DRAFT OF 12/12
3DX TECHNOLOGIES INC.
Common Stock
UNDERWRITING AGREEMENT
December , 1996
HOWARD, WEIL, LABOUISSE,
XXXXXXXXXX INCORPORATED
XXXXXX XXXXXXX & CO.
As Representatives of the several Underwriters
c/o Howard, Weil, Labouisse, Freidrichs Incorporated
Texaco Heritage Plaza
1111 Xxxxx, Suite 2250
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Each of 3DX Technologies Inc., a Delaware corporation (the "Company") and
Landmark Graphics Corporation, a Delaware corporation (the "Selling
Stockholder") hereby confirms its agreement with the several underwriters named
in Schedule 1 hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell, and the Selling Stockholder proposes to
sell, to the several Underwriters 2,500,000 shares and 449,862 shares,
respectively (such shares in the aggregate number of 2,949,862 shares will be
collectively referred to herein as "Firm Securities") of the Company's Common
Stock, par value $.01 per share ("Common Stock"). The Company also proposes to
issue and sell to the several Underwriters not more than 442,480 additional
shares of Common Stock if requested by the Representatives as provided in
Section 3 of this Agreement. Any and all shares of Common Stock to be purchased
by the Underwriters pursuant to such option are referred to herein as the
"Option Securities", and the Firm Securities and any Option Securities are
collectively referred to herein as the "Securities".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) A registration statement on Form S-1 (File No. 333-14473)
with respect to the Securities, including a prospectus subject to
completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the
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Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the
Securities Act, either (A) if the Company relies on Rule 434 under the
Securities Act, a Term Sheet (as hereinafter defined) relating to the
Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as
is required or permitted by Rules 434, 430A and 424(b) under the
Securities Act or (B) if the Company does not rely on Rule 434 under the
Securities Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A under the Securities Act or
permitted by Rule 424(b) under the Securities Act, and in the case of
either clause (i)(A) or (i)(B) of this sentence as have been provided to
and approved by the Representatives; PROVIDED, HOWEVER, that such
approval by the Representatives is not unreasonably withheld and that
such approval shall not be required if the filing of such documents shall
be required by law or (ii) if such registration statement, as it may have
been amended, has not been declared by the Commission to be effective
under the Securities Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representatives prior to the execution
of this Agreement; PROVIDED, HOWEVER, that such approval by the
Representatives is not unreasonably withheld and that such approval shall
not be required if the filing of such documents shall be required by law.
The Company may also file a related registration statement with the
Commission pursuant to Rule 462(b) under the Securities Act for the
purpose of registering certain additional Securities, which registration
shall be effective upon filing with the Commission. As used in this
Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto and including any information
omitted therefrom pursuant to Rule 430A under the Securities Act and
included in the Prospectus (as hereinafter defined); the term "Rule
462(b) Registration Statement" means any registration statement filed
with the Commission pursuant to Rule 462(b) under the Securities Act
(including the Registration Statement and any Preliminary Prospectus or
Prospectus incorporated therein at the time such Registration Statement
becomes effective); the term "Registration Statement" includes both the
Original Registration Statement and any Rule 462(b) Registration
Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with any registration statement or any
amendment thereto (including the prospectus subject to completion, if
any, included in the Registration Statement or any amendment thereto at
the time it was or is declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the
Securities Act, the Term Sheet relating to the Securities that is
first filed pursuant to Rule 424(b)(7) under the Securities Act,
together with the Preliminary Prospectus identified therein that
such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the
Securities Act, the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Securities Act; or
(C) if the Company does not rely on Rule 434 under the
Securities Act and if no prospectus is required to be filed
pursuant to Rule 424(b) under the Securities Act, the prospectus
included in the Registration Statement;
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and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Securities Act. Any reference herein
to the "date" of a Prospectus that includes a Term Sheet shall mean the
date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the Securities Act and the
rules and regulations of the Commission thereunder and (ii) did not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the Securities
Act and the published rules and regulations of the Commission thereunder
and (ii) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading. When the Prospectus or any Term Sheet that is a
part thereof or any amendment or supplement to the Prospectus is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
part thereof or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective) and on the Firm Closing Date and any Option Closing
Date (both as hereinafter defined), the Prospectus, as amended or
supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the
Securities Act and the published rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing provisions of this
paragraph (b) do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for
use therein.
(c) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i)
the Company has filed a Rule 462(b) Registration Statement in compliance
with and that is effective upon filing pursuant to Rule 462(b) and has
received confirmation of its receipt and (ii) the Company has given
irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Securities Act or the
Commission has received payment of such filing fee.
(d) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware and is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the Company.
(e) The Company has no subsidiaries.
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(f) The Company has full corporate power to own or lease its
properties and conduct its businesses as described in the Registration
Statement and the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus; and the Company has full
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it.
(g) On the Firm Closing Date, the Company will have an
authorized, issued and outstanding capitalization as set forth in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable. The Firm Securities and the Option Securities have
been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. Except as
described in the Prospectus, no holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully
exercised or waived to require the Company to register the offer or sale
of any securities owned by such holder under the Securities Act in the
public offering contemplated by this agreement.
