<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 1997
REGISTRATION NUMBER 333-33979
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
COHO ENERGY, INC.
(Exact name of registrant as specified in its charter)
SEE TABLE OF ADDITIONAL REGISTRANTS BELOW
<TABLE>
<C> <C>
TEXAS 75-2488635
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
14785 PRESTON ROAD, SUITE 860
DALLAS, TEXAS 75240
(972) 774-8300
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
------------------------
JEFFREY CLARKE
14785 PRESTON ROAD, SUITE 860
DALLAS, TEXAS 75240
(972) 774-8300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
<TABLE>
<C> <C>
FULBRIGHT & JAWORSKI L.L.P. CRAVATH, SWAINE & MOORE
1301 MCKINNEY, SUITE 5100 825 EIGHTH AVENUE
HOUSTON, TEXAS 77010-3095 NEW YORK, NEW YORK 10019
(713) 651-5151 (212) 474-1000
ATTN: JERRY L. WICKLIFFE ATTN: KRIS F. HEINZELMAN
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER OF INCORPORATION OR ORGANIZATION IDENTIFICATION NO.
--------------------------- -------------------------------- ------------------
<S> <C> <C>
Coho Resources, Inc................................. Nevada 84-0824557
Coho Louisiana Production Company................... Delaware 76-0369936
Coho Louisiana Gathering Company.................... Delaware 84-1033960
Coho Fairbanks Gathering Company.................... Delaware 76-1228000
Coho Exploration, Inc............................... Delaware 75-2660779
Interstate Natural Gas Company...................... Delaware 76-0369928
</TABLE>
================================================================================
<PAGE> 3
EXPLANATORY NOTE
The Registrants have prepared this Amendment No. 3 to their registration
statement filed with the Securities and Exchange Commission (Registration Number
333-33979) (the "Registration Statement") for the purpose of filing certain
exhibits. This Amendment No. 3 does not modify any provision of the prospectuses
included as a part of the Registration Statement; accordingly, such prospectuses
have not been included herein.
<PAGE> 4
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the estimated expenses and costs (other than
underwriting discounts and commissions) expected to be incurred in connection
with the issuance and distribution of the securities registered hereby:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 67,046.52
NASD filing fee............................................. 22,625.35
Printing and engraving costs................................ 450,000.00
Transfer agent, trustee and registrar fees.................. 30,000.00
Legal fees and expenses..................................... 200,000.00
Accounting fees and expenses................................ 60,000.00
Miscellaneous............................................... 320,328.13
-------------
Total............................................. $1,150,000.00
</TABLE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act provides that any
director or officer of a Texas corporation may be indemnified against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by him
in connection with or in defending any action, suit or proceeding in which he is
a party by reason of his position. With respect to any proceeding arising from
actions taken in his official capacity as a director or officer, he may be
indemnified so long as it shall be determined that he conducted himself in good
faith and that he reasonably believed that such conduct was in the corporation's
best interests. In cases not concerning conduct in his official capacity as a
director or officer, a director may be indemnified as long as he reasonably
believed that his conduct was not opposed to the corporation's best interests.
In the case of any criminal proceeding, a director or officer may be indemnified
if he had no reasonable cause to believe his conduct was unlawful. If a director
or officer is wholly successful, on the merits or otherwise, in connection with
such a proceeding, such indemnification is mandatory. The Bylaws of Coho Energy,
Inc. provide for indemnification of its present and former directors and
officers to the fullest extent provided by Article 2.02-1.
The Bylaws of Coho Energy, Inc. further provide for indemnification of
officers and directors against reasonable expenses incurred in connection with
the defense of any such action, suit or proceeding in advance of the final
disposition of the proceeding.
The Articles of Incorporation of Coho Energy, Inc. eliminate or limit
liabilities of directors for breaches of their duty of care. The Articles do not
limit or eliminate the right of Coho Energy, Inc. or any shareholder to pursue
equitable remedies such as an action to enjoin or rescind a transaction
involving a breach of a director's duty of care, nor does it affect director
liability to parties other than Coho Energy, Inc. or its shareholders. In
addition, directors will continue to be liable for (i) breach of their duty of
loyalty, (ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law, (iii) declaring an illegal
dividend or stock repurchase, (iv) any transaction in which the directors
received an improper personal benefit, or (v) acts or omissions for which the
liability of directors is expressly provided by statute. In addition, the
amendment applies only to claims under Texas law against a director arising out
of his role as a director and not, if he is also an officer, his role as an
officer or in any other capacity and does not limit a director's liability under
any other law, such as federal securities law.
Texas corporations are also authorized to obtain insurance to protect
officers and directors from certain liabilities, including liabilities against
which the corporation cannot indemnify its directors and officers. Coho Energy,
Inc. currently has in effect a director's and officer's liability insurance
policy, which provides coverage in the maximum amount of $15,000,000, subject to
a $150,000 deductible.
II-1
<PAGE> 5
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*1.1 -- Form of Underwriting Agreement for Common Stock.
*1.2 -- Form of Underwriting Agreement for Notes.
4.1 -- Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 (Registration No. 33-65620)).
4.2 -- Statement of Resolution Establishing Series of Shares of
Series A Preferred Stock dated December 8, 1994
(incorporated by reference to the Company's Form 8-K
filed on December 16, 1984).
4.3 -- First Amendment to Statement of Resolution Establishing
Series of Shares of Series A Preferred Stock dated August
23, 1995 (incorporated by reference to Exhibit 3(i).1 to
the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995).
4.4 -- Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on
Form S-4 (Registration No. 33-65620)).
