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EXHIBIT 1.1
Belco Oil & Gas Corp.
Underwriting Agreement
March 4, 1998
Xxxxxxx, Xxxxx & Co.,
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
From time to time Belco Oil & Gas Corp., a Nevada corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Convertible Preferred Stock, par value
$.01 per share (the "Shares"). The Shares specified in such Pricing Agreement
are referred to as the "Firm Shares" with respect to such Pricing Agreement and
the Shares represented by such Pricing Agreement are referred to as the shares
of "Designated Shares" with respect to such Pricing Agreement. If specified in
such Pricing Agreement, the Company may grant the Underwriters the right to
purchase at their election an additional number of Shares, specified as
provided in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively referred to as the "Designated Shares". The Designated Preferred
Stock may be convertible into shares of Common Stock, par value $.01 per share,
of the Company (the "Stock"). The securities so specified, if any, are
referred to in such Pricing Agreement as the Designated Securities with respect
to such Pricing Agreement.
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to
time to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each
Pricing Agreement shall specify the aggregate number of the Firm Shares, the
maximum number of Optional Shares, if any, the initial public offering price of
such Firm and Optional Shares or the manner of determining such price, the
terms of the Designated Shares, including the terms on which and terms of the
securities into which the Designated Shares will be convertible or
exchangeable, the purchase price to the Underwriters of such Designated Shares,
the names of the Underwriters of such Designated Shares, the names of the
Representatives of such Underwriters, the number of such Designated Shares to
be purchased by each Underwriter and the commission, if any, payable to the
Underwriters with respect thereto and shall set forth
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the date, time and manner of delivery of such Firm and Optional Shares, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect
thereto) the terms of such Designated Shares. A Pricing Agreement shall be in
the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-42107) (the "Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission"); the
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters, has been declared effective
by the Commission in such form, no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Securities Act of 1933, as amended (the "Act") each in
the form heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Registration Statement, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the Registration Statement at the time such part of the
Registration Statement became effective, each as amended at the time such part
of the registration statement became effective, became or hereafter becomes
effective, are hereinafter collectively called the "Registration Statement";
the prospectus relating to the Shares including any amendments or supplements
thereto, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable form
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Registration Statement that is incorporated
by reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares in the
form in which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission, as
the case may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case
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may be, will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Shares;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) The historical and pro forma financial statements,
together with related schedules and notes, set forth in or incorporated by
reference into the Prospectus comply as to form in all material respects with
the requirements of the Act. The historical consolidated financial statements
of the Company fairly present the consolidated financial position of the
Company at the respective dates indicated and the consolidated results of
operations and cash flows of the Company and its consolidated subsidiaries for
the respective periods indicated, in each case in accordance with generally
accepted accounting principles consistently applied throughout such periods.