(h) On the Firm Closing Date, the capital stock of the Company
will conform to the description thereof contained in the Prospectus or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus.
(i) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no outstanding (A) securities or obligations of the Company
convertible into or exchangeable for any capital stock of the Company,
(B) warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (C) obligations of the Company to issue any
shares of capital stock, any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options.
(j) The financial statements and schedules of the Company
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present the financial position of the Company and the results of
operations and changes in financial condition as of the dates and periods
therein specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present, on
the basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(k) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and delivered their report with respect to the
audited financial statements and schedules included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public
accountants as required by the Securities Act and the applicable
published rules and regulations thereunder.
(l) Xxxxx Xxxxx Company ("Xxxxx Xxxxx") are independent
petroleum engineers with respect to the Company.
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(m) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(n) No legal or governmental proceedings are pending to which
the Company is a party or to which the property of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and no such
proceedings have been threatened against the Company or with respect to
any of its properties; and no contract or other document is required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described
therein (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or filed as required.
(o) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained, such as may be required under state securities or blue sky
laws and, if the registration statement (as amended) filed with respect
to the Securities is not effective under the Securities Act as of the
time of execution hereof, such as may be required (and shall be obtained
as provided in this Agreement) under the Securities Act, and if
registration of the class of securities offered hereby is not effective
under the Securities Exchange Act of 1934, as amended, (the "Exchange
Act") as of the time of execution hereof, such as may be required under
the Exchange Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, (x) any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company is a party or by which the
Company or any of its properties are bound, or (y) the charter documents
or by-laws of the Company, or (z) any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator applicable to the Company other than with respect to (x),
such conflicts or breaches which would not, individually or in the
aggregate, have a material adverse effect on the Company.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus,
the Company has not sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any
material adverse change, or any development reasonably expected to
involve a material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth, or results of the
operations of the Company, except in each case as described in or
contemplated by the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(q) The Company has not, directly or indirectly, (i) taken 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 or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other
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securities of the Company; PROVIDED, HOWEVER, that the sale by the
Company and the Selling Stockholder to the Underwriters of the Securities
shall not be deemed to violate the terms of this representation, warranty
and agreement .
(r) The Company has good title to the interests in oil and gas
properties it owns, good and marketable title in fee simple to all other
real property it owns and good and marketable title to all personal
property it owns, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or any
Preliminary Prospectus or such as do not materially adversely affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and any real
property and buildings held under lease by the Company are held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company.
(s) The partnership agreements, participation agreements, joint
development agreements, joint operating agreements, farm-out agreements
and other agreements described in the Prospectus or any Preliminary
Prospectus relating to the Company's rights with respect to the
ownership, lease or operation of oil and gas properties, the acquisition
of interests in oil and gas properties or the exploration for,
development of or production of oil and gas reserves thereon constitute
valid and binding agreements of the Company and, to the best knowledge of
the Company, of the other parties thereto, enforceable in accordance with
their terms, except as enforceability may be subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(t) The information underlying the estimates of the hydrocarbon
reserves of the Company, which was supplied by the Company to Xxxxx
Xxxxx for purposes of auditing the hydrocarbon reserve reports and
estimates of the Company, including, without limitation, production,
costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of
production, was true and correct in all material respects on the dates
such estimates were made and such information was supplied and was
prepared in accordance with customary industry practices; other than
normal production of the hydrocarbon reserves and intervening spot market
product price fluctuations described in the Prospectus or any Preliminary
Prospectus, the Company is not aware of any facts or circumstances that
would result in a materially adverse change in the hydrocarbon reserves,
or the present value of future net cash flows therefrom, as described in
the Prospectus or any Preliminary Prospectus; estimates of such
hydrocarbon reserves and present values as described in the Prospectus or
any Preliminary Prospectus comply in all material respects to the
applicable requirements of Regulation S-X and Industry Guide 2 under the
Securities Act.
(u) Except as described in the Prospectus or any Preliminary
Prospectus, as of the date hereof, (i) all royalties, rentals, deposits
and other amounts due on the oil and gas properties of the Company have
been properly and timely paid, and no proceeds from the sale or
production attributable to the oil and gas properties of the Company are
currently being held in suspense by any purchaser thereof, except where
such amounts due could not, singly or in the aggregate, have a material
adverse effect on the Company's financial condition or results of
operations and (ii) there are no claims under take-or-pay contracts
pursuant to which natural gas purchasers have any make-up rights
affecting the interest of the Company in its oil and gas properties,
except where such claims could not, singly or in the aggregate, have a
material adverse effect on the Company's financial condition or results
of operations.
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(v) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(1) the Company has not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (2) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (3) there
has not been any material change in the capital stock, short-term debt or
long-term debt of the Company, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged.