4.4 -- Rights Agreement dated September 13, 1994 between Coho
Energy, Inc. and Chemical Bank (incorporated by reference
to Exhibit 1 to the Company's Form 8-A dated September
13, 1994).
4.5 -- First Amendment to Rights Agreement made as of December
8, 1994 between Coho Energy, Inc. and Chemical Bank
(incorporated by reference to Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994).
4.6 -- Second Amendment to Rights Agreement as of August 30,
1995 between Coho Energy, Inc. and Chemical Bank
(incorporated by reference to Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995).
**4.7 -- Form of Indenture for Notes.
**5.1 -- Opinion of Fulbright & Jaworski L.L.P.
*10.1 -- Form of Letter Agreement dated September 29, 1997,
amending the Registration Rights and Shareholder
Agreement dated December 8, 1994 among Coho Energy, Inc.,
The Morgan Stanley Leveraged Equity Fund II, L.P. and
Quinn Oil Company Ltd.
**12.1 -- Statement of computation of ratios.
**15.1 -- Letter regarding unaudited interim financial information.
**23.1 -- Consent of KPMG Peat Marwick LLP.
**23.2 -- Consent of Arthur Andersen LLP.
**23.3 -- Consent of Ryder Scott Company Petroleum Engineers.
**23.4 -- Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
**24.1 -- Powers of Attorney.
**25.1 -- Statement of eligibility of trustee.
</TABLE>
- ---------------
* Filed herewith.
** Previously filed.
II-2
<PAGE> 6
UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO ENERGY, INC.
By: /s/ EDDIE M. LEBLANC, III
----------------------------------
Eddie M. LeBlanc, III
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Sr. Vice President and September 29, 1997
- ----------------------------------------------------- Chief Financial Officer
Eddie M. LeBlanc, III (Principal Financial
Officer)
* Controller (Principal September 29, 1997
- ----------------------------------------------------- Accounting Officer)
Susan J. McAden
* Director September 29, 1997
- -----------------------------------------------------
Robert B. Anderson
* Director September 29, 1997
- -----------------------------------------------------
Roy R. Baker
* Director September 29, 1997
- -----------------------------------------------------
Frederick K. Campbell
* Director September 29, 1997
- -----------------------------------------------------
Louis F. Crane
* Director September 29, 1997
- -----------------------------------------------------
Howard I. Hoffen
</TABLE>
II-4
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director September 29, 1997
- -----------------------------------------------------
Kenneth H. Lambert
* Director September 29, 1997
- -----------------------------------------------------
Douglas R. Martin
* Director September 29, 1997
- -----------------------------------------------------
Carl S. Quinn
Director
- -----------------------------------------------------
Jake Taylor
*By: /s/ EDDIE M. LEBLANC, III
------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO RESOURCES, INC.
By: /s/ EDDIE M. LEBLANC, III
----------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
* Director September 29, 1997
- -----------------------------------------------------
R.M. Pearce
*By: /s/ EDDIE M. LEBLANC, III
------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO LOUISIANA PRODUCTION COMPANY
By: /s/ EDDIE M. LEBLANC, III
-------------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
*By: /s/ EDDIE M. LEBLANC, III
- -----------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO LOUISIANA GATHERING COMPANY
By: /s/ EDDIE M. LEBLANC, III
-------------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
By: /s/ EDDIE M. LEBLANC, III
-------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO FAIRBANKS GATHERING COMPANY
By: /s/ EDDIE M. LEBLANC, III
-------------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
*By: /s/ EDDIE M. LEBLANC, III
- -----------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
COHO EXPLORATION, INC.
By: /s/ EDDIE M. LEBLANC, III
----------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
*By: /s/ EDDIE M. LEBLANC, III
------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-10
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas on September 29, 1997.
INTERSTATE NATURAL GAS COMPANY
By: /s/ EDDIE M. LEBLANC, III
----------------------------------
Eddie M. LeBlanc, III
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive September 29, 1997
- ----------------------------------------------------- Officer and Director
Jeffrey Clarke (Principal Executive
Officer)
/s/ EDDIE M. LEBLANC, III Chief Financial Officer September 29, 1997
- ----------------------------------------------------- (Principal Financial
Eddie M. LeBlanc, III Officer and Principal
Accounting Officer)
*By: /s/ EDDIE M. LEBLANC, III
------------------------------------------------
Eddie M. LeBlanc, III
Attorney-in-Fact
</TABLE>
II-11
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*1.1 -- Form of Underwriting Agreement for Common Stock.
*1.2 -- Form of Underwriting Agreement for Notes.
4.1 -- Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 (Registration No. 33-65620)).
4.2 -- Statement of Resolution Establishing Series of Shares of
Series A Preferred Stock dated December 8, 1994
(incorporated by reference to the Company's Form 8-K
filed on December 16, 1984).
4.3 -- First Amendment to Statement of Resolution Establishing
Series of Shares of Series A Preferred Stock dated August
23, 1995 (incorporated by reference to Exhibit 3(i).1 to
the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995).
4.4 -- Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on
Form S-4 (Registration No. 33-65620)).
4.4 -- Rights Agreement dated September 13, 1994 between Coho
Energy, Inc. and Chemical Bank (incorporated by reference
to Exhibit 1 to the Company's Form 8-A dated September
13, 1994).
4.5 -- First Amendment to Rights Agreement made as of December
8, 1994 between Coho Energy, Inc. and Chemical Bank
(incorporated by reference to Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994).
4.6 -- Second Amendment to Rights Agreement as of August 30,
1995 between Coho Energy, Inc. and Chemical Bank
(incorporated by reference to Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995).