The pro forma financial statements of the Company set forth in or incorporated
by reference into the Prospectus have been prepared on a basis consistent with
the historical statements of the Company and its consolidated subsidiaries,
except for the pro forma adjustments specified herein, give effect to
assumptions made on a reasonable basis and present fairly the pro forma effects
of the acquisition by the Company of Coda Energy, Inc. ("Coda"). The other
financial and statistical information and data included in the Prospectus are,
in all material respects, accurately presented and prepared on a basis
consistent with such historical and pro forma financial statements and the
books and records of the Company;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(f) The Company and its subsidiaries have good and
defensible title to their interests in oil and gas properties owned by them,
good and marketable title to all other real property owned by them and good and
marketable title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as
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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 and its subsidiaries;
(g) The participation agreements, joint development
agreements, joint operating agreements, farm- out agreements and other
agreements described in the Prospectus relating to the rights of the Company
and its subsidiaries 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 its
subsidiaries that are parties thereto 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;
(h) The information underlying the estimates of the
reserves of the Company and its subsidiaries, which was supplied by the Company
to Xxxxxx and Xxxxx, Inc. ("Xxxxxx and Xxxxx"), independent petroleum
engineers, for purposes of auditing the 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;
Xxxxxx and Xxxxx was, as of the date of each reserve report referred to in the
Prospectus, and is, as of the date hereof, independent petroleum engineers with
respect to the Company; other than normal production of the reserves and
intervening spot market product price fluctuations and the Company is not aware
of any facts or circumstances that would result in a materially adverse change
in the reserves, or the present value of future net cash flows therefrom, as
described in the Prospectus; estimates of such reserves and present values as
described in the Prospectus comply in all material respects to the applicable
requirements of Regulation S-X and Industry Guide 2 under the Act;
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Nevada, with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns,
leases or operates properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by reason
of the failure to be so qualified in any such jurisdiction; and each direct and
indirect subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation or is duly formed and validly existing as a limited
partnership, as the case may be, and each such subsidiary has the requisite
corporate or partnership power and authority to own, lease and operate its
properties and to carry on its business as it is currently being conducted, and
each is duly qualified and is in good standing as a foreign corporation or duly
registered as a foreign limited partnership, as the case may be, qualified or
authorized to do business in each jurisdiction in which it owns, leases or
operates properties or conducts any business so as to require such
qualification or registration, or is subject to no material liability or
disability by reason of the failure to be so qualified or registered in any
such jurisdiction;
(j) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable. The shares of Stock initially issuable upon conversion of the
Shares have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Shares
referred to below, will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Stock contained in
the Prospectus;
(k) The Shares have been duly and validly authorized,
and, when the Firm Shares are issued and delivered pursuant to this Agreement
and the Pricing Agreement with respect to such Designated Shares and, in the
case of any Optional Shares, pursuant to Over-allotment Options (as defined in
Section
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3 hereof) with respect to such Shares, such Designated Shares will be duly and
validly issued and fully paid and non-assessable; the Shares conform to the
description thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares; except as
described in the Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities or commitments of sale
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other equity ownership interest in, the Company; all of
the issued shares of capital stock of, or partnership or other equity ownership
interests in, each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and ( except as set
forth in the Prospectus) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims; there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities or commitments of sale entitling any person to purchase or otherwise
to acquire any shares of the capital stock of, or partnership or other equity
ownership interest in, any subsidiary of the Company;
(l) This Agreement has been duly authorized and validly
executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company;
(m) The issue and sale of the Shares and the compliance
by the Company with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject,
nor will such action result in any violation of the provisions of the Articles
of Incorporation or By-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares and the shares
of Stock issuable upon conversion of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, except such as have been, or will have
been prior to each Time of Delivery (as defined in Section 4 hereof), obtained
under the Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(n) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject, which, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others;
(o) Neither the Company nor any of its subsidiaries is
(i) in violation of its Articles of Incorporation or By-laws or (ii) in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except in the case of clause
(ii) for any such default which would individually or in the aggregate not have
a material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(p) The Company and its subsidiaries (i) are in
compliance with all federal, state and local laws and regulations applicable to
their respective businesses, operations and properties, (ii) possess all
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permits, licenses or other approvals required of them under such laws and
regulations and (iii) are in compliance with the terms and conditions of all
such permits, except for any noncompliance with such laws or regulations,
failure to possess any such permit or noncompliance with the terms of any such
permit which would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole;
(q) The statements set forth in the Prospectus under the
caption "Description of Preferred Stock" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the Preferred
Stock and the Stock, respectively, and under the caption "Plan of Distribution"
and "Underwriting," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate in all material respects.