(x) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business, and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company has filed all federal, state and local tax
returns that are required to be filed or has requested extensions thereof
required to be filed through the date hereof (except in any case in which
the failure so to file would not have a material adverse effect on the
Company) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(z) The Company is not in violation of any federal or state law
or regulation relating to occupational safety and health or to the
storage, handling or transportation of hazardous or toxic materials and
the Company has received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct its
business, and the Company is in compliance with all terms and conditions
of any such permit, license or approval, except any such violation of law
or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(aa) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(bb) The Company does not own any shares of stock or any other
equity securities of any corporation or have any equity interest in any
firm, partnership, association or other entity,
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except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(cc) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company is a party or by which the Company or any
of its properties is bound or which may affect the property, business or
operations of the Company, other than such defaults which would not,
individually or in the aggregate, have a material adverse effect on the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The
Selling Stockholder represents and warrants to, and agrees with, each of the
several Underwriters that:
(a) The Selling Stockholder has full corporate power to enter into
this Agreement and to sell, assign, transfer and deliver to the Underwriters the
Securities to be sold by the Selling Stockholder hereunder in accordance with
the terms of this Agreement; the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the Selling
Stockholder; and this Agreement has been duly executed and delivered by the
Selling Stockholder.
(b) The Selling Stockholder has duly executed and delivered a power of
attorney and custody agreement (with respect to such Selling Stockholder, the
"Power-of-Attorney" and the "Custody Agreement", respectively), each in the form
heretofore delivered to the Representatives, appointing C. Xxxxxx Xxxxx or Xxx
X. Xxxxxxx, acting individually as such Selling Stockholder's attorney-in-fact
(the "Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Stockholder and appointing Continental Stock
Transfer & Trust Co. as custodian thereunder (the "Custodian"). Certificates in
negotiable form, endorsed in blank or accompanied by blank stock powers duly
executed, with signatures appropriately guaranteed, representing the Securities
to be sold by such Selling Stockholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement. Such Selling Stockholder has full corporate power to enter
into the Custody Agreement and the Power-of-Attorney, the execution and delivery
of which have been duly authorized by all necessary corporate action of such
Selling Stockholder; the Custody Agreement and the Power-of-Attorney have been
duly executed and delivered by such Selling Stockholder and, assuming due
authorization, execution and delivery by the Custodian, are the legal, valid,
binding and enforceable instruments of such Selling Stockholder. Such Selling
Stockholder agrees that each of the Securities represented by the certificates
on deposit with the Custodian is subject to the interests of the Underwriters
hereunder, that the arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the Attorney-in-Fact to
execute and deliver this Agreement, to agree on the price at which the
Securities (including such Selling Stockholder's Securities) are to be sold to
the Underwriters, and to carry out the terms of this Agreement, are to that
extent irrevocable and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or the
Custody Agreement, by any act of such Selling Stockholder, by operation of law
or otherwise, by its liquidation or dissolution or by the occurrence of any
other event. If the Selling Stockholder shall liquidate or dissolve, or if any
other event should occur, before the delivery of such Securities hereunder, the
certificates for such Securities deposited with the Custodian shall be delivered
by the Custodian in accordance with the respective terms and conditions of this
Agreement as if such termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the Attorney-in-Fact
shall have received notice thereof.
(c) The Selling Stockholder has good and marketable title to the
Securities to be sold by it hereunder and upon sale and delivery of, and payment
for, such Securities, as provided herein, the
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Selling Stockholder will convey good and marketable title to such Securities,
free and clear of any interests, liens, encumbrances, equities, claims or other
defects.
(d) The Selling Stockholder has not, directly or indirectly, (i) taken
any action designed to cause or 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 or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Stockholder under this Agreement).
(e) The Selling Stockholder has reviewed the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and to the best knowledge of the Selling Stockholder,
the information regarding the Selling Stockholder set forth therein under the
captions "Principal and Selling Stockholders" is complete and accurate.
(f) The sale of the Securities to the Underwriters by the Selling
Stockholder pursuant to this Agreement, the compliance by the Selling
Stockholder with the other provisions of this Agreement, the Custody Agreement
and the consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or qualification of
or with any governmental authority, except such as have been obtained, such as
may be required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act and the Exchange
Act or (ii) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or any of the Selling
Stockholder's properties are bound, or the charter documents or by-laws of the
Selling Stockholder or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Selling Stockholder.
4. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell, and the Selling Stockholder agrees to sell, to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company and the Selling Stockholder, at a purchase price of
$________ per share, the number of Firm Securities set forth opposite the name
of such Underwriter in Schedule 1 hereto, plus any additional number of
Securities which such Underwriter may be obligated to purchase pursuant to
Section 11 of this Agreement. One or more certificates in definitive form for
the Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Representatives request upon notice to the Company at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company and the Selling Stockholder to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day funds
(the "Wired Funds") to accounts designated by the Company and the Selling
Stockholder. Such delivery of and payment for the Firm Securities shall be made
at the offices of Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxx 00000 at 8:30 A.M., Central Standard Time, on December ___, 1996, or at
such other place, time or date as the Representatives and the Company may agree
upon or as the Representatives may determine pursuant to Section 9 hereof, such
time and date of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or
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certificates for the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's transfer
agent or registrar or of Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
("Xxxxxx Xxxx") at least 24 hours prior to the Firm Closing Date. The Company
and the Selling Stockholder shall not be obligated to deliver any Firm
Securities on the Firm Closing Date except upon payment for such Firm Securities
to be purchased on such date as provided herein.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3. The option granted hereby may be exercised as to all or any part of
the Option Securities (but not more than three times) within thirty days after
the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may
exercise the option granted hereby in whole or in part (but not more than three
times) by giving notice in writing or by telephone (confirmed in writing) to the
Company setting forth the aggregate number of Option Securities as to which the
several Underwriters are then exercising the option and the date and time for
delivery of and payment for such Option Securities. Any such date of delivery
shall be determined by the Representatives but shall not be earlier than two
business days or later than five business days after such exercise of the option
and, in any event, shall not be earlier than the Firm Closing Date. The time
and date set forth in such notice, or such other time on such other date as the
Representatives and Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively. The Company shall not be obligated to deliver any Option
Securities on the Option Closing Date except upon payment for such Option
Securities to be purchased on such date as provided herein.