**4.7 -- Form of Indenture for Notes.
**5.1 -- Opinion of Fulbright & Jaworski L.L.P.
*10.1 -- Form of Letter Agreement dated September 29, 1997,
amending the Registration Rights and Shareholder
Agreement dated December 8, 1994 among Coho Energy, Inc.,
The Morgan Stanley Leveraged Equity Fund II, L.P. and
Quinn Oil Company Ltd.
**12.1 -- Statement of computation of ratios.
**15.1 -- Letter regarding unaudited interim financial information.
**23.1 -- Consent of KPMG Peat Marwick LLP.
**23.2 -- Consent of Arthur Andersen LLP.
**23.3 -- Consent of Ryder Scott Company Petroleum Engineers.
**23.4 -- Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
**24.1 -- Powers of Attorney.
**25.1 -- Statement of eligibility of trustee.
</TABLE>
- ---------------
* Filed herewith.
** Previously filed.
<PAGE> 1
EXHIBIT 1.1
Master
[Draft--9/25/97]
8,584,482 Shares
COHO ENERGY, INC.
COMMON STOCK
$.01 par value
UNDERWRITING AGREEMENT
September , 1997
<PAGE> 2
September , 1997
Morgan Stanley & Co.
Incorporated
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs:
COHO ENERGY, INC., a Texas corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined below)
5,000,000 shares of its Common Stock, $.01 par value (the "Primary Shares"),
and the selling shareholders identified on Schedule I hereto (the "Selling
Shareholders") propose to sell to the several Underwriters 3,584,482 shares of
the Company's Common Stock, $.01 par value (the "Secondary Shares" and together
with the Primary Shares, the "Firm Shares").
Morgan Stanley & Co. Incorporated, Jefferies & Company, Inc.,
Prudential Securities Incorporated and Smith Barney Inc. shall act as
representatives (the "Representatives") of the several Underwriters.
Certain of the Selling Shareholders identified on Schedule II
hereto also propose to sell to the several Underwriters not more than an
additional 1,287,672 shares of the Company's Common Stock, $.01 par value (the
"Additional Shares"), if and to the extent that the Representatives shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section 3 hereof.
The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares". The shares of Common Stock, $.01 par value, of the Company
to be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "Common Stock". The Company and the Selling
Shareholders are hereinafter sometimes collectively referred to as the
"Sellers".
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement relating to the Shares.
The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933 (the
<PAGE> 3
"Securities Act"), is hereinafter referred to as the "Registration Statement";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus". If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant
to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property
-2-
<PAGE> 4
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the Company or
a subsidiary of the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(f) The shares of Common Stock (including the Secondary
Shares) outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.
(g) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
-3-
<PAGE> 5
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments of
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.
(m) Each of the Company and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except
to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(n) The Company is not and, after giving effect to the
offering and sales of the Shares and the
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<PAGE> 6
application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(o) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Representations and Warranties of the Selling
Shareholders. Each of the Selling Shareholders, severally and not jointly,
represents and warrants to each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder
of, and the performance by such Selling shareholder of its obligations
under, this Agreement will not contravene any provision of applicable
law, or
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<PAGE> 7
the certificate of incorporation or by-laws of such Selling
Shareholder (if such Selling Shareholder is a corporation), or any
agreement or other instrument binding upon such Selling Shareholder or
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Shareholder, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by
such Selling Shareholder of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the
Shares.
(c) Such Selling Shareholder has, and on the Closing Date
will have, valid title to the Shares to be sold by such Selling
Shareholder and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement and to sell,
transfer and deliver the Shares to be sold by such Selling
Shareholder.
(d) Upon delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement, the Underwriters will obtain
good and valid title to such Shares free and clear of any security
interest, claims, liens, equities and other encumbrances.
(f) The Registration Statement, when it became effective, did
not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and on the date of this
Agreement, the Registration Statement does not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The preceding sentence applies only to the
extent that any statements in or omissions from a Registration
Statement or the Prospectus are based on written information furnished
to the Company by such Selling Shareholder specifically for use
therein.
3. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Underwriters, and the Underwriters, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agree, severally and not jointly, to purchase
from the Company the respective numbers of Firm Shares set forth in Schedule
III hereto opposite their names at $_____ a share -- the purchase price.
-6-
<PAGE> 8
Each Selling Shareholder agrees, severally and not jointly, to
sell to the Underwriters, and the Underwriters, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree, severally and not jointly, to purchase from each
Selling Shareholder, at a purchase price of $ per share, the number of
Firm Shares set forth below the name of such Selling Shareholder and opposite
the name of such Underwriter in Schedule III hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, each of the Selling
Shareholders identified on Schedule IV hereto agrees, severally and not
jointly, to sell to the Underwriters the Additional Shares described in the
last sentence of this paragraph, and the Underwriters shall have a one-time
right to purchase, severally and not jointly, up to 1,287,672 Additional Shares
at the purchase price. If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Selling Shareholders in writing
not later than 30 days after the date of this Agreement, which notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Such date may be the same
as the Closing Date (as defined below) but not earlier than the Closing Date
nor later than ten business days after the date of such notice. Additional
Shares may be purchased as provided in Section 5 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the total number of Firm Shares set forth in both
parts of Schedule III hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 90 days after the date of the Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exchangeable for Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(i) or
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<PAGE> 9
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) the issuance by the Company of shares
of Common Stock upon the exercise of any option or warrant or the conversion of
a security outstanding on the date hereof of which the Underwriters have been
advised in writing or (C) transactions by any person other than the Company
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the offering of the Shares. In addition,
each Selling Shareholder, agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exchangeable for
Common Stock.