(r) Except as set forth in the Prospectus, no holder of
any security of the Company has or will have any right to require the
registration of such security, by virtue of any transaction contemplated by
this Agreement that has not been validly waived;
(s) The Shares have been approved for listing on the New
York Stock Exchange (the "Exchange"), subject to official notice of issuance;
(t) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(u) Xxxxxx Xxxxxxxx LLP, who have certified certain
financial statements of the Company and its subsidiaries are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(v) Ernst & Young LLP, who have certified certain
financial statements of Coda and its subsidiaries incorporated by reference
into the Prospectus, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless the Representatives and the Company otherwise agree in writing,
earlier than or later than the respective number of business days after the
date of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall
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be, in each case, the number of Optional Shares which the Company has been
advised by the Representatives have been attributed to such Underwriter;
provided that, if the Company has not been so advised, the number of Optional
Shares to be so added shall be, in each case, that proportion of Optional
Shares which the number of Firm Shares to be purchased by such Underwriter
under such Pricing Agreement bears to the aggregate number of Firm Shares
(rounded as the Representatives may determine to the nearest 100 shares). The
total number of Designated Shares to be purchased by all the Underwriters
pursuant to such Pricing Agreement shall be the aggregate number of Firm Shares
set forth in Schedule I to such Pricing Agreement plus the aggregate number of
Optional Shares which the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement, and in such
authorized denominations and registered in such names as the Representatives
may request upon at least forty-eight hours' prior notice to the Company, shall
be delivered by or on behalf of the Company to the Representatives for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer in immediately available
funds to the account specified by the Company in the funds specified in such
Pricing Agreement, (i) with respect to the Firm Shares, all in the manner and
at the place and time and date specified in such Pricing Agreement or at such
other place and time and date as the Representatives and the Company may agree
upon in writing, such time and date being herein called the "First Time of
Delivery" and (ii) with respect to the Optional Shares, if any, in the manner
and at the time and date specified by the Representatives in the written notice
given by the Representatives of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business
day following the execution and delivery of the Pricing Agreement relating to
the applicable Designated Shares or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the Representatives for
such Shares promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after any Time of
Delivery for such Shares and prior to the second anniversary of such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Shares, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use
of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares or the shares of Stock, if any, issuable upon
conversion of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any prospectus relating to the Shares or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
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(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares or the shares of
Common Stock, if any, issuable upon conversion of the Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement, and from time to
time, to furnish the Underwriters with copies of the Prospectus in New York
City, as amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Shares or the shares of
Stock, if any, issuable upon conversion of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an 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 when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as
the Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
(d) To make generally available to its security holders
as soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period beginning from the date of the
Pricing Agreement for such Designated Shares and continuing to and including
the date which is 90 days after the date of the Pricing Agreement, not to offer
to sell, sell, grant any option to purchase or otherwise dispose of any shares
of any capital stock of the Company (or securities convertible into, or
exchangeable for capital stock of the Company), directly or indirectly, without
the prior written consent of Xxxxxxx, Xxxxx & Co., except for (i) grants of
stock options by the Company to its officers, directors and employees and the
issuance of stock upon exercise of options held by such persons, (ii) shares of
capital stock issued by the Company in connection with the acquisition of
assets or capital stock of any company engaged in the oil and gas business and
(iii) shares of Common Stock of the Company issuable upon exercise of warrants
granted in connection with the acquisition of Coda by the Company;
(f) To use its best efforts to list, subject to notice of
issuance, the shares of Stock issuable upon conversion of the Shares on the
Exchange; and
(g) To reserve and keep available at all times, free of
preemptive rights, shares of Stock for the purpose of enabling the Company to
satisfy any obligation to issue shares of its Stock upon conversion of the
Shares.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares and the shares of Stock issuable
upon conversion under the Act and all other expenses in connection with the
preparation, printing and filing of the
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Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares and the shares of Stock issuable upon conversion for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Shares; (v) any filing
fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) any fees and expenses in connection with listing the Shares and the Stock;
(vii) the cost of preparing certificates for the Shares; (viii) the cost and
charges of any transfer agent or registrar or dividend disbursing agent; and
(xi) all other costs and expenses incident to the performance of its
obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares
under the Pricing Agreement relating to such Designated Shares shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Shares are, at and as of each Time of Delivery for such Designated Shares, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation
to such Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to
the Representatives their opinion or opinions (a draft of each such opinion is
attached as Annex I(a) hereto), dated each Time of Delivery for such Designated
Shares, with respect to the matters covered in paragraphs (i), (ii), (vi), (x),
(xii) and (xiii) of subsection (c) below as well as such other related matters
as the Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Counsel for the Company satisfactory to the