(c) The Company and the Selling Stockholder hereby acknowledge that
the wire transfer by or on behalf of the Underwriters of the purchase price for
any Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the Securities
from the Company and the Selling Stockholder. Furthermore, in the event that
the Underwriters wire funds to the Company and the Selling Stockholder prior to
the completion of the closing of a purchase of Securities, the Company and the
Selling Stockholder hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company and
the Selling Stockholder will not be entitled to the wired funds and shall return
the wired funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Securities is not
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completed and the wire funds are not returned by the Company and the Selling
Stockholder to the Underwriters on the same day the wired funds were received by
the Company and the Selling Stockholder, the Company and the Selling Stockholder
agree to pay to the Underwriters in respect of each day the wire funds are not
returned by it, in same-day funds, interest on the amount of such wire funds in
an amount representing the Underwriters' cost of financing as reasonably
determined by Xxxxxx Xxxx.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
5. OFFERING BY THE UNDERWRITERS. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
6. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Underwriters and the Selling Stockholder that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Securities Act. During any
time when a prospectus relating to the Securities is required to be
delivered under the Securities Act, the Company (i) will comply with all
requirements imposed upon it by the Securities Act and the rules and
regulations of the Commission thereunder to the extent necessary to
permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or
any Rule 462(b) Registration Statement of which the Representatives
previously have been advised and furnished with a copy for a reasonable
period of time prior to the proposed filing and as to which filing the
Representatives shall not have given their consent, which consent shall
not be unreasonably withheld and that such consent shall not be required
if the filing of such documents shall be required by law. The Company
will prepare and file with the Commission, in accordance with the
published rules and regulations of the Commission, promptly upon request
by the Representatives or counsel for the Underwriters, any amendments to
the Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of
the Securities by the several Underwriters, and will use its best efforts
to cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of
the time when the Registration Statement or any amendment thereto has
been filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory
to the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Original Registration Statement or any Rule 462(b) Registration
-11-
Statement or any amendment thereto or any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the
initiation, threatening or contemplation of any proceeding for any such
purpose or (iv) any request made by the Commission for amending the
Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) To use its reasonable best efforts in cooperation with the
Representatives to qualify the Securities for offering and sale under the
securities or blue sky laws of such jurisdictions as the Representatives
may reasonably request and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the
Securities, PROVIDED, HOWEVER, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be delivered
under the Securities Act or (ii) the Option Closing Date, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any 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, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Securities Act or
the published rules or regulations of the Commission thereunder, the
Company will promptly notify the Representatives thereof and, subject to
Section 5(a) hereof, will prepare and file with the Commission, at the
Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of
the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) or any Rule 462(b) Registration Statement, (ii) to each other
Underwriter, a conformed copy of such registration statement or any Rule
462(b) Registration Statement and each amendment thereto (in each case
without exhibits thereto) and (iii) so long as a prospectus relating to
the Securities is required to be delivered under the Securities Act, as
many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representatives may reasonably
request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 9:00 AM, Central Standard Time,
on the business day following the date of determination of the public
offering price, if such determination occurred at or prior to 10:00 A.M.,
Central Standard Time, on such date or (B) 4:00 PM, Central Standard
Time, on the business day following the date of determination of the
public offering price, if such determination occurred after 10:00 A.M.,
Central Standard Time, on such date, will deliver to the Underwriters,
without charge, as many copies of the Prospectus and any amendment or
supplement thereto as the Representatives may reasonably request for
purposes of confirming orders that are expected to settle on the Firm
Closing Date. The Company will provide or cause to be provided to each
of the Representatives, and to each Underwriter that so requests in
writing, a copy of each report on Form SR filed by the Company as
required by Rule 463 under the Securities Act.
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(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives an earnings
statement of the Company that satisfies the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Xxxxxx Xxxx, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer
of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares
of Common Stock for a period of 180 days after the date hereof, except
pursuant to this Agreement and except for issuances of options for the
purchase of shares of Common Stock or issuance of shares of Common Stock
pursuant to employee benefit arrangements and plans existing on the date
hereof or pursuant to the terms of convertible securities of the Company
outstanding on the date hereof.