4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at U.S.$_____ a share (the public offering price) and to certain
dealers selected by you at a price that represents a concession not in excess
of U.S. $_____ a share under the public offering price, and that any
Underwriter may allow, and such dealers may re-allow, a concession, not in
excess of U.S.$_____ a share, to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be
sold by each Seller shall be made to such Seller in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 a.m., New York
City time, on _____________, 19971, or at such other time on the same or such
other date, not later than _____________, 19972, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "Closing Date".
- -----------------------------------
(1) Insert date 3 business days or, in the event the offering is priced
after 4:30 p.m. Eastern Time (and T+4 settlement is deemed to apply to secondary
sales), 4 business days after the date of the Underwriting Agreement.
(2) Insert date 5 business days after the date inserted in accordance with
note 1 above.
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<PAGE> 10
Payment for any Additional Shares shall be made to the Selling
Shareholders in Federal or other funds immediately available in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date specified
in the notice described in Section 3 or at such other time on the same or on
such other date, in any event not later than ________, 19__,3 as shall be
designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
6. Conditions. The several obligations of the Sellers
hereunder and the several obligations of the Underwriters hereunder are subject
to the condition that the Registration Statement shall have become effective
not later than 5 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings,
- -------------------------------
(3) Insert date 10 business days after the date of the notice referred to in
Section 3.
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<PAGE> 11
business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendment or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clause (a)(i) above
and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You (and the Selling Shareholders in respect of the
opinion described in clause (xii) below and the final paragraph of
this subsection (c)) shall have received on the Closing Date an
opinion of Fulbright & Jaworski LLP, counsel for the Company, dated
the Closing Date (except for the opinion described in clause (xi)
below which opinion shall be rendered by [ ], special environmental
counsel for the Company), to the effect that:
(i) the Company is a corporation validly existing in
good standing under the laws of the State of Texas and has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
(ii) each subsidiary of the Company that is a
significant subsidiary as defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act, is a corporation
validly existing in good standing under the laws of the
jurisdiction of its
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<PAGE> 12
incorporation and has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained under the heading "Description of Capital Stock" in
the Prospectus;
(iv) the Secondary Shares have been duly authorized
and are validly issued, fully paid and non- assessable;
(v) the Shares to be sold by the Company have been
duly authorized and, when issued and delivered in accordance
with the terms of this Agreement, will be validly issued,
fully paid and non- assessable, and the issuance of such
Shares will not be subject to any statutory preemptive or
similar rights;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable
law or the articles of incorporation or by-laws of the Company
or, to such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries
filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1996, or, to such
counsel's knowledge, any judgment, or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of or qualification with any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Shares by the Underwriters;
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<PAGE> 13
(viii) the statements (1) in the Prospectus under the
captions "Business and Properties-- Government Regulation",
"Business and Properties--Environmental Regulations",
"Description of Capital Stock" and "Underwriters" and (2) in
the Registration Statement in Item 15, in each case insofar as
such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(ix) after due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required;
(x) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(xi) the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder.
In such opinion such counsel will state that (i) it has no
reason to believe that (except for financial statements and schedules
and other financial and statistical data included therein as to which
such counsel need not express any belief) the Registration Statement
and the prospectus included therein at the time the Registration
Statement became effective contained any 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
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<PAGE> 14
misleading and (ii) has no reason to believe(except for financial
statements and schedules and other financial and statistical data
included therein as to which such counsel need not express any belief)
the Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(d) You shall have received an opinion, dated the Closing
Date, of Peter Vogelsang, Esq., general counsel and secretary for
Morgan Stanley Leveraged Equity Fund II, Inc., the general partner of
The Morgan Stanley Leveraged Equity Fund II, L.P., and of Shearman &
Sterling, counsel for Quinn Oil Company Ltd., and of Fulbright &
Jaworski LLP, counsel for Kenneth H. Lambert, to the effect with
respect to the respective Selling Shareholders that:
(i) this Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Shareholder;
(ii) the execution and delivery by the Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement will not
contravene any provision of applicable law, or the certificate
of incorporation or by-laws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or, to the best of
such counsel's knowledge, any agreement or other instrument
binding upon such Selling Shareholder or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
such Selling Shareholder of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares;
(iii) each of the Selling Shareholders has the legal
right and power, and all authorization and approval required
by law, to enter into this Agreement and to sell, transfer and
deliver the Shares to be sold by such Selling Shareholder; and
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<PAGE> 15
(iv) assuming the purchase and sale of the Shares
occurs in the State of New York, each Underwriter to the
extent it acquires shares in good faith and without notice of
adverse claims (as defined in Article 8 of the New
York-Uniform Commercial Code), will upon payment for such
Shares acquire its interest in such Shares free of any adverse
claim (as so defined).
(e) You shall have received on the Closing Date an opinion of
Cravath, Swaine & Moore, special counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in subparagraphs
(iv), (v), (vii) (but only as to the statements in the Prospectus
under "Description of Capital Stock" and "Underwriters"), (ix) and
(xi) of paragraph (c) above.
With respect to the last paragraph of Section 6(c) above,
Fulbright & Jaworski LLP and Cravath, Swaine & Moore may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified. With respect to those opinions in
Section 6(c) related to the laws of Nevada, Fulbright & Jaworski LLP may rely
upon the opinion of Lionel, Sawyer & Collins, special counsel to the Company.