Representatives shall have furnished to the Representatives their written
opinion or opinions (a draft of each such opinion is attached as Annex I(b)
hereto), dated each Time of Delivery for such Designated Shares, respectively,
in form and substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
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(ii) The Company has an authorized capitalization
as set forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company (including the
Designated Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
non-assessable; and the shares of Stock initially issuable upon
conversion of the Shares have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance
with the provisions of the Shares, will be duly and validly issued and
fully paid and non-assessable, and will conform to the description of
the Stock contained in the Prospectus; and the Designated Shares and
the Stock conform to the description thereof contained in the
Prospectus as amended or supplemented;
(iii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(iv) Each direct and indirect subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation or is duly formed and validly existing as a limited
partnership, as the case may be; and all of the issued shares of
capital stock of, or partnership or other equity ownership interests
in, each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except as otherwise
set forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect to matters of
fact upon certificates of officers of the Company or its subsidiaries,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and
certificates);
(v) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized, executed
and delivered by the Company;
(vii) The issue and sale of the Designated Shares
being delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the Pricing
Agreement with respect to the Designated Shares and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Articles of Incorporation or By-laws of the Company or any statute or
any
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order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of its properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Designated Shares being delivered at such Time of Delivery or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been obtained
under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares and the shares of Stock issuable
upon conversion of the Shares by the Underwriters;
(ix) Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound;
(x) The statements set forth in the Prospectus
under the caption "Description of Preferred Stock" and "Description of
Capital Stock," insofar as they purport to constitute a summary of the
terms of the Preferred Stock and the Stock, respectively, and under
the caption "Plan of Distribution" and "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair in all material respects;
(xi) The Company is not an "Investment Company" or
an entity "controlled" by an "Investment Company", as such terms are
defined in the Investment Company Act;
(xii) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and
(xiii) The Registration Statement and the Prospectus
as amended or supplemented, and any further amendments and supplements
thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which
such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (x) of this Section 7(c),
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such
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Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States. In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Texas or the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
(d) On the date of the Pricing Agreement for such
Designated Shares at a time prior to the execution of the Pricing Agreement
with respect to the Designated Shares and at each Time of Delivery for such
Designated Shares, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives (the
executed copy of the letter delivered prior to the execution of this Agreement
is attached as Annex II(a) hereto and a draft of the form of letter to be
delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex
II(b) hereto);
(e) On the date of the Pricing Agreement for such
Designated Shares and at each Time of Delivery for such Designated Shares, the
independent accountants of the Company who have certified certain financial
statements of Coda and its subsidiaries included or incorporated by reference
in the Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the date of
the most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement, if the
date of such report is later than such effective date, and a letter dated such
Time of Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) On the date of the Pricing Agreement for such
Designated Shares and at each Time of Delivery for such Designated Shares,
Xxxxxx and Xxxxx shall have furnished to the Representatives a letter (a draft
of such letter is attached as Annex IV hereto), dated such Time of Delivery, in
form and substance satisfactory to the Representatives, confirming that they
are independent petroleum engineers with respect to the Company and stating
certain conclusions and findings of such firm with respect to the information
and other matters covered by its reserve report previously delivered to you;
(g) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Shares any loss or
interference with its
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business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Shares, and (ii) since the respective dates as of which information is given in
the Prospectus as amended prior to the date of the Pricing Agreement relating
to the Designated Shares there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, the effect of which, in
any such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the Prospectus
as amended relating to the Designated Shares;
(h) On or after the date of the Pricing Agreement
relating to the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement
relating to the Designated Shares there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the Exchange; (ii) a suspension or material limitation in trading
in the Company's securities on the Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Firm Shares or Optional
Shares or both on the terms and in the manner contemplated in the Prospectus as
first amended or supplemented relating to the Designated Shares;
(j) The Shares at each Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange; and
(k) The Company has obtained and delivered to the
Underwriters executed copies of an agreement from each of Xxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxx, Xxxxxxxx X. Xxxxxx, Xxxx Xxxxx, Xxxxx Investment Group, Xxxxxx
X. Xxxxxx 1983 Grantor Trust, Shiv X. Xxxxxx, Xxxxxxxx X. Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxx and Xxxxxxxxx Xxxxxxx-Xxxxx,
substantially to the effect set forth in Subsection 5(e) hereof in form and
substance satisfactory to you; and
(l) The Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the Designated
Shares certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (h) of
this Section and as to such other matters as the Representatives may reasonably
request.