(i) The Company will not, directly or indirectly, (i) take 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 or (ii) (A) sell, bid for, purchase,
or pay anyone any compensation for soliciting purchases of, the
Securities or (B) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Company under this Agreement).
(j) The Company will obtain the Lock-Up Agreements (as
hereinafter defined) described in Section 9(i) hereof prior to the Firm
Closing Date. In addition, the Company will use commercially reasonable
efforts to obtain Lock-Up Agreements prior to the Firm Closing Date from
each person who (i) owns two percent (2%) or more of the outstanding
shares of Common Stock and (ii) is not covered under Section 9(i).
(k) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) and pay the applicable fees in accordance
with Rule 111 promulgated under the Securities Act by the earlier of (i)
10:00 P.M. Eastern time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(l) The Company will use its best efforts to cause the
Securities to be duly included for quotation on the Nasdaq National
Market, subject to official notice of issuance, prior to the Firm
Closing Date. The Company will use its best efforts to ensure that the
Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
7. COVENANTS OF SELLING STOCKHOLDER.
(a) The Selling Stockholder will not, directly or indirectly, without
the prior written consent of Xxxxxx Xxxx, offer, sell, offer to sell, contract
to sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, pledge, offer of sale, contract of sale, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock
legally or beneficially owned by
-13-
such Selling Stockholder or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 180 days after the date
hereof.
(b) The Selling Stockholder will not, directly or indirectly, for 180
days from the date of this Agreement (i) take any action designed to cause or
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 or (ii) (a) sell,
bid for, purchase, or pay anyone any compensation for soliciting purchases of,
the Securities or any other securities of the Company convertible into, or
exchangeable or exercisable for, shares of Common Stock (except for the sale of
the Securities by the Selling Stockholder under this Agreement).
(c) The Selling Stockholder agrees to deliver to you prior to or at
the Firm Closing Date (as hereinafter defined) a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
8. EXPENSES. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 13 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto provided that such filing fees and fees and disbursements of
the Underwriters counsel with respect to the qualification of the Securities
under state securities and blue sky laws shall not exceed an aggregate of
$12,000 if the Securities have been or will be included for quotation on the
Nasdaq National Market, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (vii) any
quotation of the Securities on the Nasdaq National Market, (viii) any meetings
with prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters), (ix) advertising relating to the offering of the Securities
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters) and (x) all costs and expenses incurred by the
Selling Stockholder with the exception of (A) any fees and disbursements for the
services of any outside counsel retained by the Selling Stockholder in excess of
$10,000 in the aggregate and (B) the Underwriters' discounts and commissions
with respect to the Securities being sold by the Selling Stockholder. In
addition, the Company shall pay directly to counsel to Xxxxxx Xxxx all out-of-
pocket expenses, including but not limited to printing, telecopying, telephone
and computer costs, secretarial overtime, air conditioning overtime and meals
incurred by counsel to the Company while at the offices of counsel to Xxxxxx
Xxxx, which expenses shall be described in reasonably detailed documentation
supporting such reimbursement request. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 9 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 13 hereof or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder other
than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements; PROVIDED, HOWEVER, that such legal
fees shall not exceed an aggregate of $75,000 during
-14-
the 90-day period commencing September 22, 1996 and provided, further, that
Xxxxxx Xxxx shall provide reasonably detailed records supporting such
reimbursement if so requested by the Company) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities. The
Company shall not in any event be liable to any of the Underwriters for the loss
of anticipated profits from the transactions covered by this Agreement.
9. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's and the Selling Stockholder's officers made pursuant to the
provisions hereof, to the performance by each of the Company and the Selling
Stockholder of its covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared
effective as of the time of execution hereof, the Original Registration
Statement or such amendment and, if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have been
declared effective not later than the earlier of (i) 11:00 A.M., Central
Standard Time, on the date on which the amendment to the registration
statement originally filed with respect to the Securities or to the
Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been
filed with the Commission and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any
Term Sheet that constitutes a part thereof and any amendment or
supplement thereto shall have been filed with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under
the Securities Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued,
and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission; and the Company shall have
complied with any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxxx Xxxx & Xxxxxx LLP, counsel for the
Company, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
Delaware and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material
adverse effect on the Company;
(ii) the Company has the corporate power to own or lease
its properties and conduct its business as described in the
Registration Statement and the Prospectus, and the Company has the
corporate power to enter into this Agreement and to carry out all
the terms and provisions hereof to be carried out by it;
(iii) as of the date of such opinion, the Company has an
authorized, issued and outstanding capitalization as set forth in
the Prospectus; all of the issued shares of
-15-
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, have been issued in
compliance with all applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities;
the Firm Securities have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will
be validly issued, fully paid and nonassessable; no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities; and no holder of securities of the Company has any
right which has not been fully exercised or waived to require the
Company to register the offer or sale of any securities owned by
such holder under the Securities Act in the public offering
contemplated by this Agreement;
(iv) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the
authorized capital stock of the Company, provide a fair summary of
such provisions; and the statements set forth under the headings