With respect to Section 6(d) above, each such counsel mentioned herein may rely
upon the opinion or opinions of counsel for any Selling Shareholders and, with
respect to factual matters and to the extent such counsel deems appropriate,
upon the representations of each Selling Shareholder contained herein and in
other documents and instruments; provided that (A) a copy of each opinion so
relied upon is delivered to you and is in form and substance satisfactory to
your counsel and (B) although we have not performed an independent verification
of the substance of such counsel's opinion, we have no reason to believe that
you are not justified in relying thereon.
The opinions described in paragraph (c) and (d) above shall be
rendered to you at the request of the Company or the respective Selling
Shareholder and shall so state therein.
(f) You and the Selling Shareholders shall have received, on
each of the date hereof and the Closing Date, a letter dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to you, from Arthur Andersen LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with
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<PAGE> 16
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; provided
that the letter delivered on the Closing Date shall use a "cut-off"
date not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain shareholders, officers
and directors of the Company relating to sales of shares of Common
Stock of the Company or any securities convertible into or exercisable
or exchangeable for such common stock, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing
Date.
(h) You shall have received on the Closing Date from each
of the Selling Shareholders a properly completed and executed United
States Treasury Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the Representatives
on the Option Closing Date of such documents as they may reasonably request
with respect to the good standing of the Company, the valid and unencumbered
title of the Additional Shares and other matters related to the issuance of the
Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, five copies of the
conformed EDGAR submission copy of the Registration Statement
(including exhibits thereto) and for delivery to each other
Underwriter a conformed EDGAR submission copy of the Registration
Statement (without exhibits thereto) and, to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish you a copy of each such
proposed amendment or supplement and to file no such proposed
amendment or supplement to which you reasonably object, and to file
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<PAGE> 17
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of your counsel the
Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or of, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you
will furnish to the Company) to which Shares may have been sold by you
on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1998 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
agrees to pay or cause to be paid all expenses incident to the performance of
its obligations under this Agreement, including:(i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for
the Selling Shareholders in connections with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of
-16-
<PAGE> 18
copies thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all expenses in connection with the qualification of the Shares
for offer and sale under sate securities laws as provided in Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of the
offering of the Shares by the National Association of Securities Dealers, Inc.,
(v) all costs and expenses incident to listing the Shares on the Nasdaq Stock
Market, (vi) the cost of printing certificates representing the Shares, (vii)
the costs and charges of any transfer agent, registrar or depositary, (viii)
the costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section, Section 9 entitled "Indemnity and
Contribution", and the last paragraph of Section 11 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
The provisions of this Section 8 shall not affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with defending or investigating any such action
-17-
<PAGE> 19
or claim) caused by any untrue statement or alleged untrue statement or a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter, and each person, if
any who controls such Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Selling Shareholder furnished to the
Company in writing by such Selling Shareholder for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each Selling Shareholder, the
Company's directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company or any Selling Shareholder within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the three preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related
-18-
<PAGE> 20
to such proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and (c) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Selling Shareholders and all persons, if any, who control any Selling
Shareholder within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by Morgan Stanley & Co. Incorporated.
In the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the Selling
Shareholders, and such directors, officers and control persons of such Selling
Shareholders, such firm shall be designated in writing by such Selling
Shareholders selling a majority of the Shares sold by all Selling Shareholders
hereunder. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written
-19-
<PAGE> 21
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify each indemnified
party from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section
9(a), 9(b), or 9(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such subsection, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares sold by such Seller shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by such Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Shares. The relative fault of a Seller
on the one hand and the Underwriters on the other hand 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 such Seller or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such
-20-
<PAGE> 22
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective number
of shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 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 that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations and warranties of the Company and each
Selling Shareholder contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company, or by or on behalf of any
Selling Shareholder, its officers or directors or any person controlling such
Selling Shareholder and (iii) acceptance of and payment for any of the Shares.
(h) The liability of each Selling Shareholder under this
Section 9 shall not exceed an amount equal to the initial offering price of the
Shares sold by the Selling Shareholder, less the applicable underwriting
discounts and commissions.
-21-
<PAGE> 23
10. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse, and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Registration Statement by the Commission.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set forth opposite their respective names in Schedule III
bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 11 by an amount in excess
of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
-22-
<PAGE> 24
is more than one-tenth of the aggregate number of Shares to be purchased on
such date, and arrangements satisfactory to you, the Company and the Selling
Shareholders for the purchase of such Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter, the Company or the Selling Shareholders. In
any such case either you, the Company or the Selling Shareholders shall have
the right to postpone the Closing Date or the Option Closing Date, as the case
may be, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
-23-
<PAGE> 25
14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of references only and shall not be deemed a
part of this Agreement.
Very truly yours,
COHO ENERGY, INC.,
By
----------------------------------
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.,
By Morgan Stanley Leveraged
Equity Fund II, Inc., General Partner
By
----------------------------------
Name:
Title:
QUINN OIL COMPANY LTD.,
By
----------------------------------
Name:
Title:
----------------------------------
Kenneth H. Lambert
Accepted, , 1997
----------
MORGAN STANLEY & CO.
INCORPORATED
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
Acting severally on behalf of themselves
and the several Underwriters
By Morgan Stanley & Co.
Incorporated
By
----------------------------------
-24-
<PAGE> 26
Schedule I
Secondary Shares
<TABLE>
<CAPTION>
Number of Shares
To Be Sold
---------------
Name of Selling Shareholders
- ----------------------------
<S> <C>
The Morgan Stanley Leveraged Equity Fund II, L.P.