(m) The Company shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement;
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8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the 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, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, 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 each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the 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, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, 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, 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 any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the Shares, or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all
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liability arising out of such action or claim and (ii) does not include any
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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
the relative benefits received by the Company on the one hand and the
Underwriters of the Designated Shares on the other from the offering of the
Designated Shares to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters of the Designated Shares on the
other in connection with the statements or omissions which 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 on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault 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 on the one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Shares in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Shares and not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Firm Shares or Optional Shares which it has agreed to purchase
under the Pricing Agreement relating to such Shares, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the Representatives do not arrange for
the purchase of such Firm Shares or Optional Shares, as the case may
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be, then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Shares on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Shares, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Shares, the Representatives or the Company shall have the right to postpone a
Time of Delivery for such Shares for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of the
Firm Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Shares or
Optional Shares, as the case may be, which such Underwriter agreed to purchase
under the Pricing Agreement relating to such Designated Shares and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Shares or Optional Shares, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement) of
the Firm Shares or Optional Shares, as the case may be, of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Company
as provided in subsection (a) above, the aggregate number of Firm Shares or
Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Firm Shares or Optional Shares, as
the case may be, to be purchased at the respective Time of Delivery, as
referred to in subsection (b) above, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such Firm
Shares or the Over-allotment Option relating to such Optional Shares, as the
case may be, shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
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 any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under
any liability to any Underwriter with respect to the Firm Shares or Optional
Shares with respect to which such Pricing Agreement shall have been terminated
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
Designated Shares are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through the
-16-
17
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
-17-
18
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof.
Very truly yours,
BELCO OIL & GAS CORP.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and Chief
Executive Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
By: /s/ XXXXXXX, SACHS & CO.
---------------------------------
(Xxxxxxx, Xxxxx & Co.)
-18-
19
ANNEX I
PRICING AGREEMENT
Xxxxxxx, Sachs & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
March 4, 1998
Ladies and Gentlemen:
Belco Oil & Gas Corp., a Nevada corporation (the "Company") proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated March 4, 1998 (the "Underwriting Agreement"), between the
Company on the one hand and Xxxxxxx, Xxxxx & Co., Xxxxx Xxxxxx Inc. and
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated, on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters")
the Shares specified in Schedule II hereto (the "Designated Shares") consisting
of Firm Shares and any Optional Shares the Underwriters may elect to purchase.
The Designated Preferred Stock are convertible into shares of Common Stock, par
value $0.01 per share, of the Company (the "Stock"), as specified in Schedule
II to this Agreement. The Securities so specified, if any, are referred to in
this Agreement as the Designated Securities with respect to this Agreement.
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that
each representation and warranty which refers to the Prospectus in Section 2 of
the Underwriting Agreement shall be deemed to be a representation or warranty
as of the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Shares which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the
20
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares, as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at the purchase price
to the Underwriters set forth in Schedule II hereto that portion of the number
of Optional Shares as to which such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms
referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives to
the Company given within a period of 30 calendar days after the date of this
Pricing Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Company otherwise agree in
writing, no earlier than two or later than ten business days after the date of
such notice.