"Business--Regulation" and "Business--Legal Proceedings" in the
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein,
provide a fair summary of such legal matters, documents and
proceedings;
(v) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the
Company and this Agreement has been duly executed and delivered by
the Company;
(vi) (A) no legal or governmental proceedings are
pending to which the Company is a party or to which the property
of the Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or with
respect to any of its properties which, if determined adversely to
the Company, would have a material adverse effect on the financial
position, stockholders' equity, results of operations, business or
prospects of the Company and (B) no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
(vii) the issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such
as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (x) any
indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company is a party
or by which the Company or any of its properties is bound, or (y)
the charter documents or by-laws of the Company, or (z) any
statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to
such counsel and applicable to the Company other than, with
respect to (x) such breaches or violations which would not,
individually or in the aggregate, have a material adverse effect
on the Company;
-16-
(viii) the Registration Statement is effective under the
Securities Act; any required filing of the Prospectus, or any Term
Sheet that constitutes a part thereof, pursuant to Rules 434 and
424(b) has been made in the manner and within the time period
required by Rules 434 and 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any amendment
thereto has been issued, and, to the best knowledge of such
counsel, no proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission;
(ix) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each case,
other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Securities Act and the
published rules and regulations of the Commission thereunder; and
(x) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration
Statement at the time of its effectiveness or an effective post-
effective amendment thereto (including such information that is
permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe
that the Registration Statement (other than the financial statements and
other financial information contained therein as to which such counsel
need not comment), as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date or the date of such
opinion, included or includes any 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
were made, not misleading. In rendering such opinion, such counsel may
state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and the Prospectus and
review and discussion of the contents thereof but are without independent
check or verification.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and public officials and, as to
matters involving the application of laws of any jurisdiction other than
the State of New York or the United States, to the extent satisfactory in
form and scope to counsel for the Underwriters, upon the opinion of local
counsel acceptable to you and your counsel; PROVIDED, HOWEVER, that any
such opinion of local counsel shall also state that the Underwriters are
justified in relying upon such opinion and copies of such opinion shall
be delivered to the Representatives and counsel for the Underwriters.
The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
except for the statements made under the captions "Description of Capital
Stock", "Business-Regulation", and "Business-Legal Proceedings" insofar
as such statements relate to the Securities and concern legal matters.
-17-
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at
the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxxxx & Xxxxx L.L.P., 4200 Texas Commerce
Tower, 000 Xxxxxx, Xxxxxxx, Xxxxx 00000, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters. In rendering
such opinion, such counsel may rely as to all matters of law upon the
opinion of Xxxxxx Xxxx & Xxxxxx L.L.P. referred to in paragraph (b)
above.
(d) The Selling Stockholder shall have furnished to the
Representatives an opinion from Xxxxx Xxxxxxx, General Counsel and
Corporate Secretary of the Selling Stockholder, dated the Firm Closing
Date, to the effect that:
(i) The Selling Stockholder has full corporate power to
enter into this Agreement, the Custody Agreement and the Power-of-
Attorney and to sell, transfer and deliver the Securities being
sold by such Selling Stockholder hereunder in the manner provided
in this Agreement and to perform its obligations under the Custody
Agreement; the execution and delivery of this Agreement, the
Custody Agreement and the Power-of-Attorney have been duly
authorized by all necessary corporate action of such Selling
Stockholder; this Agreement, the Custody Agreement and the Power-
of-Attorney have been duly executed and delivered by such Selling
Stockholder; assuming due authorization, execution and delivery by
the Custodian, the Custody Agreement and the Power-of-Attorney are
the legal, valid, binding and enforceable instruments of such
Selling Stockholder, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(ii) the delivery by the Selling Stockholder to the
several Underwriters of certificates for the Securities being sold
hereunder by the Selling Stockholder against payment therefor as
provided herein, will convey good and marketable title to such
Securities to the several Underwriters, free and clear of all
security interests, liens, encumbrances, equities, claims or other
defects;
(iii) the sale of the Securities to the Underwriters by
the Selling Stockholder pursuant to this Agreement, the compliance
by the Selling Stockholder with the other provisions of this
Agreement, the Custody Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and
such as may be required under state securities or blue sky laws,
or (ii) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under (A) any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Selling Stockholder or any of the Selling
Stockholder's properties are bound (other than such conflicts,
breaches, defaults or violations which would not impair the
Selling Stockholder's obligations hereunder or have any adverse
effect on the Underwriters as such or the title to the Shares),
(B) the charter documents or by-laws of the Selling Stockholder or
(C) any statute or, to the best of such
-18-
counsel's knowledge, any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator applicable to the Selling Stockholder.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Selling Stockholder and public officials.
(e) The Representatives shall have received a certificate from
the Selling Stockholder, signed by an appropriate officer of the Selling
Stockholder, dated the Firm Closing Date, to the effect that:
(i) the representations and warranties of the Selling
Stockholder in this Agreement are true and correct as if made on
and as of the Firm Closing Date;
(ii) to the extent that any statements or omissions are
made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the
Company by the Selling Stockholder specifically for use therein,
the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and
(iii) the Selling Stockholder has performed all covenants
and agreements on its part to be performed or satisfied at or
prior to the Firm Closing Date.