Quinn Oil Company Ltd
Kenneth H. Lambert
------------------
Total Secondary Shares . . . . . . . . . . . . . . . . . . . . . 3,584,482
==================
</TABLE>
<PAGE> 27
Schedule II
Additional Shares
<TABLE>
<CAPTION>
Number of Shares
To Be Sold
Name of Selling Shareholders ----------------
- ----------------------------
<S> <C>
The Morgan Stanley Leveraged Equity
Fund II, L.P.
Quinn Oil Company Ltd.
-----------------
Total Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 1,287,672
=================
</TABLE>
<PAGE> 28
Schedule III
Firm Shares sold by the Company
<TABLE>
<CAPTION>
Number of Shares to be
Underwriter Purchased
----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
[NAMES OF OTHER UNDERWRITERS]
--------------------------
Total Shares . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
==========================
Firm Shares sold by the Selling Shareholders
--------------------------------------------
Name of Selling
Shareholder and The
Number of Shares
Underwriter to be Sold
----------- ----------------
Morgan Stanley & Co. Incorporated
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
[NAMES OF OTHER UNDERWRITERS]
--------------------------
Total Shares . . . . . . . . . . . . . . . . . . . . . . . . 3,584,482
==========================
</TABLE>
<PAGE> 29
Schedule IV
Additional Shares
<TABLE>
<CAPTION>
Name of Selling
Shareholder and Number of
Additional Shares To be
Underwriter Sold
----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
[NAMES OF OTHER UNDERWRITERS]
--------------------------
Total Additional Shares . . . . . . . . . . . . . . . . . . 1,287,672
==========================
</TABLE>
<PAGE> 30
Exhibit A
[FORM OF LOCK-UP LETTER]
September , 1997
Coho Energy, Inc.
14785 Preston Road, Suite 860
Dallas, TX 75240
Morgan Stanley & Co. Incorporated
Jefferies & Company, Inc.
Prudential Securities Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co.
Incorporated ("MORGAN STANLEY") proposes to enter into an Underwriting
Agreement (the "UNDERWRITING AGREEMENT") with Coho Energy, Inc., a Texas
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Morgan Stanley (the
"UNDERWRITERS"), of 8,584,482 shares (the "SHARES") of the Common Stock, $0.01
par value of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public offering (the "PROSPECTUS"), (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exchangeable for Common Stock, or
(ii) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the
<PAGE> 31
Underwriters pursuant to the Underwriting Agreement or (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering. In addition, the
undersigned agrees that, without the prior written consent of Morgan Stanley on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and the Underwriters.
Very truly yours,
---------------------------
(Name)
----------------------------
(Address)
-2-
<PAGE> 1
[Draft--9/24/97]
September , 1997
Morgan Stanley & Co.
Incorporated
Jefferies & Company, Inc.
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, NY 10020
Dear Sirs:
COHO ENERGY, INC., a Texas corporation (the "Company"),
proposes to issue and sell to several Underwriters named in Schedule I hereto
(the "Underwriters") $125 million principal amount of its % Senior
Subordinated Notes Due 2007 (the "Securities") to be issued pursuant to the
provisions of an Indenture dated as of September , 1997 (the "Indenture")
between the Company and Marine Midland Bank, as Trustee (the "Trustee"). The
Securities will be guaranteed on a senior subordinated basis by Coho Resources,
Inc., a Nevada corporation ("CRI") and certain other wholly owned subsidiaries
of the Company identified on the signature pages of this Agreement
(collectively, with CRI, the "Subsidiary Guarantors").
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Securities. The registration statement as amended at the time
it becomes effective, including the information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933 (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Securities is hereinafter referred to as the
"Prospectus". If the Company has filed an abbreviated registration
<PAGE> 2
2
statement to register additional securities pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462 Registration Statement.
1. Representations and Warranties of the Company and the
Subsidiary Guarantors. Each of the Company and the Subsidiary Guarantors
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain, and each such part, as amended
or supplemented, if applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
<PAGE> 3
3
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the Company or
a subsidiary of the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors.
<PAGE> 4
4
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized,executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited
by equitable principles of general applicability and (iii) general
principles of equity may affect such matters.
(g) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may affect such
matters.
(h) The Subsidiary Guarantees have been duly authorized and,
when the Indenture has been duly executed and delivered by the
Subsidiary Guarantors, the Subsidiary Guarantees will be valid and
binding agreements of the respective Subsidiary Guarantors,
enforceable in accordance with their respective terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (iii) general principles of equity may affect such
matters.
<PAGE> 5
5
(i) The execution and delivery by each of the Company and the
Subsidiary Guarantors of, and the performance by each of the Company
and the Subsidiary Guarantors of their respective obligations under,
this Agreement, the Indenture and the Securities, as the case may be,
will not contravene any provision of applicable law or the articles or
certificate of incorporation or by-laws of the Company or such
Subsidiary Guarantor, as the case may be, or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company and the Subsidiary Guarantors of their respective obligations
under this Agreement, the Indenture or the Securities, as the case may
be, except such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the
Securities.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
<PAGE> 6
6
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the rules and regulations of the Commission thereunder.