-2-
21
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
BELCO OIL & GAS CORP.
By: /s/ XXXXXX X. XXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
ACCEPTED AS OF THE DATE HEREOF:
Xxxxxxx, Sachs & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
By: /s/ XXXXXXX, SACHS & CO.
-----------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
-3-
22
SCHEDULE I
MAXIMUM
NUMBER OF
TOTAL NUMBER OF OPTIONAL SHARES
FIRM SHARES TO WHICH MAY BE
UNDERWRITER BE PURCHASED PURCHASED
--------------------------------------------- --------------- ---------------
Xxxxxxx, Sachs & Co. ........................ 1,520,000 228,000
Xxxxx Xxxxxx Inc. ........................... 1,520,000 228,000
Howard, Weil, Labouisse, Xxxxxxxxxx ......... 760,000 114,000
---------- ----------
Incorporated Total .................. 3,800,000 570,000
========== ==========
23
SCHEDULE II
TITLE OF DESIGNATED SHARES: 6 1/2% Convertible Preferred Stock, par value $.01
per share
CONVERTIBLE INTO SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, AT AN
INITIAL CONVERSION PRICE OF $22.14 (THE EQUIVALENT OF 1.1292 SHARES OF COMMON
STOCK FOR EACH SHARE OF PREFERRED STOCK)
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares: 3,800,000
Maximum Number of Optional Shares: 570,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Share
PURCHASE PRICE BY UNDERWRITERS:
$24.0625 per Share, provided, however, that the purchase price per
Share with respect to 600,000 of the Firm Shares to be sold by the
Underwriters to Xx. Xxxxxx and his family will be $24.625 rather than
$24.0625.
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian for
trading in the Same Day Funds Settlement System of DTC, and, to be made
available for checking by the Representatives at least twenty-four hours prior
to the Time of Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds by wire transfer
TIME OF DELIVERY:
9:00 a.m. (New York City time), March 10, 1998.
CLOSING LOCATION:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
24
NAMES AND ADDRESSES OF REPRESENTATIVES:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
OTHER TERMS: The Designated Shares will have the other terms as specified in
the Prospectus Supplement dated March 4, 1998 to the Prospectus dated December
24, 1997 relating to the Registration Statement (No. 333-42107) of Belco Oil &
Gas Corp.
25
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made
a review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which have been separately furnished to the Representatives; and on the basis
of specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of items 301, 302, 402 and 503(d), respectively, of
Regulation S- K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the
26
Company and its subsidiaries, inspection of the minute books of the Company and
its subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of officials
of the Company and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance shares
and upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
-2-
27
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified
by the Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by reference in
the Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein)
as defined in the Underwriting Agreement as of the date of the letter delivered
on the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
-3-
28
ANNEX III
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
Coda (the "Company") and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder;
29
ANNEX IV
[XXXXXX AND XXXXX LETTERHEAD]
March 4, 1998
Xxxxxxx, Sachs & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
As representatives of the several
Underwriters
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is written at the request of Belco Oil & Gas Corp. (the
"Company"). Reference is made to the Registration Statement on Form S-3 (No.
333-42107) filed by the Company with the Securities and Exchange Commission, as
amended to the date hereof (the "Registration Statement").
In this letter, reference will be made to our letter to the Company dated
March 4, 1998, in respect of the Company's reserves as of December 31, 1997
(the "Reserve Letter"), a copy of which has been provided to you.
In connection with the Registration Statement, we hereby inform you of the
following:
1. We are independent petroleum engineers with respect to the
Company. In connection with the Registration Statement and the Reserve Letter,
we are not employed on a contingent basis. At the time of preparation of the
Reserve Letter, we did not have, and at the date hereof we do not have, any
financial interest in the Company. At such time, and at the date hereof, we
are not, and are not connected with the Company as, a promoter, underwriter,
director, officer or employee.