(f) The Representatives shall have received from Xxxxxx
Xxxxxxxx LLP a letter or letters dated, respectively, the date hereof and
the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to
the Company within the meaning of the Securities Act and the
applicable rules and regulations thereunder;
(ii) in their opinion, the audited financial statements
and schedules and pro forma financial statements examined by them
and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published rules and regulations;
(iii) on the basis of a reading of the latest available
interim unaudited condensed financial statements of the Company,
carrying out certain specified procedures (which do not constitute
an examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of
the Company, and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that:
-19-
(A) the unaudited condensed financial statements
of the Company included in the Registration Statement and
the Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published rules and
regulations thereunder or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Registration Statement and the
Prospectus;
(B) at a specific date not more than five
business days prior to the date of such letter, there were
any changes in the capital stock or long-term debt of the
Company or any decreases in not current assets or
stockholders' equity of the Company, in each case compared
with amounts shown on the September 30, 1996 unaudited
condensed balance sheet included in the Registration
Statement and the Prospectus, or for the period from
October 1, 1996 to such specified date there were any
decreases in oil and gas revenues and total revenues and
any increase in net loss or per share amounts of net loss
of the Company, except in all instances for changes,
decreases or increases set forth in such letter; and
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of the Company and are included in the
Registration Statement and the Prospectus and in Exhibit 11 to the
Registration Statement, and have compared such amounts,
percentages and financial information with such records of the
Company and with information derived from such records and have
found them to be in agreement, excluding any questions of legal
interpretation; and
(v) on the basis of a reading of the unaudited pro
forma financial statements included in the Registration Statement
and the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect
to the comments set forth in this paragraph (v), inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma financial
statements, nothing came to their attention that caused them to
believe that the unaudited pro forma financial statements do not
comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
In the event that the letters referred to above set forth
any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriters that (A) such
letters shall be accompanied by a written explanation of the
Company as to the significance thereof, unless the Representatives
deem such explanation unnecessary, and (B) such changes, decreases
or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase
and delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
-20-
References to the Registration Statement and the Prospectus in
this paragraph (f) with respect to either letter referred to above shall
include any amendment or supplement thereto at the date of such letter.
(g) Xxxxx Xxxxx shall have delivered to you on the date of this
Agreement a letter dated on such date and also on the Closing Date a
letter dated the Closing Date, in each case in form and substance
reasonably satisfactory to you, stating, as of the date of such letter
(or, with respect to matters involving changes or developments since the
respective dates as of which specified information with respect to the
oil and gas reserves is given or incorporated in any Preliminary
Prospectus and the Prospectus as of the date not more than five days
prior to the date of such letter), the conclusions and findings of such
firm with respect to the Company's oil and gas reserves.
(h) The Representatives shall have received a certificate,
dated the Firm Closing Date, President and the Vice President-Business
Development of the Company to the effect that:
(i) the representations and warranties of the Company
in this Agreement that are qualified as to materiality are true
and correct, and such representations and warranties of the
Company that are not so qualified are true and correct in all
material respects, as of the Firm Closing Date; the Registration
Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or
threatened or, to the best of the Company's knowledge, are
contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, the Company has not sustained any material loss or
interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or
any development reasonably expected to involve a material adverse
change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the
Company, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto).
(i) The Representatives shall have received from each person
who is a director or officer of the Company or who owns five percent (5%)
or more of the Company's outstanding shares of Common Stock an agreement
(a "Lock-Up Agreement") to the effect that such person will not, directly
or indirectly, without the prior written consent of Xxxxxx Xxxx, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant
-21-
of an option to purchase or other sale or disposition) of any shares of
Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 180 days after
the date of this Agreement.
(j) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further
certificates, documents or other information as they may have reasonably
requested from the Company.
(k) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for quotation on the
Nasdaq National Market.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if
they are reasonably satisfactory in all material respects to the
Representatives and counsel for the Underwriters. The Company shall
furnish to the Representatives such conformed copies of such opinions,
certificates, letters and documents in such quantities as the
Representatives and counsel for the Underwriters shall reasonably
request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion,
to each of the foregoing conditions to purchase the Firm Securities,
except that all references to the Firm Securities and the Firm Closing
Date shall be deemed to refer to such Option Securities and the related
Option Closing Date, respectively.
10. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and the Selling Stockholder and
each person, if any, who controls any Underwriter or the Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or the Selling Stockholder or such
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse, as incurred, each
Underwriter or the Selling Stockholder and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives or by the Selling Stockholder specifically for use therein; and
PROVIDED, FURTHER, that the Company will not be liable to any Underwriter or the
Selling Stockholder or any person controlling such Underwriter or the Selling
Stockholder with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Securities Act, unless such failure to deliver the Prospectus (as amended or
supplemented) was a result of noncompliance by the Company with Section 5(d) and
(e) of
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this Agreement. This indemnity agreement will be in addition to any liability
which the Company may otherwise have; PROVIDED, HOWEVER, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter or the Selling Stockholder from whom the
person asserting such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter or the Selling
Stockholder, if a copy of the Prospectus, as then amended or supplemented if the
Company shall have furnished any amendment or supplement thereto, was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 6(d) and 6(e) of this Amendment. The Company will not, without the
prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and the Selling Stockholder and
such controlling persons from all liability arising out of such claim, action,
suit or proceeding.