(m) None of the Company and the Subsidiary Guarantors is and,
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus,
will be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
<PAGE> 7
7
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and the Underwriters, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agree, severally and not jointly, to
purchase from the Company the respective principal amounts of Securities set
forth in Schedule I hereto opposite their names at % of their principal
amount--the purchase price--plus accrued interest, if any, from September ,
1997 to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement has become effective as in your judgment is advisable. The Company
is further advised by you that the Securities are to be offered to the public
initially at % of their principal amount--the public offering price--plus
accrued interest, if any, and to certain dealers selected by you at a price
that represents a concession not in excess of % of their principal amount
under the public offering price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of % of their principal
amount, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be
made in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several
<PAGE> 8
8
Underwriters at 10:00 a.m., New York City time, on __________, 1997,(1) or at
such other time on the same or such other date, not later than __________,
1997,(2) as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Payment for the Securities shall be made against delivery to
you on the Closing Date for the respective accounts of the several Underwriters
of the Securities registered in such names and in such denominations as you
shall request in writing not less than one full business day prior to the
Closing Date, with any transfer taxes payable in connection with the transfer
of the Securities to the Underwriters duly paid.
5. Conditions of the Underwriters' Obligations. The
obligations of the Company and the several obligations of the Underwriters to
purchase and pay for the Securities on the Closing Date are subject to the
condition that the Registration Statement shall have become effective not later
than 5:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's
- ---------------
(1) Insert date 3 business days or, in the event the offering is priced after
4:30 p.m. Eastern Time (and T+4 settlement is deemed to apply to secondary
sales), 4 business days after the date of the Underwriting Agreement.
(2) Insert date 5 business days after the date inserted in accordance with
note [6] above.
<PAGE> 9
9
securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement), that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) You shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company and
the Subsidiary Guarantors contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
Fulbright & Jaworski LLP, counsel for the Company (except for the
opinion described in paragraph (x) below, which opinion shall be
rendered by [ ], special environmental counsel for the
Company), dated the Closing Date, to the effect that:
(i) the Company is a corporation validly existing in
good standing under the laws of the
<PAGE> 10
10
State of Texas, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) each subsidiary of the Company that is a
significant subsidiary as defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act, is a corporation
validly existing in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of business or its ownership or leasing
of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by each of the Company and the
Subsidiary Guarantors;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by each of the Company and the Subsidiary Guarantors
and is a valid and binding agreement of each of the Company
and the Subsidiary Guarantors, enforceable in accordance with
its terms except as (i) enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting
<PAGE> 11
11
creditors' rights generally, (ii) rights of acceleration, if
applicable, and the availability of equitable remedies may be
limited by equitable principles of general applicability and
(iii) general principles of equity may affect such matters;
(v) the Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i)
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable
principles of general applicability and (iii) general
principles of equity may affect such matters;
(vi) the execution and delivery by each of the
Company and the Subsidiary Guarantors of, and the performance
by the Company and the Subsidiary Guarantors of their
respective obligations under, this Agreement, the Securities
and the Indenture, will not contravene any provision of
applicable law or the articles or the certificate of
incorporation or by-laws of the Company or the relevant
Subsidiary Guarantor or, of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries filed as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31,
1996, or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order
<PAGE> 12
12
of, or qualification with, any governmental body or agency is
required for the performance by the Company and the Subsidiary
Guarantors of their respective obligations under this
Agreement, the Securities and the Indenture, except such as
may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Securities;
(vii) the statement (1) in the Prospectus under the
captions "Business and Properties-- Governmental Regulation,"
"Business and Properties--Environmental Regulations,"
"Description of the Notes" and "Underwriters" and (2) in the
Registration Statement under Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents and proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the
matters referred to therein;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required;
(ix) none of the Company and the Subsidiary
Guarantors is and, after giving effect to the offering and
sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will be an "investment
company"
<PAGE> 13
13
as such term is defined in the Investment Company Act of 1940,
as amended;
(x) such counsel is of the opinion that the Company
and its subsidiaries (i) are in compliance with any and all
applicable Environmental Laws, (ii) have received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries taken as a whole;
and
(xi) the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder.
In such opinion, such counsel will state that it (i)
has no reason to believe that (except for financial statements
and schedules and other financial and statistical data
included therein as to which such counsel need not express any
belief and except for that part of the Registration Statement
that constitutes the Form T-1 heretofore referred to) the
Registration Statement and the prospectus included therein at
the time the Registration Statement became effective contained
any 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 (ii) has no
reason to
<PAGE> 14
14
believe (except for financial statements and schedules and
other financial and statistical data as to which such counsel
need not express any belief) the Prospectus as of the Closing
Date contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
Cravath, Swaine & Moore, special counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in subparagraphs
(iii), (iv), (v), (vii) (but only as to the statements in the
Prospectus under "Description of the Notes" and "Underwriters"), (ix)
and (xi) of paragraph (c) above.
With respect to subparagraph (xi) of Section 5(c) above,
Fulbright & Jaworski LLP and Cravath, Swaine & Moore may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified. With respect to those opinions in
Section 5(c) related to the laws of the State of Nevada, Fulbright & Jaworski
LLP may rely upon the opinion of Lionel, Sawyer & Collins, special counsel to
the Company.
The opinions of Fulbright & Jaworski LLP and [ ]
described in paragraph (c) above shall be rendered to you at the request of the
Company and shall so state therein.
(e) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Arthur Andersen LLP, independent public accountants for the Company,
containing statements and information of the type ordinarily included
in accountants' "comfort letters"
<PAGE> 15
15
to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) The Equity Offering (as defined in the Prospectus) shall
have been consummated substantially on the terms described in the
Registration Statement.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three copies of the
conformed EDGAR submission copy of the Registration Statement
(including exhibits thereto) and for delivery to each other
Underwriter a conformed EDGAR submission copy of the Registration
Statement (without exhibits thereto) and, to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus
<PAGE> 16
16
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it
is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Securities may
have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplement, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1998 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or any of the Subsidiary Guarantors or warrants to purchase
debt securities of the Company or any of the Subsidiary Guarantors
substantially similar to the Securities or the Subsidiary Guarantors
in respect thereof (other than (i) the Securities and (ii) commercial
paper issued in the ordinary course of business), without your prior
written consent.