2. The letter to the Company attached hereto is a true, correct, and
complete copy of the Reserve Letter as provided to the Company on March 4,
1998. We are not aware of any additional information that we believe is
necessary to be disclosed in the Reserve Letter in order to prevent the
information set forth therein from being misleading as of the date of the
reserve information therein (December 31, 1997). Further information regarding
the classification and definitions of the reserves shown in the Reserve Letter
is included in such letter.
30
3. As of the date hereof, nothing has come to our attention which
would cause us to revise downward by any material amount any statement made or
opinion expressed by us in the Reserve Letter, with respect to our estimates of
the oil and gas reserves and future net revenues attributable to the interest
of the Company in such properties.
Very truly yours,
XXXXXX AND XXXXX, LTD.
By:
---------------------------
Name:
Title:
-2-
31
PRICING AGREEMENT
Xxxxxxx, Sachs & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
March 4, 1998
Ladies and Gentlemen:
Belco Oil & Gas Corp., a Nevada corporation (the "Company") proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated March 4, 1998 (the "Underwriting Agreement"), between the
Company on the one hand and Xxxxxxx, Xxxxx & Co., Xxxxx Xxxxxx Inc. and Howard,
Weil, Labouisse, Xxxxxxxxxx Incorporated, on the other hand, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares") consisting of Firm
Shares and any Optional Shares the Underwriters may elect to purchase. The
Designated Preferred Stock are convertible into shares of Common Stock, par
value $0.01 per share, of the Company (the "Stock"), as specified in Schedule II
to this Agreement. The Securities so specified, if any, are referred to in this
Agreement as the Designated Securities with respect to this Agreement. Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees
32
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company at the purchase
price to the Underwriters set forth in Schedule II hereto that portion of the
number of Optional Shares as to which such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 30 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.
-2-
33
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
BELCO OIL & GAS CORP.
By:
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
ACCEPTED AS OF THE DATE HEREOF:
Xxxxxxx, Xxxxx & Co.
Xxxxx Xxxxxx Inc.
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
By:
-------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
-3-
34
SCHEDULE I
MAXIMUM
NUMBER OF
TOTAL NUMBER OF OPTIONAL SHARES
FIRM SHARES TO WHICH MAY BE
UNDERWRITER BE PURCHASED PURCHASED
--------------------------------------------- --------------- ---------------
Xxxxxxx, Xxxxx & Co. ........................ 1,520,000 228,000
Xxxxx Xxxxxx Inc. ........................... 1,520,000 228,000
Howard, Weil, Labouisse, Xxxxxxxxxx ......... 760,000 114,000
---------- ----------
Incorporated Total .................. 3,800,000 570,000
========== ==========
35
SCHEDULE II
TITLE OF DESIGNATED SHARES: 6 1/2% Convertible Preferred Stock, par value $.01
per share
CONVERTIBLE INTO SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, AT AN INITIAL
CONVERSION PRICE OF $22.14 (THE EQUIVALENT OF 1.1292 SHARES OF COMMON STOCK FOR
EACH SHARE OF PREFERRED STOCK)
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares: 3,800,000
Maximum Number of Optional Shares: 570,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Share
PURCHASE PRICE BY UNDERWRITERS:
$24.0625 per Share, provided, however, that the purchase price per Share
with respect to 600,000 of the Firm Shares to be sold by the Underwriters
to Xx. Xxxxxx and his family will be $24.625 rather than $24.0625.
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and, to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds by wire transfer
TIME OF DELIVERY:
9:00 a.m. (New York City time), March 10, 1998.
CLOSING LOCATION:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
36
NAMES AND ADDRESSES OF REPRESENTATIVES:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
OTHER TERMS: The Designated Shares will have the other terms as specified in the
Prospectus Supplement dated March 4, 1998 to the Prospectus dated December 24,
1997 relating to the Registration Statement (No.
333-42107) of Belco Oil & Gas Corp.