(b) The Selling Stockholder agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement or any amendment thereto, each Underwriter and each person who
controls the Company or any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which the Company, any such director, officer,
such Underwriter or any such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to be
stated in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company by the Selling
Stockholder for use therein; PROVIDED, HOWEVER, that the foregoing indemnity
agreement with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting such losses, claims,
damages or liabilities purchased Securities, or any person controlling such
Underwriter, if a copy of the Prospectus, as then amended or supplemented if the
Company shall have furnished any amendment or supplement thereto, was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 6(d) and 6(e) of this Amendment. Subject to the limitations set forth
in the immediately preceding sentence, the Selling Stockholder will reimburse,
as incurred, any legal or other expenses reasonably incurred by the Company, any
such director, officer, such Underwriter or any such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which the Selling Stockholder may otherwise have. The
Selling Stockholder will not, without the prior written
-23-
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Stockholder, each of its
directors and officers and each person, if any, who controls the Company or the
Selling Stockholder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company, the Selling Stockholder or any such director,
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein: and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or the Selling Stockholder
or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; PROVIDED, HOWEVER, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 10 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it
-24-
being understood, however, that in connection with such action the indemnifying
party shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 10, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 10 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering received by
the Company and the Selling Stockholder bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, the
Selling Stockholder or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Stockholder and the Underwriters agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (e). Notwithstanding any other provision of this paragraph
(e), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section II (f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting obligations
and not joint, and contributions among Underwriters shall be governed by the
provisions of the Xxxxxx Xxxx Master Agreement Among Underwriters. For purposes
of this paragraph (e), each person, if any, who controls an Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company.
-25-
(f) The liability of the Selling Stockholder under this Section 10
shall not exceed the total public offering price of the Shares sold by the
Selling Stockholder, less applicable underwriting discounts and commissions.
Further, the provisions of this Section 10 shall not affect any other agreement
among the Company and the Selling Stockholder with respect to indemnification
and contribution.
11. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 13 hereof. In the event of any default by one or more Underwriters
as described in this Section 11, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 11. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
12. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, the
Selling Stockholder and the several Underwriters set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Selling
Stockholder, any Underwriter or any controlling person referred to in Section 10
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 8
and 10 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
13. TERMINATION. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Stockholder given prior
to the Firm Closing Date or the related Option Closing Date, respectively, in
the event that the Company or the Selling Stockholder shall have failed, refused
or been unable to perform all obligations and satisfy all conditions on its part
to be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Firm Closing Date or such Option Closing Date, respectively,
(i) the Company shall have, in the sole judgment of the
Representatives, sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding or there shall have been any
material adverse change, or any
-26-
development reasonably expected to involve a material adverse change
(including without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company, except in each case as
described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been
established on either such exchange;
(iii) a banking moratorium shall have been declared by State of
New York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended as of the date
hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
14. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth in
the last paragraph on the front cover page and under the heading "Underwriting"
and the legend concerning over-allotments on the inside front cover page in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 10 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
15. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Howard, Weil, Labouisse,
Xxxxxxxxxx Incorporated, Energy Centre, 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxx 00000 Attention: Compliance, with a copy to Xxxxxxx & Xxxxx
L.L.P., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 Attention: G. Xxxxxxx
X'Xxxxx; if sent to the Company, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to the Company at
3DX Technologies, Inc., 00000 Xxxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000
Attention: President, with a copy to Xxxxxx Xxxx & Xxxxxx LLP, 281 Tresser
Boulevard, Stamford, Connecticut 06901-3229 Attention: Xxx X. Xxxxxxxxxx; and if
sent to the Selling Stockholder, shall be delivered or sent by mail, telex, or
facsimile transmission and confirmed in writing to the Selling Stockholder at
Landmark Graphics Corporation, 00000 xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx, General Counsel and Corporate Secretary, with a
copy to Halliburton Company, 3600 Lincoln Plaza, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxx,
Xxxxx 00000-0000 Attention: Xxxxx Xxxxx, Vice President, Secretary and Corporate
Counsel.
16. SUCCESSORS. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Stockholder and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed
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to give any other person any legal or equitable right, remedy or claim under or
in respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the Company contained in Section 10 of
this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act. No purchaser of Securities from any Underwriter shall be deemed a
successor because of such purchase.
17. APPLICABLE LAW. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
3DX TECHNOLOGIES INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
LANDMARK GRAPHICS CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX INCORPORATED
XXXXXX XXXXXXX & CO.
By: Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
By: ________________________________________
Name: _________________________________
Title: _________________________________
For themselves and the other several Underwriters named in Schedule I hereto.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
Xxxxxx Xxxxxxx & Co.
_____________
Total .............. 2,949,862
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