<PAGE> 17
17
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwrites and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all expenses in connection with
the qualification of the Securities for offer and sale under state law
as provided in section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the
offering of the Securities by the National Association of Securities
Dealers, Inc., (v) any fees charged by the rating agencies for the
rating of the Securities, (vi) all costs and expenses incident to
listing the Securities on the Luxembourg Stock Exchange, (vii) the
cost of printing certificates representing the Securities, (viii) the
costs and charges of any trustee, transfer agent, registrar or
depositary, (ix) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including
without limitation, expenses
<PAGE> 18
18
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
It is understood, however that except as provided in this Section,
Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) Each of the Company and
the Subsidiary Guarantors agrees, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including any legal or other expenses reasonably incurred by any Underwriter
or any such controlling person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplement if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
<PAGE> 19
19
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless each of the Company, and the Subsidiary Guarantors,
their respective directors, their respective officers who sign the Registration
Statement and each person, if any, who controls the Company and the Subsidiary
Guarantors within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect
<PAGE> 20
20
of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated, in the case of parties
indemnified pursuant to the second preceding paragraph, and by the Company, in
the case of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
<PAGE> 21
21
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Subsidiary Guarantors on the one hand
and the Underwriters on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Subsidiary Guarantors on the one hand and of the
Underwriters on the other hand in connection with the statement or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Subsidiary Guarantors on the one hand and the Underwriters on
the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Securities. The
relative fault of the Company and the Subsidiary Guarantors on the one hand and
of the Underwriters on the other hand 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 or the Subsidiary Guarantors or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Securities
they have purchased hereunder, and not joint.
<PAGE> 22
22
The Company, the Subsidiary Guarantors and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 7 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
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
<PAGE> 23
23
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the event specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Registration Statement by the Commission.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportion that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
principal amount of Securities set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as
<PAGE> 24
24
you may specify, to purchase the Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Underwriter
has agreed to purchase pursuant to Section 2 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any nondefaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the
Closing Date but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
<PAGE> 25
25
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
COHO ENERGY, INC.
By
------------------------------
COHO RESOURCES, INC.
By
------------------------------
COHO LOUISIANA PRODUCTION COMPANY
By
------------------------------
COHO LOUISIANA GATHERING COMPANY
By
------------------------------
COHO FAIRBANKS GATHERING COMPANY
By
------------------------------
COHO EXPLORATION, INC.
By
------------------------------
<PAGE> 26
26
INTERSTATE NATURAL GAS COMPANY
By
-------------------------------
Accepted, September , 1997
MORGAN STANLEY & CO.
INCORPORATED
Jefferies & Company, Inc.
Acting severally on behalf
of themselves and the
several Underwriters
named herein.
By Morgan Stanley & Co.
Incorporated
By
-------------------------------
<PAGE> 27
27
Schedule I
<TABLE>
<CAPTION>
Underwriter Principal Amount of
----------- Securities
-------------------
<S> <C>
Morgan Stanley & Co.
Incorporated
Jefferies & Company, Inc.
------------
$125,000,000
============
</TABLE>
<PAGE> 1
EXHIBIT 10.1
[COHO ENERGY, INC. LETTERHEAD]
September 29, 1997
The Morgan Stanley Leveraged
Equity Fund II, L.P.
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, NY 10020
Attention: Howard I. Hoffen
Dear Sirs:
1. Reference is made to the Registration Rights and Shareholder
Agreement (the "Agreement") dated as of December 8, 1994, among Coho Energy,
Inc., a Texas corporation, The Morgan Stanley Leveraged Equity Fund II, L.P., a
Delaware limited partnership, and Quinn Oil Company Ltd., a Texas limited
partnership. Defined terms used herein that are not defined herein shall have
the meanings assigned to them in the Agreement.
2. Section 5.1 of the Agreement is hereby amended in its entirety
to read as follows:
"5.1 Board of Directors. The Company agrees to nominate two
persons, one designated by MSLEF II (the "First Designee"), and one
designated by Quinn (the "Second Designee"), for election to the Board
of Directors of the Company at each annual meeting of the Company's
shareholders after 1997. In the event the shares of Common Stock owned
by MSLEF II and Quinn that were acquired by them pursuant to the
Acquisition or upon the exchange of (or in satisfaction of accrued
dividends with respect to) the Series A Preferred (including for this
purpose shares that have been distributed by MSLEF II or Quinn to their
respective partners and are owned by such partners) shall constitute
less than 5% of the outstanding shares of Common Stock, the Company's
obligations with respect to this Section 5.1 shall cease. To the extent
the Company's proxy statement for any annual meeting includes a
recommendation regarding the election of any other nominees to the
Company's Board of Directors, the Company agrees
<PAGE> 2
2
to include a recommendation that the shareholders also vote in favor of the
foregoing nominees."
3. This Agreement shall be governed by the laws of the State of
Texas.
COHO ENERGY, INC.
By:
-------------------------------------
Name: Jeffrey Clarke
Title: President
Accepted and agreed as of
the date first above written:
QUINN OIL COMPANY LTD.
By:
-----------------------------------
Name: Carl S. Quinn,
Title: General Partner
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC., its
GENERAL PARTNER
By:
-----------------------------------
Name:
Title:
