief Executive Officer
X. Xxxxxxx Securities, L.L.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxxxx:
The Placement Agent Agreement governing the private placement of 12%
subordinated notes by Fortune Natural Resources Corporation provides that the
offering shall expire on October 31, 1997 unless extended by the parties. We
have previously agreed to extend the offering period through November 7.
Fortune hereby proposes that the offering period be further extended
through November 19, 1997 on the terms set forth in our letter dated November 3.
If this proposal is acceptable, please so indicate by signing and dating this
letter where indicated and returning it to the undersigned.
Very truly yours,
/s/ J. Xxxxxxx Xxxxx
-----------------------
J. Xxxxxxx Xxxxx
Vice President and Chief Financial Officer
ACCEPTED AND AGREED TO this 7th day of November, 1997.
X. XXXXXXX SECURITIES, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxxx
Chief Executive Officer
